1. SOCIAL IMPACT BONDS FOROMIC 2013

2. 2.2. WHAT IS A SOCIAL IMPACT BOND? A social impact bond is innovative financing arrangement that turns intractable social problems into investable opportunities. It is partnership in which private impact investors – not governments – provide capital for NGOs to scale up programs that help poor and vulnerable populations. The ultimate payment to investors is based on the achievement of a predefined outcome. If the outcome is not achieved, the government is not required to repay investors. FOROMIC 2013

3. 3.3. HOW DOES IT WORK? Special Purpose Company ( SIB Intermediary ) NGO Investors Government (Or other outcome payer) Investment Payment on success Principal + return 1 1 2 2 3 3 5 5 Independent impact evaluation 4 4 6 6 1 1 Impact investors provide capital to SIB intermediary SIB intermediary provides working capital to NGOs/companies to implement program NGOs/companies implement program Independent evaluation contracted to verify impact Gov’t pays principal plus interest ONLY if impact achieved Investors get paid 2 2 3 3 4 4 5 5 6 6 Private Service Provider $$ FOROMIC 2013

4. 4.4. Canada Various SIBs in exploration at the National level Scotland Government exploring SIBs in two sectors United Kingdom Home of 1st SIB 14 SIBs overall, multiple sectors USA Federal government designing 3 SIBs NYC launched SIB on recidivism Massachusetts 2 SIBs SIBs being developed in 7 States Israel 3 SIBs under design Australia New South Wales designing 3 SIBs in recidivism and foster care Ireland Government exploring SIBs in 5 topic areas South Africa SIB in criminal justice in Cape Town Mozambique SIB to combat malaria with financing from mining companies India SIB for education of girls Uganda SIB with DFID y Social Finance in design for sleeping sickness Germany Initial interest in SIBs Colombia SIBs en exploration for women’s health and primary education Rwanda SIB under exploration ALMOST 40 SIBS WORLDWIDE IN DEVELOPMENT FOROMIC 2013 Source: Information provided by Instiglio

5. QUESTIONS?