Philanthropy & social impact
The Pay-for-Success Wall: Why Social Impact Bonds are Stalling
11 min
An investigation into the 'pay-for-success' model, exploring why high-profile recidivism and education projects are missing their targets and what this means for the future of private investment in social services.
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Show notes
Private investors fund social programs upfront and only receive government repayment if specific success metrics are met.
The first United States social impact bond failed after institutional friction at Rikers Island hindered program effectiveness.
Goldman Sachs lost one point two million dollars when a recidivism program failed to meet payout benchmarks.
Utah preschool investors faced criticism for using questionable testing to identify at-risk children and secure payouts.
High legal and actuarial costs often make social impact bonds more expensive than traditional government funding.
Financial models struggle to account for the non-linear recovery paths of chronic addiction and domestic trauma.
In this episode
- 1Intro1 min
- 2The Mechanics of a Social Bet2 min
- 3The Rikers Island Reality Check3 min
- 4The Data Friction: Utah and the Counterfactual Problem2 min
- 5The Human Service Paradox2 min
- 6Outro1 min
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