Interactive Graphic: Social Impact Bonds Explained

Take a thirty seconds for this explainer on the hot new idea for paying for social services—that let's private investors earn a profit too.

We've covered the exciting idea of Social Impact Bonds in the past here at GOOD. But it's getting much more attention now that President Obama has announced his support for this British idea to get private investors to pay for public services, like housing for the homeless, health care for vulnerable populations, or even education. It could work for anything that can save the government money in the long run but costs money up front, as long as we can measure it.

And while it's great that our government is ready to innovate in a way that pays for prevention—and finally gives our nonprofits a tool for long term, capacity-building funds—Social Impact Bonds are pretty complicated to explain, and to sell. They'll need to be understood if they are to be widely adopted.

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