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International: The Rockefeller Foundation
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THE Rockefeller Foundation Grants Social Finance, Inc.
$500,000 to DEVELOP Social Impact Bond Market
in the United States
Innovative Instrument
Aims to Provide Critical Financing Solution to Some of
the Most Persistent Social Problems in the U.S.
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NEW YORK and BOSTON, MA, SEPTEMBER 7, 2011 –
The Rockefeller Foundation announced today a
$500,000, two-year grant to support Social
Finance, Inc.’s innovative work in
developing the Social Impact Bond (SIB)
market in the United States.
“In this economy, as most major American
cities and states are facing staggering
budget deficits, the Social Impact Bond
represents an innovative financing structure
that could revolutionize the manner in which
persistent social problems are funded and
addressed - while linking the government and
the private sector in a partnership to save
taxpayer dollars,” said Dr. Judith Rodin,
President of the Rockefeller Foundation. “As
such, we are excited to support Social
Finance in testing and developing the Social
Impact Bond model here in the United
States.”
Social Finance is a Boston-based nonprofit
founded in January 2011 to develop, finance,
launch, and manage high-quality SIBs
throughout the United States. “We are
excited to work with the Rockefeller
Foundation, who is a leader in both
nurturing innovation and advancing the field
of impact investing,” said Tracy Palandjian,
CEO of Social Finance. “We are looking
forward to adding social impact bonds to
Rockefeller’s long legacy of pioneering new
fields and leveraging investment capital to
improve the lives of the poor and vulnerable
and drive social change.”
The Social Impact Bond is a financial
instrument that aims to align the interests
of private investors, entrepreneurial
nonprofit service organizations, and
governments in an effort to impact poor and
vulnerable communities. Investors provide
capital to nonprofit organizations to
complement existing tools and implement
preventive programs aimed at achieving
improved social outcomes and reducing
governmental expenditure. If an independent
evaluator determines that the improved
outcomes have been achieved, the government
repays investors their principal and a rate
of return; otherwise, investors lose their
capital.
Social Finance is currently working with
policy makers in a number of states who are
considering launching Social Impact Bonds.
In May, Massachusetts became the first state
in the nation to formally explore
implementing this new financing tool for
effective nonprofit organizations. In its
work in Massachusetts, Social Finance has
highlighted a number of proven nonprofit
preventive programs that could be considered
for a SIB, including permanent supportive
housing for chronically homeless
individuals; housing-based support for
homeless families; home- and community-based
aging-in-place programs for elders;
community-based alternatives to juvenile
detention; and alternative community
corrections for adult offenders.
* * *
Social Finance is a Boston-based
non-profit organization working to connect
the social sector with the capital markets
and finance effective nonprofit
organizations driving social change. Social
Finance is independently funded and managed,
and leverages the innovative work of its
UK-based sister firm, Social Finance, Ltd.,
which, along with others, pioneered the
concept of the social impact bond and
offered the first SIB in September of 2010
with the goal of reducing prison recidivism.
By structuring and managing innovative
investment instruments that align the
interest of private investors,
entrepreneurial nonprofit service
organizations, and governments, Social
Finance works to improve the lives of
individuals, families and communities in
need. For more information about Social
Finance, visit
www.socialfinanceus.org.
The Rockefeller Foundation mission to
promote the well-being of people throughout
the world has remained unchanged since its
founding in 1913. Today, that mission is
applied to an era of rapid globalization.
Our vision is that this century will be one
in which globalization’s benefits are more
widely shared and its challenges are more
easily weathered. To realize this vision,
the Foundation seeks to achieve two
fundamental goals in our work. First, we
seek to build resilience that enhances
individual, community and institutional
capacity to survive, adapt, and grow in the
face of acute crises and chronic stresses.
Second, we seek to promote growth with
equity in which the poor and vulnerable have
more access to opportunities that improve
their lives. In order to achieve these
goals, the Foundation constructs its work
into time-bound initiatives that have
defined objectives and strategies for
impact. These initiatives address
challenges that lie either within or at the
intersections of five issue areas: basic
survival safeguards, global health,
environment and climate change,
urbanization, and social and economic
security. For more information, please visit
www.rockefellerfoundation.org .
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