Authors

Daniel Stid, The Bridgespan Group

Download PDF
(194 KB)

Volume 9, Issue 1 | April 18, 2013

Our society needs Pay for Success (PFS) schemes to work. We are spending too much on social programs that do not generate results, too much on high-cost treatments, and not enough on lower cost and more humane prevention. Amid our deteriorating fiscal state, we must figure out how to do more with less. No wonder a growing array of academics, financial intermediaries, consultants, government officials, and New York Times commentators are extolling “The Promise of Social Impact Bonds,” an intriguing new variant of the PFS approach. Yet I’m hesitant to jump on the bandwagon, in part because to date there are only a few social impact bonds (SIB) up and running, and we don’t know yet if they are working. The most established initiative, to combat recidivism among inmates released from the Peterborough Prison in the United Kingdom, has yet to produce any definitive results. In 2012, the first SIBs were launched in the United States in New York City and Massachusetts, among other early adopters. But it will be years before we know whether these experiments have paid off. If the “invest in what works” movement is about scaling proven solutions, there is considerable irony in so many of its participants calling for widespread adoption of a financial mechanism for doing so that remains essentially untested.