Gov. John Hickenlooper joined Denver Mayor Michael B. Hancock to announce today that Colorado and Denver were selected as one of six state and local governments to receive assistance to develop social impact bond (SIB) projects in the national Harvard Kennedy School SIB Lab competition, sponsored by The Rockefeller Foundation. The funding will help develop pay-for-success contracts for prevention-oriented social programs using the SIB model.
"Colorado is excited to be among this collective to strategically look at the role social impact bonds might play in solving some of our more complex social issues such as homeless and early childhood development," Hickenlooper said.
In the SIB model, governments partner with service providers and private sector investors to fund social programs. Investors are repaid only if and when improved social outcomes are achieved. SIBs have the potential to open new funding sources for prevention-oriented programs that deliver measurable social benefits and save taxpayer dollars in the process.
"Denver is honored to have been selected to explore this innovative new strategy to finance solutions to some of our most difficult social issues. We look forward to the opportunity to work with our nonprofit and business partners to bring this resource to Denver and develop a model that can be used by other cities," Hancock said.
The Harvard Kennedy School SIB Lab competition is supporting state and local governments across the country to build capacity for this innovative financial approach to fund prevention-oriented social programs. The SIB Lab announcement marks the largest expansion of social impact bond initiatives in the United States to date, and the first SIB project to be developed in Colorado.Established with support from The Rockefeller Foundation, the SIB Lab at Harvard Kennedy School conducts research on how governments can foster social innovation and improve the results they obtain with their social spending. Over the past year, the SIB Lab has helped Massachusetts and New York become the first states to develop pay-for-success projects.
Kippy Joseph, associate director for innovation at The Rockefeller Foundation, said: "Social impact bonds have traveled from concept to execution faster than any other social innovation in recent history, and we commend Governor Hickenlooper and Mayor Hancock for taking steps to make Colorado one of the leaders in the field. The SIB Lab Competition is the next big leap forward for SIBs in the United States, demonstrating the power of public-private partnerships to provide sustainable solutions to the funding problem for critical social services, while creating an environment for impact investors to test this exciting new form of innovative finance."
Winning state and local governments announced as part of the SIB Lab Competition include Connecticut, Denver/Colorado, Illinois, New York, Ohio, and South Carolina. The six winning state and local governments will receive pro bono technical assistance to help design, procure, and implement these policy initiatives, and plan to address issues ranging from early childhood education to services helping elders remain in their homes and avoid nursing homes.
Jeffrey Liebman, professor of public policy at Harvard Kennedy School and SIB Lab director: "The SIB Lab at Harvard Kennedy School is excited to be working with Colorado in trying to achieve better outcomes for their citizens and make more effective use of taxpayer dollars. In these challenging fiscal times, governments around the country are looking for new strategies to finance preventive investments and spur social innovation. The pay for success approach has the potential to generate scalable solutions to some of our nation's most pressing social problems."