Social Impact Bond - SIB
Categories: Ethics/Morals
Want to buy a bond and do something for the good of society? Well, don’t look into Social Impact Bonds (SIBs) then...because they’re not actually bonds.
SIBs aren’t actually bonds, because the investor who buys them only gets repayment if the desired social outcome of the investment vehicle is reached. If the social outcome never comes to fruition, the investor losses the investment. Still, SIBs are great for those looking to make a social impact...just without the guaranteed payout you’d expect to eventually receive from a bond. So yeah, they’re risky. Rather than being affected like bonds by interest rates, reinvestments, and the market, SIBs are totally dependent on whatever social impact is written on the investment vehicle.
While Social Impact Bond proponents argue they’re doing great things, the government stays away from them, since they can’t quantify the impacts. They just don’t know how to justify pumping money into something where they can’t measure the returns.
What kind of social outcomes do SIBs aim for? Well, the first one was issued from a UK prison in 2011 to reduce recidivism rates for short-term prisoners to a certain level. How big the returns are depends on just how low they can get those recidivism rates.
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Finance: What is a Moral Obligation Bond...7 Views
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well you have good morals or you feel morally obligated
to pay hey if you don't necessarily legally have to
pay it but you're morally obligated Teo do so let's
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shapes and sizes that is on a lone dusty highway
west of omaha a tiny city wants to build a
trucker parking hub with excellent hot dogs clean ish showers
and a mud flap emporium They need three million bucks
to build this thing for the kindly loving truckers while
it's still human beings doing nothing and well on their
own city can't afford it the state realizing how good
this depot would be for commerce in business coming into
and out of the state they decide to guarantee the
bonds of that little city The city is backing it
without reams of paper a forest full of paper sign
contracts or any other major structural legal limits in practice
The bonds air publicized as a gift to the area
and they create extreme embarrassment to the politicos who backed
it Should that bond ever fail That is whoever's managing
the facility and supposed to collect the you know shower
tuition from the truckers stops collecting it and or the
truckers find somewhere else to go with mohr cleanest showers
or this is a municipal moral obligation bond but the
term applies to bonds that are not government backed as
well The holy rollers church of greater baltimore is raising
money to replace all the stained glass windows that have
been broken by you know errant baseball's from the neighboring
field They get each of their congregants toe loan the
church three grand and no they're not passing contracts along
with the collection plate there's nothing in writing saying that
the church will use that money to replace the windows
they promised or because the members let the church get
their dough back The church has a moral obligation to
pay back the money that they were loaned to make
good on their promise and if they default well they'll 00:02:10.823 --> [endTime] have to answer to the big guy in charge