Community Development Innovation Review

April 2013

Innovation Needs Foundation Support: The Case of Social Impact Bonds


For more than 100 years, philanthropy has taken risks other sectors either would not or could not take to advance innovations benefiting poor or vulnerable people. The Robert Wood Johnson Foundation hatched the idea for a national 911 emergency response system. The Ford Foundation promoted the concept of community development corporations that would create jobs, preserve affordable housing, and promote small businesses. The Carnegie Foundation supported the initial development of Pell Grants. The Rockefeller Foundation funded the research behind the ideas that evolved into the US Social Security system. Foundations are in the unique position to take risks, connect people and organizations with diverse perspectives, and cultivate groundbreaking innovations. And philanthropy is perhaps most useful when it can galvanize and leverage the actions and resources of others to build and sustain ideas that were once considered risky but have proven effective in meeting a pressing societal need.

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Other articles in this issue

Community Reinvestment Act (CRA) Banks as Pioneer Investors in Pay for Success Financing

The Real Revolution of Pay for Success: Ending 40 Years of Stagnant Results for Communities

Pay for Success is Not a Panacea

The Promise of Pay for Success

Social Impact Bonds: Lessons Learned So Far

Pay for Success: Understanding the Risk Trade-offs

The Ethics of Pay for Success

Learning from the Low Income Housing Tax Credit: Building a New Social Investment Model

Using Social Impact Bonds to Spur Innovation, Knowledge Building, and Accountability

Social Impact Bonds: Using Impact Investment to Expand Effective Social Programs

Pay for Success: Opportunities and Risks for Nonprofits

Success Begins with a Feasibility Study

Government’s Role in Pay for Success

Rikers Island: The First Social Impact Bond in the United States

Human Capital Performance Bonds

Pay for Success: Building On 25 Years of Experience with the Low Income Housing Tax Credit

Can Pay for Success Reduce Asthma Emergencies and Reset a Broken Health Care System?

Supporting At-Risk Youth: A Provider’s Perspective on Pay for Success

Tax Increment Finance: A Success-Driven Tool for Catalyzing Economic Development and Social Transformation

Bringing Success to Scale: Pay for Success and Housing Homeless Individuals in Massachusetts

Making Performance-Based Contracting Work for Kids and Families