Social Impact: A $100 Million Experiment

The growing interest in social finance is putting pressure on advocates to identify a credible metric for social impact. If, for instance, you buy a social impact bond, you will get a return on your investment that is financial and will have a positive impact on society in some specific way. The financial return side is pretty standard and we have a long legacy around how that is managed and assessed. The social impact side is more tricky in part because it is sometimes difficult to standardize a measure of social good or social capital. 


This FastCompany article features the Obama team digging into the social impact bond experiment that was started in the UK. As this active work unfolds, it will receive a lot of scrutiny by people who are working in the 'social mission' sector, a space that often blurs the not-for-profit/for-profit lines in the interest of a social good outcome. The intensive entrepreneurial spirit of the United States as it appears to be turning a corner economically, is a great place for a substantial experiment like this to run. We will be well served to watch and learn as the process unfolds.


Intelligent, public good financial structures that work would represent a significant social ingenuity gain.