Social Finance was founded to address the difficult funding challenges facing nonprofits and governments across the country. Persistent budget deficits and lack of nonprofit growth capital mean that proven interventions remain available to far too few at-risk individuals and families. We seek real change that engages the imaginations and resources of the public, nonprofit, and private sectors to develop and implement innovative funding approaches to seemingly intractable social problems. We believe such systemic change is possible only with the support of the capital markets.
Our initial focus is on launching Social Impact Bonds (SIBs), a financial instrument pioneered by our sister organization in the UK that has the potential to drive the necessary change in nonprofit financing and government funding. No other impact investing efforts provide a similar combination of upfront working capital to nonprofits, risk transfer to investors, and project management delivered by a dedicated intermediary. If our efforts are successful, we will demonstrate the potential of the instrument, help facilitate the creation of a new market, and:
- create impact investment instruments that generate returns by monetizing social outcomes and privatizing risk
- collect and analyze sophisticated data about which social programs are effective
- manage the implementation and coordination of the work of multiple parties towards social outcomes to drive greater accountability and better results
By creating such a market, proven social innovations will realize the benefits of scale more quickly and effectively, resulting in both improved social outcomes and reduced public-sector spending on costly crisis interventions.