Rockefeller Foundation Sees Social-Change Dividend

Tuesday, February 15, 2011

The Rockefeller Foundation is banking on paying for social change that works.

To that end, the foundation will this week announce a $400,000 grant to the Nonprofit Finance Fund, a nonprofit financing organization, for a number of projects that will help bring the concept of so-called social-impact bonds to the U.S.

Originating in the U.K., social-impact bonds encourage private investors and philanthropic foundations to fund privately managed social programs in areas such as health care and prisoner recidivism. If the programs succeed in reaching previously set targets-and social outcomes improve-investors receive so-called success payments from the government. If the programs don’t work, the government pays nothing. In these scenarios, investors take on all the risk and the government pays only for programs that work.

“When money is tied to outcomes, rather than inputs, it increases the efficiency of how taxpayer money is used and steers more money toward nonprofits that are successful,” says Antony Bugg-Levine, a managing director at Rockefeller.

Source: The Wall Street Journal (link opens in a new window)

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