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Investing for “Impact” or Investing for Profit? Social Impact Bonds, Pay for Success, and the Next Wave of Privatization of Social Services

Policy Brief - Feb 04, 2020

Author(s) - Martin Carnoy, Stanford University; Roxana Marachi, San José State University

Is there a role for private investors in public social policy? In the past decade, we have seen the rise of new financial structures entering the social services arena, with corresponding legislation now poised to change how social services are delivered and who delivers them. While different programs use different terms—including, for example, Pay for Success or Results-Based Financing—the umbrella term encompassing these new financing models is the "Social Impact Bond" (SIB).