Betting on public good?
Betting on public good?We examine private investment in public services through social impact bonds.
A new financing model called a Social Impact Bond (SIB) is changing the way governments typically provide and fund social services. Instead of funding programmes from taxpayer money, governments form contracts with private investors willing to finance the services. Some call it an "ethical investment" while others say it's commercialising philanthropy.
Recently, Goldman Sachs has pledged to invest $9.6 million to the New York City government to keep young men out of one city jail. If it works, Goldman Sachs profits. If it fails, they may lose $2.4 million. Do SIBs help create a better society?
In this episode of The Stream, we speak to Kristina Costa (@slashklc) of the Center for American Progress, Daniel Stid (@Daniel_Stid) of the Bridgespan Group, and Toby Eccles (@socfinuk) of Social Finance.
What do you think? Are social impact bonds an ethical investment or commercialised philanthropy? Send us your thoughts and comments on Facebook or Twitter using #AJStream.