These include raising capital to fund operating costs and absorb risk, assembling a team of service providers, and managing the team to achieve performance objectives. In the original Peterborough SIB project in the United Kingdom, 18 intermediaries, Social Finance, is at the center of the transaction, performing all three roles and holding the contract from the government. However, other structures are also possible. For example, the government could contract directly with a lead provider, and that provider could raise funds from philanthropists and subcontract with additional providers. In that case, intermediaries might serve as consultants to the lead provider, helping the provider build its capacity to raise funds and meet performance targets. It is also possible that a foundation with an interest in testing solutions for a particular social problem might assume the lead role in negotiations with the government and then hire staff to manage the project and recruit …show more content…
The social impact bonds in Texas for healthcare were designed to improve prenatal care of babies. The cost to deliver a baby with a healthy, normal weight is about 5,000 dollars which can be considered a substantial amount. However, the cost to deliver a premature, underweight baby is 100,000 dollars, more than twenty times the original amount. While every life should be considered precious, it would be much more beneficial on the community, hospital, family, and even baby if steps and precautions were taken to ensure the greatest chance that the baby was born healthy. By having more healthy babies born, the hospital would be able to redirect the extra money towards other babies and patients that need the medical attention. Even after birth, education for children with special needs costs more than double what it does for regular education indicating that the community would benefit continually for each baby born healthy and that the social impact bonds invested would have an immediate impact within the first 36 months since babies are born so frequently. Some of the outcomes that are expected from the social impact bonds in Texas are a decline in premature births, child emergency room visits, and infant deaths. In this setting, social impact bonds are slated to have a large success rate and create lasting social change.
Would