When Do SIBs Work?

How do we know when to deploy a SIB? In fact, not every social problem is a good candidate for a SIB-financed program – and partners must undertake stringent evaluation of various success criteria before deciding whether or not to launch a SIB. Our deep knowledge of the SIB market and instrument enables us to make a substantial contribution to this evaluation process.

These success criteria include weighing the following factors:

  • First, do no harm. Those initiating a SIB must determine, first and foremost, that their work will not cause any negative unintended consequences to the population that they hope to serve. For example, could excluding some needy individuals from services in order to provide a control group cause harm? Could family restoration services actually prove counterproductive? If the answer to any of these questions is yes, then the SIB project must be redesigned or abandoned.
  • Do the right service providers exist? A successful SIB project rests upon the ability of dedicated and skilled service providers who have the capacity to deliver social interventions on a larger scale. It is essential that there be a ready supply of personnel with knowledge and roots in the community, as well as a toolkit of proven social programs.
  • Is the financial case convincing? Rational investors will expect to see a solid financial case for the SIB; it must be clear that, barring unforeseen circumstances, the expected payout resulting from the program should be greater than the risk-adjusted costs of providing the program. In other words, projected returns should exceed the cost of setting up, running, and paying for the programs financed by a SIB. This assessment is part of our due diligence process.
  • Are the outcomes measurable and verifiable? Evaluators should be able to measure outcomes by using clear, objective data. Outcomes should be measured against a counterfactual – either by projecting historical data forward, or by establishing a control group of people who do not receive the services – in order to demonstrate that benefits arose from the program itself rather than some external factor.