Social Impact Bond
Rehabilitation of Prisoners Case
Ms. Michal Engelberg, Dr. Rachel Azurel Calipha, Prof. Vered Holzmann
The Academic College of Tel Aviv-Yaffo
Social Impact Bonds are based on public-private partnerships to provide effective social services through performance-based contracts. Investors from the private sector provide funds for the development and expansion of solutions to social problems, with the aim of reducing negative impact while also creating a financial return. Intervention programs, made feasible by private capital, are expected to demonstrate measurable benefits (“pay for success”) and therefore, will generate public value for which the government or public bodies will repay the private investors.
Social Finance Israel (SFI) was established in 2013 to promote the flow of capital towards solving social issues in Israel using innovative financing tools. SFI is the leading developer of Social Impact Bonds in Israel, and has launched several successful Social Impact Bonds. However, not all initiatives are successful and here, the SFI team shares with us the story of initiating a Social Impact Bond for prisoners’ rehabilitation, which was not realized because of several reasons.