In the coming months, the states plan to write contracts for social service programs that taxpayers would pay for only if they prove to be successful. The initial outlays for the programs would be financed by private investors, who would reap a profit years later if the programs work as promised. Proponents of the bonds, which are also called pay-for-success contracts, say they have the potential to unlock vast pools of private financing to provide stable, long-range funding for social programs that governments often are hard-pressed to finance, particularly with the fiscal constraints they face in the wake of the recession. “The basic problem that all government leaders face in the current fiscal situation is they don’t have money to pay for what they are already doing, so how do they invest in new things that might be effective solutions for difficult problems?” said Jeffrey Liebman, who directs the Social Impact Bond Technical Assistance Lab at Harvard University. The concept of social impact bonds was virtually unknown until a couple of years ago. Now it is capturing the attention of government leaders eager to find ways to fund programs that they believe could reduce future expenses. m.washingtonpost/business/economy/can-investors-make-money-in-social-services/2013/06/07/a010e7f6-ced6-11e2-8845-d970ccb04497_story.html
Posted on: Sat, 15 Jun 2013 18:22:04 +0000
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