Social Impact Housing Investing
Social impact investments have not only become more ‘socially acceptable’ financial investments in recent years, but have become much more accessible with a variety of ways to invest with a ‘triple bottom line’ mindset.
Social Impact Bonds
Social Impact Bonds (SIBs) are an outcomes-based (pay-for-success) model where private investors contribute debt capital to fund projects with social goals. Repayment to investors is contingent upon achieving certain program targets. The repayment will be less if outcomes are not achieved.
Denver has used social impact bonds for affordable housing, tying success payments to one year of housing stability and a decrease — at least 20 percent — in jail-bed days. Read more.
Impact investing funds are premised on the idea that investing in the right companies can help solve social problems while investors make market-rate returns. It is estimated the global impact investing market is over $500 billion, with more than 1,300 impact investors around the world.
See some of the largest social impact funds in the world, listed here.
Private philanthropy can leverage public funds to increase their impact. For example, in Los Angeles, The Home For Good Funders Collaborative – of partnership of more than 30 public and private funders, seeded by a $1 million challenge grant from the Conrad N. Hilton Foundation
to the United Way in 2011 – have committed over $33.5 million in philanthropic investment, which has leveraged over $1 Billion in public resources towards ending homelessness (learn more).
Social Impact Bond Research:
- Denver: https://www.denvergov.org/content/denvergov/en/mayors-office/newsroom/2019/three-years-into-denver-s-innovative-social-impact-bond-program-.html
- Sacramento: https://socialfinance.org/wp-content/uploads/PFS-Persistently-Homeless-Sacramento.pdf
- Los Angeles County (RAND report): https://www.rand.org/blog/rand-review/2018/06/supportive-housing-reduces-homelessness-and-lowers.html