Urban Institute
Project Associate

Report recap: Learning From Experience: A Guide to Social Impact Bond Investing

April 15, 2016 - 10:19am

In March 2016, MDRC released a new report: Learning From Experience: A Guide to Social Impact Bond Investing. The report draws on The NYC Able Project for Incarcerated Youth and other PFS projects to frame critical decisions and identify central tensions in PFS project design. To move from “bespoke” deals to sustained government interest in the PFS model, projects will have to become standardized, and philanthropies may need to assume a principle role in providing the risk capital needed for innovation, experimentation, and evidence building.

The central tensions they identify will be familiar to many PFS practitioners:

  • How can stakeholders resolve the tension between competing visions of the pay for success (PFS) model as a way to invest in innovation versus a way to replicate proven interventions?
  • What about the tension between inflexible contract terms and unexpected operational challenges?
  • What constitutes “success” when programs can benefit participants or society at large even when they do not yield savings to government budgets?
  • What is the difference between outcomes and net impacts?

“In the end,” the report’s author, Gordon Berlin, points out, “success will depend on committing to a workable balance between risk and reward; to obtaining reliable, rigorous evidence of effectiveness; to moving beyond metrics focused strictly on government savings; to sustaining effective programs beyond the lives of their SIBs; and to accelerating the trend toward the use of evidence in government procurement decisions.”


As an organization, the Urban Institute does not take positions on issues. Scholars are independent and empowered to share their evidence-based views and recommendations shaped by research. Photo via Shutterstock.