Dr. Emily Gustafsson-Wright on the Potential of Social Impact Bonds

Twitter:  @EGWBrookings  and Brookings Institution: @BrookingsInst

Dr. Emily Gustafsson-Wright is a fellow in the Center for Universal Education at the Brookings Institution. She specializes in applied microeconomic research within the fields of education and health in developing countries with regional foci in Africa and Latin America and the Caribbean. Her research encompasses several components of human development including education, social protection, health and labor.

Social Impact Bonds (SIBs) are also known as Pay For Success (PFS) contracts. They are based on a commitment from government to repay private investors (potentially from a proportion of the savings that result from improved social outcomes) for their upfront funding of early intervention social services. 

SIBs brings together government, service providers and investors/funders to implement existing and proven programs designed to accomplish clearly defined outcomes. Investors/funders provide the initial capital support and the government agrees to make payments to the program only when outcomes are achieved. So government pays for success.

It is too soon to say if social impact bonds will fundamentally change how social services are funded and implemented in the United States. They have only existed for 5 years so far, so this is a new field and a lot of analysis and data is still needed.  That is why we are joined today by Dr. Gustafsson-Wright of the Brookings Institution to share some knowledge and findings from the recent report published in the summer of 2015 on The Potential and Limitations of Social Impact Bonds. This is a great listen for anybody who wants to learn more about this rapidly growing investment vehicle. 



In this interview, we discuss:

  1. What is a SIB and how has it grown in the past 5 years?
  2. An analysis on the findings of the Brookings Institution Report.
  3. The 10 common claims of SIBs and what turns out to be true and what is myth (below). 
  4. What investors can learn so far and how they can improve the system going forward. 
  5. Are SIBs a form of philanthropy, and how can they provide real impact?


Summary of the Analysis of the 10 Common Claims about Social Impact Bonds:

Courtesy of The Brookings Institution 

Courtesy of The Brookings Institution 


  1. The Potential and Limitations of Impact Bonds - FULL REPORT
  2. More information on Social Impact Bonds from Brookings Institution
  3. Social Impact Bonds FAQ
  4. Case Study on Social Impact Bonds from Harvard Business Review
  5. Foundations for Social Impact Bonds by Social Finance US.
  6. Payforsuccess.org created by Nonprofit Finance Fund. 


"The social challenges that the world faces today really requires some serious consideration of innovative ways to finance and deliver services both more efficiently and more cost effectively.  This is what drove us to look at Social Impact Bonds."


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