I Social Impact Bond

[Autom. eng. transl.] The growing gap between the needs deriving from social benefits and the actual availability of public budgets raises a series of questions on how to find and use private resources in financing welfare needs. The Social Impact Bond (SIB) is the most original technical form of impact investing, which provides for a return on investment only if it produces a significant social impact. The idea is to make innovative welfare projects fundable, capable of generating both social benefits and savings in public spending, which would hardly be implemented due to the risk aversion of both the public administration and the social worker. The investor, who by nature manages risks in exchange for adequate remuneration, facilitates social innovation by taking the risk of failure by linking the remuneration of the investment to the success of the project. A specialized intermediary filters the best projects to propose both to the public administration and to intermediaries. The SIB, however, despite promising development prospects, is still limited in scope. The themes of information asymmetry, adverse selection and incentive alignment are examined in the volume with reference to the SIBs and allow a reflection on the obstacles to be removed for a full development of this promising financial product. The terminology, logic and volume approach serve a dual purpose: on the one hand, they provide practitioners and scholars with the evaluation elements on critical aspects that hinder the full development of this sector of investment; on the other hand, they translate social innovation into financial language, indispensable for those who intend to turn to investors and financial markets.