Notes on Social Impact Bond 社會影響力債券筆記

Social Impact Bond (SIB) invites the capital market to help governments invest in the social sector to solve social problems. If results meet targets (e.g. school enrollment rate reaches 95%), then governments pay back to bond holders with an additional amount as investment returns. If not, then bond holders lose all the money invested.

社會影響力債券 (SIB) 邀請資本市場協助政府,透過投資社會公益組織來解決社會問題。如果結果達到預期標準(例:學校註冊率達95%),則政府要將全數投資金額加額外報酬一併還給投資者(或稱債券持有人);如果未達標,則投資者將損失所有金額。

This semester, the professor in Leading Social Enterprise class invited the co-founder of Social Finance, Tracy Palandjian, to share her thoughts on SIB. I’m surprised at the similarity between SIB and the traditional PPP (public-private partnership) projects but also find some difference due to the adjustment to social sector. Here I would like to share some class notes with you.

這學期,「領導社會組織」的教授請來 Social Finance 的共同創辦人 Tracy Palandjian 分享她對 SIB 的想法。我很驚訝地發現 SIB 和傳統政府民間合作案 PPP 的高度相似,但也有對社會組織的特性進行調整的部分。以下為一些課程筆記,提供給大家參考。

A common practice of SIB process

  1. Identify social problems to be solved
  2. SIBs conduct market scan to identify service providers (e.g. NGOs)
  3. Service providers are invited to bid for projects
  4. Bond holders invest in the selected service provider
  5. After the end of the contract term, if results meet targets, governments provide promised return to bond holders

常見的 SIB 運作流程

  1. 識別欲解決的社會問題
  2. SIB 開始進行市場掃描,尋找合適的服務提供方(例:非營利組織)
  3. 服務提供方受邀參與競標
  4. 投資者針對獲選的服務提供方進行投資
  5. 在到期日時,若成果達標,則政府提供承諾的報酬給投資者

Why do we need SIB?

  1. Governments: the deal cycle in government usually takes too long, especially for innovative ideas. In addition, governments might not have capabilities to deliver the same level of service and achieve results efficiently (i.e. a value-for-money issue)
  2. Bond holders: get financial or social returns
  3. Service providers: receive funding to scale up its work

為什麼我們需要 SIB ?

  • 對政府而言:在政府內做一個案子需要的時間週期太長,特別是有創新想法的專案。此外,政府不一定有能力做到這麼好、或這麼有效率地達到目標,所以這對政府而言,是個 CP 值更高的選擇
  • 對投資者而言:獲得財務報酬或社會報酬 (social return)
  • 對服務提供方而言:獲得資金擴大影響力

Interesting insights

  1. Since the concept of SIB is at early stage, there is no enough data to evaluate investment risk. Hence, most investors are seeking social returns rather than financial returns. Having said that, Prudential and Goldman Sachs are both SIB investors now.
  2. To better support governments, some SIBs directly ask governments about topics they are interested in and metrics they are looking at. Investors are not involved until discussion on bond pricing.
  3. After the end of successful projects, there are two options: (1) continue the SIB model; (2) governments directly work with service providers to reduce cost (no need to pay extra return to investors). The key successful factor is to continue using a clear data tracking system as SIB does to evaluate performance
  4. Not necessary to be government to buy the service – it can also be other stakeholders (e.g. philanthropists)
  5. If all projects work, then it means that there is no risk transfer from government to bond holders. Only when some fail and some succeed do governments know that SIB really helps them transfer risk and is the best alternative


  • 因為 SIB 的概念還在發展初期,並沒有足夠的數據來衡量投資效益。因此,目前多數投資者仍然是以社會報酬為主、較不在乎財務報酬。儘管如此,Goldman Sachs 和 Prudential 都已進行投資。
  • 為更好協助政府,部分 SIB 會直接問政府對哪些社會問題感興趣、衡量指標為何。投資者在過程中,要一直到債券訂價的階段才會參與討論!
  • 在成功專案結束後,有兩種選擇:(1) 持續 SIB 模式繼續合作,或 (2) 政府直接和服務提供方合作以降低成本、因為不需要再提供額外報酬給投資者。而此時,關鍵成功因素就會在於是否有明確的數據追蹤系統來分析成果
  • 不一定是政府購買服務,也可能是其他利益相關方(例:慈善家)
  • 如果所有的專案都達標,則代表政府沒有轉嫁任何風險給投資者。只有當部分專案成功、部分專案失敗時,才代表 SIB 的設計有助於政府轉嫁風險、是更好的選擇

Food for thoughts – Key questions

  1. How to quantify risk for investors?
  2. How to set reasonable and measurable metrics to evaluate results?
  3. How to evaluate performance without interference of service providers’ operation?
  4. How to make sure that governments won’t outsource all responsibilities?
  5. How to persuade governments to adopt the new device to solve social problems?


  • 如何協助投資者量化風險?
  • 如何設定合理且可衡量的指標?
  • 如何衡量成果、但不影響服務提供方的日常運作?
  • 如何確定政府不會殆忽職守、把所有的工作都透過 SIB 外包出去?
  • 如何說服政府相信並採納 SIB 模式?

I’m really impressed by how SIB creates a new model to leverage the capital market to support social causes. There is one quote from Tracy I would like to share with you: “I have never been an entrepreneur, but I’m a fast follower” – She takes the idea from Social Finance UK and creates Social Finance US. We might not consider ourselves as entrepreneurs, but once the opportunity comes, hope we can put efforts to make things happen!

我對於 SIB 運用資本市場來支持社會目標的模式感到印象深刻。我特別想分享今天 Tracy 講的一句話:「我從來都不是創業家,但我是早期跟隨者」--她從 Social Finance UK 取得 SIB 的想法,帶到美國發揚光大。或許我們都不認為自己是創業家,但當機會來臨時,希望我們都能努力讓改變成真!

P.S. If you are interested in the topic, here is an article for your reference(如果你對這個主題有興趣,可以看看這篇文章做為參考)

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