Lean Business Presentation: The Micro-Social Impact Bond (Week 2) | INFINITE 8 INSTITUTE

Narrated by the Chief Innovation Officer of Infinite 8 Institute, Ean Garrett, J.D., week two of the Infinite 8 Micro-Social Impact Bond Project - Lean Series was filled with discovery. Our interviews varied from venture capital and financial management firms to green and sustainable energy companies. We further streamlined our direction and propositional value of the social impact financing process hoping to maximize overall utility. We look forward to next week already! Keep up with our journey over the next 10 weeks by visiting infinite8institute.com/i8blog

Lean Business Presentation: The Micro-Social Impact Bond Project (WEEK 1) | Infinite 8 Institute

Lean Launchpad Business Model Presentation: The Micro-Social Impact Bond Project (Week 1) narrated by Ean Garrett, J.D.

Can you remember the first time you fell in love? That’s the feeling I first experienced when coming in contact with the Lean process and Business Model Canvas. Developed by Austrian business theorist, author and consultant Alexander Osterwalder, the Lean process and business model are often referred to as the business plan before the business plan. As an entrepreneur, I know first-hand what it feels like to spend lots of money and time creating a business plan, marketing plan, and three-year financial projections only to be completely wrong or ultimately end up with something that looks totally different. 

Lean is a 10-week process designed to take a large part of the risk out of the business and product development approach by actually gathering first-hand experiences and information as opposed to relying purely on assumptions and third-party data (i.e., industry reports or white papers). Many large corporations are utilizing the model to accelerate internal innovation. The model is less known as a tool for Social Innovation. And we love the model so much, this will be our second time formally participating (the first time was for digital currency). If I had the time and resources, I would take every single one of our products through the Lean wash. 

With the release of our Social Impact financing product, the Micro-Social Impact Bond (Micro-SIB), we honestly became overwhelmed with the following requests for such creative financing in varying sectors. And while in the current fast-track process of designing multiple Micro-SIB’s across the United States, we decided that the Lean process was the perfect thing to slow us down, because sometimes to slow down means to speed up. It is only through knowledge and true diligence that one can build something that lasts. We had to ask ourselves, are we building something that will trend? Are we building a house with sticks, or are we benchmarking the Pyramids of Giza? I hope you too said the latter. 

The Lean Process was created for profit-driven businesses in a profit-driven market. However, as a low-profit limited liability Company (L3C), or hybrid between a for-profit and non-profit, we believe in utilizing the results-based for-profit culture to achieve maximum social impact. I remember in Undergrad at Howard University in Washington, DC, that Wall Street and high-paying industries often attracted many of my highest performing colleagues. I was always envious of the efficiency of the profit-driven sector, and always dreamed of applying such rigor to solving some of the world’s most dire problems. Growing up to become a Social Entrepreneur, and through the Lean process, we seek to bring the highest levels of efficiency, effectiveness, and impact to our existing services. 

Over the next 10 weeks we will interview individuals in the philanthropic, public, private, and financial sectors through the world, to streamline a financial impact product that is uniform, transparent, investor friendly, and empowers the overlooked small to mid-size social impact organizations. This past week, we interviewed customers concerning the use of Micro-SIB’s to finance unemployment, low-income housing, and waste reduction efforts. We talked to banking institutions concerning the use of customer’s annual percentage yield (APY) and the use of the Community Reinvestment Act to fund profit-driven Micro-SIB projects. We talked with a public and charter school district, who would prefer private financing to the red tape of government. 

We hope you will join us on our journey to as we seek to revolutionize the way the world finances impact. 

Ean Garrett, J.D., is the author of two books, "Rebirth of a Dream" and "The Immovable Race", as well as the Chief Innovation Officer of the consulting firm, Infinite 8 Institute, L3C, specializing in education and social innovation. Follow him on Twitter & IG: @eangarrett

Usability Test: Drone Technology | infinite 8 institute

View fullsize

A test flight with the IRIS+ Drone by Berkeley-based 3D Robotics as our safety dog does pre-launch inspections.

It is clear that drone technology will disrupt many industries as the usability of the machines advance. While likely difficult for the average consumer, according to our experience, a quicker learning curve for the technology will greatly increase early and late adoption. The current flight times leave more to be desired, but with advances in energy efficiency, we expect overall usability to increase. Also, as the error tolerability of these expensive robotic machines is heightened, it will greatly add to consumer confidence in the technology. From our review, we can foresee many future applications for the technology that will affect entire sectors in the near future.

A key factor in the adoption of any technology or product is its learnability. While flying the IRIS+ drone by Berkeley-based 3D Robotics, the components of the machine were intimidating at-first. The flight controller has a large number of buttons and switches for manual flight. What we believe saves the technology from chasing away the "Average Joe" is the automated flight features. With an Android tablet, we were able to download the Tower application, which gave us a satellite image of our surroundings. The application also gave us the ability to use our finger to draw out a customized flight path right on the tablets screen. The IRIS+ is also an industry leader for its unique “follow-me” feature, which allows the drone to autonomously follow you. The feature works with Android devices as well as Android and Pebble smartwatches. Recently, 3DR announced DroneKit, an open platform for creating web-based and on-board drone applications. Similar to how applications on smartphones hide the complexities of technology, increase smartphone utility, and ease of use, we expect similar results with the advent and evolution of drone applications as well.

Another major test for drones are the limitations of flight time and the resulting call for higher energy efficiency. The IRIS+ uses a lithium polymer (LiPo) battery, providing up to 22 minutes of flight time. If you add a Tarot 2D Gimble (a fancy camera holder) to increase stabilization when shooting video with a GoPro Hero 3 camera, then you can knock off another six minutes, for 16 minutes of total flight time. The obvious answer to us to increase flight time, would be to strap solar powered cells on a drone for increased energy efficiency. However, after quick research we discovered that due to the current size and weight of solar cells, that it would make flight too difficult for the current quadcopter (four propellers) drones. Without increased flight times, there will be limitations to the innovative tasks and functions a drone can make, therefore affecting their early adoption.

While flying the IRIS+ in pretty choppy winds (30+mph), we found the drone to hold its own. The machine was resilient as it naturally stabilized itself in the wind (see video above). The drone controller and application both have Return-to-Launch (RTL) features that direct the drone automatically to return to its point of launch, upon the loss of RC signal, GPS signal (an active GPS signal is required to launch), and low battery (25% battery level). The IRIS+ also has a “Geofence", which is a safety fence that restricts the drone horizontally to 908 feet (300 meters) from the launch point and under 320 feet (200 meters) in altitude. If the drone reaches the end of the fence in either direction, it will automatically return to its launch point. We believe these fail-safe features may be the strongest asset to current drone technology, and will be encouraging to consumers who don’t have another $750 to spend after accidentally losing control of a drone.

Hands-on experience with this technology opens the imagination to the possibilities of future applications. Drones are already hovering mistletoes above holiday customers, delivering Crocs, filming movies and television series, and delivering packages. Facebook even plans to use drones to beam WiFi to remote parts of Africa. Still, further room for innovation remains as we foresee the technology being used to safely provide relief in natural disasters and war zones. The technology could help solve the employment crisis among disabled civilians and veterans. It could even be used to put out forest and residential fires without endangering men and women. In the coming years, forecasters estimate the domestic drone market to reach $82.1 billion by 2025, and to create an estimated 100,000 jobs within the first ten years of widespread commercialization. Large employers are already willing to pay $50 an hour or roughly $100,000 per year for drone pilots and engineers. While such technology will undoubtedly disrupt many industries, affecting job stability across sectors, as consultants it is our job to inform our clients of what is to come unbiasedly, doing our best to prepare them to be successful in the new digital-age. We believe drone technology will play a defining role in the new digital era.

Our experience with drone technology has confirmed our belief in its power to disrupt. But rather than run from what is inevitable, we encourage those on the sideline to actively embrace the technology, and gain mastery early, avoiding the disruption as usability increases. But before disruption becomes imminent, there must be a shorter learning curve to gain user proficiency with the technology. Next, the machines must gain greater energy efficiency in the form of a higher performing battery or the addition of a solar energy integration. However, the technologies ‘fail-safe’ measures may speed up the commercialization and wide-spread consumer adoption of the technology. Although current usability of drone technology may deter some early adopters, the billions of dollars in government and private sector investment, tell us that drones are coming and will likely be here to stay. 

Ean Garrett, J.D., is the author of two books, "Rebirth of a Dream" and creator of the Micro-Social Impact Bond, as well as the Chief Innovation Officer of the consulting firm, Infinite 8 Institute, L3C, specializing in education and social innovation. Follow him on Twitter & IG: @eangarrett

Crowdfunding the First Social Impact Bond for Violence Prevention | infinite 8 institute

On the morning of September 25th, 2014 I walked into our office to find a letter waiting on my desk. It was from the U.S. Department of Health & Human Services. We had been waiting along with our coalition of over 20 local and national organizations for some months now. It was a response to our grant application for $1.5M to fund a violence prevention program in Omaha, NE, a place that at the time was leading America in Black homicides per capita. After penning the eighty page grant myself, I too was eager to discover the results. I tore open the letter and was confronted with mixed news. We had been recommended to receive the $1.5M, but due to budget shortfalls we would not receive funding. What a grim letter I thought at the time. But if it hadn't been for that letter, we would have never been forced to innovate; and there would be no Social Impact Bond.

With $2.4M in outcome payments already solidified, the Omaha SIB for Violence Prevention (OmahaSIB.com) will serve a total of 80 residents annually for three-years in the target area, northeast Omaha, Nebraska (OMNE). The target area was chosen because of its immense need and opportunity to yield substantial results. After completion of the development program, participants will demonstrate proficiency in a set of non-cognitive or intrinsic skill sets and 21st Century Competencies, preparing them adequately to compete in modern global human capital pools. Participants will also gain access to behavior health resources to address instances of Major Depressive Disorder (MDD). Cost-savings to the local and state government are estimated to be $8M over the life of the SIB. Infinite 8 Institute will partner with local community organizations and institutions creating the Non-cognitive Development Institute-Alliance (NDIA). Infinite 8 Institute and the NDIA will specifically accomplish the following: 1) Prevent minority youth from entering special education, 2) prevent youth from entering/re-entering the criminal justice system, and 3) Decreasing or preventing cases of MDD. Through a combination of strategic and coordinated efforts, seeking not only to decrease incidents of violence, but to increase opportunities for long-term competitiveness among the target population in the new global economy.

With extreme poverty, and high unemployment rates, northeast Omaha is a community that is ripe for an SIB. Omaha was recently designated as “The Most Dangerous Place to be Black in America,” by the Huffington Post. Nebraska took the top spot recently for having the highest Black homicide rate per capita out of any state in America in a study conducted by the Violence Prevention Center. According to the article, 90% of homicides in Nebraska occurred in Omaha, half of which were gang-related, and the majority of which occur in the Omaha’s predominantly Black Northeast Omaha community. According to the Northeast Omaha Industrial Park Analysis prepared by the City of Omaha and the Greater Omaha Chamber of Commerce, portions of northeast OMNE also suffer from poverty rates as high as 49.5% and unemployment rates reaching 31.7%, some of the highest in the nation. In comparison, the average unemployment rate for the country Mali in West Africa is 30%, according to the CIA World Factbook. In spite of the violence and bleak socioeconomic conditions plaguing OMNE, there is much opportunity for progress.

The Greater Omaha Metro Area was the recipient of the 2013 Governor’s Cup, ranking first out of America’s top metropolitan areas with populations from 200,000 to one million, and a result of the creation of business climates to attract investment and create jobs. The 2012 unemployment rate for Greater Omaha was 4.4 percent respectively. As recent as May 21, 2012, Fortune Magazine identified five of the largest 500 companies in America as residing in the Omaha area. In July, 2012, CNBC ranked the State of Nebraska as #6 on its “Top States for Business” list. Omaha has received such national recognition for its technology sector, telecommunications, and power infrastructures, with favorable cost-environments and a highly skilled workforce. Considering the economic deprivation so close to opportunities for prosperity, it is our vision to address MDD stemming from causes associated with poverty and unemployment. Organizations implementing non-cognitive developmental curriculum will utilize it as a tool to consistently create a highly skilled and competitive workforce, to improve the behavioral health of local populations, and to create a common language and consistent human development theoretical framework across organizations.

The SIB will provide training and supplementary programming to 80 youth at the intermediate, middle, and secondary levels of education (ages 10-18), as well as creating consistency among curriculum with early childhood and post-secondary educational partners. The SIB also will be supported by trained staff and consulted by a network of youth, parents, service providers, and high skilled professionals. Additionally, eight trained and well-educated, competitively compensated, part-time staff, as well as independent contractors delivering specialized curriculum, will visit NDIA partner organizations to deliver curriculum, provide programmatic consulting, provide resources and training, and serve as role-models and mentors to the target population.

Crowdfunding is a great tool to match investors, and bring something monetarily tangible to the table. We chose to crowdfund for the flexibility and freedom. We do not believe the at-risk youth of Omaha deserve to wait any longer. And so we open up the cause to the world and for all of mankind to collectively decide the urgency or validity. It also is a conservative approach to give supporters something of value in return for their monetary support. We have gone further by offering the philanthropic and private sector tax-deductible work-related training on the following topics: Emerging Technologies (Digital Currency, Drone Technology, Mobile Technology, Green Technologies, and 3D Printing), Corporate Social Responsibility, Non-cognitive Development, Mindfulness Meditation, Corporate Crowdfunding, and Social Impact Financing. Organizations can choose one or multiple trainings, customizing their experience. There are also plenty of rewards for individual contributions. It is our hope that by creating successful outcomes on such a difficult issue that similarly situated organizations around the world will become empowered likewise to do so. If you’d like to help us create history by supporting our crowdfunded SIB today, visit our project website OmahaSIB.com by clicking here!

·         Stage: Design

·         Social Issue: Violence Prevention

·         Up-front Costs: $1.5 million

·         Duration: 3 years

·         Outcome Payments: $2.5 million

·         Metrics: Reduced episodes of Major Depressive Disorder; preventing participants from entering the special education system; and preventing participants from entering or reentering the criminal justice system.

Ean Garrett, J.D., is the author of two books, "Rebirth of a Dream" and creator of the Micro-Social Impact Bond, as well as the Chief Innovation Officer of the consulting firm, Infinite 8 Institute, L3C, specializing in education and social innovation. Follow him on Twitter & IG: @eangarrett

What is a Micro-Social Impact Bond? | infinite 8 institute

World Bicycle Relief is a global non-profit organization providing transportation relief to the worlds poor. 

The Social Impact Bond (SIB) could be referred to as the Maybach of Social Impact, but in the fast lane of the new digital age, the market is craving something a little more sporty. Evidence suggests that the most efficient way to meet the immediate global need for social impact, is to micro-size the SIB. Three factors inhibit the SIB from maximizing its efficiency: creation time, bulk, and dimension. As a result, there lies impressive potential for a more lean social impact financing instrument that will fuel future social impact and innovation, the Micro-Social Impact Bond (Micro-SIB).

One of the major issues stifling the growth and potential of the SIB is the extended time it takes to actually create and implement one. The number of SIBs in the design phase far out-weigh the number of those actually being implemented. The amount of time it takes to create SIBs also eats away at critical time that could be spent discovering. Additionally, there are societal issues that simply cannot wait for elongated processes, such as violence, natural disasters, or virus outbreaks. Although these processes would naturally improve over time, a reduction in the time frame of the design phase would considerably increase the overall volume of SIBs. With a new agility and overall utility, less actually means more for Micro-SIBs.

View fullsize

The Micro-SIB is a registered trademark of Infinite 8 Institute, L3C, provided open-source to the global community. 

Another factor hindering SIBs involves the large volume of capital investment, which can be a hard sell to risk-adverse investors in an unstable and tumultuous global market. Many SIBs have ranged from $238,000 USD in up-front capital to $30 million USD in outcome payments. With a smaller and more definitive initial investment threshold of $1-$5M USD for Micro-SIBs, the amount of up-front investment becomes more palatable for a larger pool of investors in today’s volatile markets. A school in West Africa we are currently consulting, has a capacity of 80 children operating annually on a $7,000 USD budget, making a multimillion dollar deal far from necessary. Lower capital requirements in the form of a Micro-SIB, also empowers many entrepreneurs and grassroots organizations all over the world by lowering the entry point for creating an SIB. 

The last limitation of SIBs involves its 3-dimensional nature. The creation of an SIB traditionally involves up-front investment from the private and/or philanthropic sector, with intermediaries facilitating the process, and the government paying for positive outcomes. The service provider has been excluded from this 3D model for clarification purposes, due to the lack of economic power service providers bring to the final contractual agreement necessary to create an SIB. SIBs would benefit from a diversification of fund-raising tools, in particular the tool of crowd-funding in order to cover up-front programming costs, adding a 4th-dimension to the model. Such a strategy will allow smaller, less prominent organizations, more leverage and power at the bargaining table. They are then able to match donors with crowd-funded capital, lowering investor risk while further enhancing programmatic freedom, the number of potential outcomes, and overall innovation. Also, the Micro-SIB allows for the optional use of Bitcoin, creating a 5th-dimension by allowing for transaction fees to be minimized to less than .01%, meaning further cost-savings and a larger percentage of invested capital going towards funding the social impact it was intended to fund.

The majority of existing SIBs also rely on the government to pay for outcomes. The involvement of government and its often inefficient bureaucratic make-up tend to immensely slow down the creation time of SIBs. Philanthropists or the private sector may be better and more nimble parties to fill these roles, allowing the more risk-adverse Outcome Investor to pay for positive outcomes or successes on the back-end, with less risk-adverse Upfront Investors willing to put up all or part of the initial investment to pay for programming; but with the promise of attractive returns above the market average upon achieving successful outcomes. Philanthropists and the private sector would then be in a more capable position to petition government to split real cost-savings resulting from social impact. Furthermore, the government can repay philanthropists or the private sector with funds such as the Human Capital Performance Bond (HUCAP) in Minnesota (US), or with tax write-offs for investments made that benefit not only non-profits/501(c)(3)'s, but also social business infrastructures (L3C’s [US], B-corp’s [Int’l], SBC’s [US], Co-op’s [Int’l], and CIC’s [UK]). The result will be the creation of jobs, economic investment and/or growth, and an incentive for the global private sector to free up some of their $7 trillion dollars in cash reserves.

It was Muhummad Yunus who revolutionized the global financial industry by creating the micro-loan. It is in a similar vein, that we believe the Micro-SIB will bring social innovation and financial opportunity toward addressing not only social impact, but also economic impact, health impact, and environmental impact on a global scale. Pope Francis more recently stated, “That is the purpose of our mission: to identify the material and immaterial needs of the people and try to meet them as we can.” Through the creation the Micro-SIB, we too seek to accomplish an analogous mission, to create a more agile and capable impact financing instrument for the betterment of the universal human condition. We believe the Micro-SIB is a firm step towards achieving those ideals. 

Learn more about how your organization can benefit from Micro-Social Impact Bonds by clicking here. We look forward to hearing your comments!

Ean Garrett, J.D., is the author of two books, "Rebirth of a Dream" and "The Immovable Race", as well as the Chief Innovation Officer of the consulting firm, Infinite 8 Institute, L3C, specializing in education and social innovation. Follow him on Twitter & IG: @eangarrett

Worlds Top 10 Social Impact Bonds | infinite 8 institute

Chicago Mayor Emanuel announcing the $17 million dollar Social Impact Bond for Early Childhood Education

Here at Infinite 8 Institute, we are constantly searching the world for the foremost innovation in the fields of global social impact and international development. After much studying and debating we comprised a list of 10 Social Impact Bonds (SIBs) that stood out. SIBs are a relatively new investment instrument, using private and philanthropic sector investors to front funds for promising programs that benefit society. Unlike government bonds, where a return is guaranteed, SIB investors only make a return on investment upon successfully achieving pre-agreed upon outcomes. As a result, the state saves tax-payer dollars by only paying for what works. The variety of SIBs and the enthusiasm they have garnered in recent years has made them a hot topic in legislative chambers, board rooms, and community meetings around the world.

Yet, why analyze SIBs or give them weight at all? In light of the heightened attention, it seemed justifiable to further analyze each of them, and categorically contemplate them, in an effort to seriously consider the overall importance and potential of each to create maximum social impact. The categories we chose to minimize consideration to include: current stage, social issues, initial costs, duration, outcome payments, as well as metrics for the convenience of the reader. Although each of the current SIBs currently being considered around the world are all addressing worth-while societal problems, these ten we felt were the most promising.

10. South Africa, Capetown – Alternative Dispute Resolution

South Africa is currently considering the implementation of an SIB to address the cost inefficiencies in the nation’s criminal justice system. The Impact Trust and Khulisa are working to design such an SIB to raise investment capital to fund holistic intervention in the criminal justice system through the provision of an Alternate Dispute Resolution (ADR). Benefits of ADR’s include reducing court backlogs, shortening or avoiding pre-trial prison-stays for petty offenders, while achieving cost-savings and bureaucratic efficiency. There are currently three pilot programs being considered for testing and scalability. According to BD Live, the National Treasury of South Africa, is also conducting a feasibility study as well.

• ·         Stage: Design
• ·         Social Issue: Criminal Justice
• ·         Up-front Costs: N/A
• ·       Duration: N/A
• ·         Outcome Payments: N/A
• ·         Metrics: N/A

9. Israel – Workforce Development for Arab Citizens of Israel

The Israel Arab Workforce Development SIB is currently in the development stage and being facilitated by Social Finance Israel. The SIB aims to increase employment opportunities for Arab citizens of Israel. The Arab population of Israel is expected to constitute 20% of the total population of the state by 2020. Of the significant proportion, 50% of Israeli Arabs live in poverty, compared with 20% of all Israelis. The SIB also seeks to increase the rate of workforce participation among women. The SIB will go toward providing capital for non-profit organizations who are able to increase employment rates among the identified target populations. The societal issues associated with successfully and equitably integrating immigrant and minority populations, has proven to be an essential problem on a global scale, with ethnic clashes in the Middle East, Africa, and more recent the United States to name a few.

• ·         Stage: Design
• ·         Social Issue: Workforce Development for Arab-Israeli Citizens
• ·         Up-front costs: N/A
• ·         Duration: N/A
• ·         Outcome payments: N/A
• ·         Metrics: Increased employment rates

8. UK, London – Homelessness

Launched in 2012, by the Greater London Authority, St. Mungos and Thames Reach are delivering an SIB to improve the outcomes of 831 of London’s persistently “rough sleepers”. The SIB seeks to reduce the size of the initial cohort over a period of 3-4 years. In 2012 there were 6,437 homeless in London, showing a strong need for improved services and outcomes among the homeless population. Thus far, service providers have more recently improved by meeting targets after showing initial struggles to do so. With more than 100 million people estimated to be homeless around the globe, we believe the UK’s SIB is deserving of a place on the list.

• ·         Stage: Implementation
• ·         Social Issue: Homelessness
• ·         Up-front Costs: ₤2.4 million
• ·         Duration: 3-4 years
• ·         Outcome Payments: ₤5 million
• ·         Metrics: Reduced number of rough sleepers each quarter; entry into non-hostel tenancy            and sustained for 10 months; confirmed re-connection outside of the UK; sustained                    volunteering, PT, or FT employment; and reduction in accident or emergency episodes.

7. UK, Essex County – Fostercare

In 2012 the Essex County Council became the first county to launch an SIB to improve outcomes for young people and their families on the edge of care or custody. The SIB will provide Multi-Systematic Therapy (MST) to 380 young people and their families, who are at-risk of entering care over an 8-year period. With an estimated total of 153 million infants, toddlers, and young people orphaned around the world, and with that number only set to increase with war, epidemics, and natural disasters, we believe keeping young people out of systematic custody is a global issue deserving of attention.

• ·         Stage: Design
• ·         Social Issue: Fostercare
• ·         Up-front Costs: ₤3.1 million
• ·         Duration: 5 years
• ·         Outcome Payments: ₤7 million
• ·         Metrics: Reduction in average days spent in care

6. India, Rajasthan – The Gender Gap in Education

India is currently considering an SIB aimed at educating girls while addressing high drop-out rates and poor education quality. India’s large gender gap in education hinders its economic development, with over 60% of out-of-school children being girls. Of girls who dropped out, 42% say they did so because their parents told them to quite. As a result, 47% of children in grade 5 cannot read a paragraph in their own language. The problem is concentrated in Rajasthan, which has 9 of the 75 worst districts. The goal of the SIB is to educate girls while addressing high drop-out rates and poor education quality. According to the World Economic Forum, India Ranked 114th out of 200 countries overall for gender disparities and 126th for the gender gap in education. Therefore the gender gap in the education sector is a significant societal issue to address.

• ·         Stage: Design
• ·         Social Issue: Gender Gap in Education
• ·         Up-front Costs: $238,000
• ·         Duration: 3 years
• ·         Outcome Payments: N/A
• ·         Metrics: Increased enrollment of girls in school; increased attendance in school and continued enrollment over several years; and improvement in learning and test scores.

5. Colombia, Medellin – Teen Pregnancy

The Company Instiglio, is currently exploring, designing, and potentially implementing an SIB to reduce teen pregnancy rates in Antiquia, Colombia. In Colombia, over 16% of girls 13-19 have been pregnant or are mothers. Each year in Medellin, girls aged 10-19 give over 20,000 live births, coming out to 38 births per 1,000 girls. Often serving as a critical road block for the development and prosperity of young women, addressing teen pregnancy is critical, especially among developing nations. With the world set to approach 10 billion people by 2050, it is imperative to discover productive methods for balancing global birthrates, and Colombia’s SIB could very well be a step in the right direction.

• ·         State: Design
• ·         Social Issues: Teen Pregnancy
• ·         Upfront-costs: N/A
• ·       Duration: 4-5 years
• ·         Outcome Payments: N/A
• ·         Metrics: Reduction in teen pregnancy rates; increased educational outcomes among girls 

4. US, Chicago – Early Childhood Development

This past year Chicago announced the launch of an SIB aimed at improving outcomes for at-risk youth. The State of Illinois, collaborating with a coalition of Chicago-based social service agencies, seeks to reduce the number of children who end up in special education, as well as in group homes, or as wards of the state. Initial funding will pay for roughly 2,600 low-income 4-year olds to attend child-parent centers that provide preschool, support services, and strong parental engagement. With the United States, for example, spending roughly $77.3 billion public dollars alone during the 1999-2000 school year on special education, in addition to the method of starting with a child as early as possible to achieve positive outcomes, we decided that the Illinois SIB belonged among the top five. 

• ·         Stage: Design
• ·         Social Issue: Early Childhood Development
• ·         Up-front Costs: $17 million
• ·         Duration: 16 years
• ·         Outcome Payments: Up to $30 million
• ·         Metrics: Based on number of participants using special education services. 

3. Uganda – Access to Quality Secondary Education

Uganda introduced free universal education in 1997, exploding net enrollment in primary schools to 97% in 2011. In 2007, it became the first Sub-Saharan African country to introduce universal secondary education, free to any child who passes the PLE, or Primary Learning Exam. However, there is still a lack of schools, and limited infrastructure, meaning that an estimated 75% of secondary-aged children in Uganda are not enrolled in secondary school. Additionally, with the population of African youth projected to double by 2045, and the increased quality of education and student outcomes being vital toward the future stability, economic growth, and security of Africa, we chose Uganda to come in third.

• ·         Stage: Design
• ·         Social Issue: Quality in Secondary Education
• ·         Up-front Costs: ₤23 million
• ·         Duration: 10 years
• ·         Outcome Payments: up to ₤35 million
• ·         Metrics: Increased number of secondary school places resulting from SIB investment – linked to school attendance and potentially verified through unannounced school visits by an independent evaluator; and Level of UCE (lower secondary) exam results in SIB funded schools achieved, relative to historical district-level performance.

2. Swaziland – HIV/TB Prevention            

According to UNAIDS, world-wide there were an estimated 1.5 million AIDS-related-deaths in 2013, and the epidemic continues to spread globally more quickly than it can be contained. Swaziland has the highest HIV prevalence in the world, with 26% of the population aged 15-49 infected. Swaziland also has the world’s highest Pulmonary Tuberculosis (TB) rate per capita (1,317 cases per 100,000). Combined, taking a total of roughly 3 million lives per year, comprising the two most deadly infectious diseases in the world, Swaziland’s HIV/TB Prevention SIB came in a close second.

• ·         State: Design
• ·         Social Issue: HIV/TB
• ·         Up-front costs: $10 million
• ·         Duration: 3 years
• ·         Outcome Payments: N/A
• ·         Metrics: Increase the proportion of HIV-positive individuals alive and on antiretroviral treatment and ultimately to reduce HIV incidence; the model will also take into account indicators linked to impact on transmission including: uptake of HIV testing, acceptance of ART, retention of individuals in care, and viral suppression.

1. UK, Peterborough - Recidivism

In the UK, the first-ever SIB was created to reduce reoffending through preventative social programs to improve the lives of under-served populations. The results of the four-year project have come back positive, reducing the reoffending rate by 8.4 percent when compared to the control group. Following the release of the results, the Ministry of Justice plans to extend similar rehabilitation services to all offenders across the U.K. As a result of sparking a global movement, in addition to the achievement of positive outcomes, the Peterborough SIB is our top pick among the worlds existing SIBs.

• ·         Stage: Implementation/Scaling-up
• ·         Social Issue: Recidivism
• ·         Up-front Costs: ₤5 million
• ·         Duration: 8 years
• ·         Outcome Payments: Up to ₤8 million
• ·         Metrics: Number of re-conviction events during the 12 months following release

Learn more about how your organization can benefit from Social Impact Bonds by clicking here. 

Ean Garrett, J.D., is the author of two books, "Rebirth of a Dream" and "The Immovable Race", as well as the Chief Innovation Officer of the consulting firm, Infinite 8 Institute, L3C, specializing in education and social innovation. Follow him on Twitter & IG: @eangarrett