While still fairly nascent, these innovative funding mechanisms have great potential to drive private capital toward funding social services, to expand programming for those most in need, and to improve the lives of many. At the heart of a SIB contract is a set of agreed-upon metrics on which the repayment is based.
Here at Brookings, in a recent event held jointly with the Institute for Child Success and the Ounce of Prevention Fund, we sought to identify what metrics would best be used for such social impact bond contracts when applied toward early childhood development (ECD). ECD is well known to have an impact on the future health, labor market participation, and criminal behavior of individuals, but in this workshop we focused on outcomes in education.
Our goal was to identify education outcomes that were (1) meaningful, (2) measurable, and (3) would respond in a reasonable timeframe to be applicable to this type of financing strategy. Our conversation helped clarify just exactly what these concepts entail.