Social Impact Bonds

Home The Lab Social Impact Bonds

What are they?

Social Impact Bonds (SIBs) mobilise private capital to invest in social organisations and social entrepreneurs that demonstrate social impact and potential financial return.

  • A SIB is a financial mechanism, through which a public sector entity establishes a contract with social investors, based on specific social outcomes (1).
  • Under that agreement, investors fund a service that tackles a social issue (2).
  • This service is delivered by organisations on the ground and it seeks to improve the social outcomes of a given problem (3).
  • If these social outcomes are achieved (4), the public sector pays the investors back: the reimbursement of their initial investment plus a financial return adjusted to the risk and the achieved level of social outcomes (5).
  • If social outcomes do not achieve a pre-determined level, the public sector doesn’t pay the investors back; investors bear the risks of the intervention.

The First SIB in Portugal

The first SIB in Portugal finances an initiative that focuses on teaching coding to 3rd- and 4th-year students, in three different primary schools in Lisbon.

This SIB was structured by Laboratório de Investimento Social and promoted by a consortium which also includes Calouste Gulbenkian Foundation, the Municipality of Lisbon, Code for All/Academia de Código Junior and Nova School of Business and Economics.

See Infographics

Numbers that characterise it

€120k
Invested by Calouste Gulbenkian Foundation
3
Public Schools in Lisbon
65
Students from 3rd and 4th grade
50
Weeks starting from January 2015
10%
School performance improvement
10%
Logical thinking improvement

The partners of this Social Impact Bond