NEW YORK and BOSTON, July 26, 2011 /PRNewswire/ — The Pershing Square Foundation and Social Finance, Inc. announced today a three-year, $1,500,000 grant to introduce Social Impact Bonds (SIBs) to the United States.
This grant – Social Finance’s largest to date – represents The Pershing Square Foundation’s long-standing commitment to advance social innovation in the U.S. and globally.
Bill Ackman, CEO of Pershing Square Capital Management and founder of The Pershing Square Foundation, said, “We believe that innovative ideas can fuel lasting social change. Social Impact Bonds are a powerful way to bring sustainable change to the most disadvantaged communities across the U.S., and Social Finance has the organizational commitment and discipline to make SIBs work in those communities.”
Social Finance is a Boston-based nonprofit founded in January 2011 to develop, finance, launch, and manage high-quality SIBs throughout the United States.
“We are excited to work with an innovative partner like The Pershing Square Foundation, whose philanthropic investments are geared to support social entrepreneurs and drive systemic change,” Tracy Palandjian, CEO of Social Finance, said, “This generous expression of support will serve as a catalyst in our effort to mobilize new capital to fund the work of high-performing nonprofits and address some of our most intractable social challenges.”
SIB s are a financial instrument in which investors provide capital to nonprofit organizations to implement preventive programs aimed at achieving improved social outcomes that reduce governmental expenditures. If an independent evaluator determines that the improved outcomes have been achieved, the government repays investors their principal and a rate of return; otherwise, investors lose their capital.
Social Finance is currently working with policy makers in a number of states who are considering launching Social Impact Bonds. In May, Massachusetts became the first state in the nation to formally explore implementing this new financing tool for effective nonprofit organizations. In its work in Massachusetts, Social Finance has highlighted a number of proven nonprofit preventive programs that could be considered for a SIB, including permanent supportive housing for chronically homeless individuals; housing-based support for homeless families; home- and community-based aging-in-place programs for elders; community-based alternatives to juvenile detention; and alternative community corrections for adult offenders.
About Social Finance, Inc.
Social Finance is a Boston-based non-profit organization working to connect the social sector with the capital markets and finance effective nonprofit organizations driving social change. Social Finance is independently funded and managed, and leverages the innovative work of its UK-based sister firm, Social Finance, Ltd., which, along with others, pioneered the concept of the social impact bond and offered the first SIB in September of 2010 with the goal of reducing prison recidivism. By structuring and managing innovative investment instruments that align the interest of private investors, entrepreneurial nonprofit service organizations, and governments, we work to improve the lives of individuals, families and communities in need. For more information about Social Finance, visit www.socialfinanceus.org or call 617-478-4300.
About The Pershing Square Foundation
The Pershing Square Foundation, based in New York, was founded in December 2006 by Karen and Bill Ackman. Bill is the CEO and Portfolio Manager of Pershing Square Capital Management. The Pershing Square Foundation supports social entrepreneurs with innovative ideas in areas of critical need in tackling the injustice of poverty globally. Since it was founded, the Foundation has committed over $92 million in grants and social investments, in the areas of economic empowerment, education, health and human rights. The Pershing Square Foundation also supports innovative programs in arts and culture, and actively promotes social entrepreneurship and philanthropy.
SOURCE The Pershing Square Foundation