tailieunhanh - A NEW TOOL FOR SCALING IMPACT: HOW SOCIAL IMPACT BONDS CAN MOBILIZE PRIVATE CAPITAL TO ADVANCE SOCIAL GOOD

Corporate bonds differ in two important ways: maturity and credit vary from short-term (between 1 and 5 years) to intermediate-term (between 5 and 10 years) to long-term (more than 10 years).Most corporate bonds are assigned a letter-coded rating by independent bond rating agencies such as Moody’s Investors Service, Inc., and Standard & Poor’s Corporation to indicate their relative credit quality—the likelihood that the issuer will pay interest and principal in full and on time. (More information about bond ratings is provided on page 10.) . | SOCIAL finance Social Impact Bonds An Overview A NEW TOOL FOR SCALING IMPACT HOW SOCIAL IMPACT BONDS CAN MOBILIZE PRIVATE CAPITAL TO ADVANCE SOCIAL GOOD SUPPORTED BY u contents 4 Executive Summary 6 Market Context 8 The Promise and Challenges of Social Impact Bonds 10 How Social Impact Bonds Work 16 Key Players 20 Potential Risks 22 Risk Mitigation through Intermediation 26 Promising Initial Social Impact Bond Applications 31 Conclusion A New Tool for Scaling Impact INTRODUCTION BY JUDITH RODIN President The Rockefeller Foundation The Rockefeller Foundation s mission to promote the well-being of humanity has remained unchanged since its founding in 1913. In a rapidly changing world we use an innovative and interconnected systems-based approach that combines civil society private and public sector resources to solve social problems. It was with this collaborative approach in mind and our goal to find solutions from unlikely sources that the Foundation embarked on its innovation initiative which aims to test whether new innovative approaches can be applied within development and achieve social good. Simultaneously the Foundation began its work to build the impact investing sector based on the premise that the resources of government and philanthropy alone are insufficient to address the world s biggest problems. Social Impact Bonds or Pay for Success Bonds sit at the nexus of our work in impact investing and scaling innovation and represent one component of the rapidly growing field of innovative finance that the Foundation has long supported and will continue to support as it evolves and changes in the future. Social Impact Bonds have the potential to substantially transform the social sector support poor and vulnerable communities and create new financial flows for human service delivery by offering an innovative way to scale what works and break the cyclical need for crisis-driven services. They are an exciting field of innovative finance but one we need to .