City Council had a recent briefing on a new concept for funding social service projects.
“Social impact bonds,” involving projects with set goals, are one of a number of new “payment by results” financing mechanisms available for social services. Private investors provide upfront capital for a social service, according to the Brookings Institution, and government pays investors based on the outcomes of the service.
Investors are only repaid if the agreed-upon goals are met.
Dennis Roberts of Resources for Human Development, a nonprofit that has been providing services since 1970, told Council members new ways of expanding the funding is important.
“RHD and other social service providers are continually challenged to discover new ways to respond to complex social problems,” Roberts said. “Increasingly strained social service budgets that have not seen increases for years are further exhausted when asked to direct precious financial resources into areas other than direct service.”
The bonds are a new concept and the council so far has only held a hearing on the proposal. Implementation would take legislation and a dedicated funding stream.