Common Good VT Update on Social Impact Bonds

This update comes from Liz Ruffa, Special Projects at Common Good Vermont. She delivered this report at Vermont Nonprofit Legislative Day at the Statehouse on 3/23/17.

In an effort to diversify funding opportunities for Vermont’s nonprofit sector, Common Good Vermont has stepped up its research and outreach regarding Social and Environmental Impact Bonds, also known as Pay for Success (PFS) transactions.

Common Good Vermont has been following various new paradigms for financing state & nonprofit partnerships.  We maintain that invigorating alliances between philanthropy, government and the social sector will produce better, more sustainable results for the sector & that a different approach to capitalizing this work can deliver the positive results that we collectively seek.

Impact Investing leverages opportunities for nonprofit organizations and government agencies to improve program outcomes through private sector partnerships.

Pay for Success  provides a unique opportunity for communities to direct resources toward programs that are intended to measurably and meaningfully improve lives in an issue of local importance.

In these models, private investors (e.g., foundations, philanthropists, and social impact investors) provide program funds, and the “end payor” (e.g., a government, health care system, etc.) returns that investment after an impartial evaluator finds that the program is working.

This approach to funding social programs provide governments and service providers with the ability to link funding with outcomes, which puts the focus back on whether individuals and families are measurably better off.

When Common Good Vermont started this research in 2014, there were five Pay for Success Impact Bonds in play. Now there are over 60 in assessment, structuring or transaction phases across the United States.

Leading PFS policy areas include early childhood education, homelessness, recidivism and workforce development. Emerging policy areas include public health, supportive housing, food access & water quality.

Common Good Vermont has established working relationships with national leaders in this space, namely: Nonprofit Finance Fund, Third Sector Capital Partners, Harvard Kennedy Government School, The Case Foundation & Sorenson Impact Center.

By hosting meetings, conducting research attending conferences & briefings and following this emerging industry,, we have watched the Impact Investing arena take hold.

These groups continue to be impressed with Vermont’s nimbleness, our understanding of Results Based Accountability and Collective Impact and point to our size- we are the size of Denver, or Seattle – as it relates to scaling projects and measuring what matters.

Here in Vermont, we have connected with the Agency of Human Services, Bank of America, The City of Burlington, Department of Environmental Conservation, Fresh Tracks Capital, The Permanent Fund for Vermont’s Children, Vermont Energy Investment Corporation, Vermont Community Foundation and Community Loan Fund, the Governor’s Office & the State Treasurer’s Office, among others, to advance this critical thinking & its opportunities.

To date, we have helped state agencies obtain technical assistance to determine project readiness and have connected with groups across sectors to explore the possibilities of this new model for their work together.

Common Good Vermont’s role as an intermediary organization to build capacity for Pay for Success and Impact Investing in Vermont, will ensure that nonprofit service providers, state agencies and funders are all aware of the potential that Pay for Success, Performance Related Investing and Impact Investment strategies bring.

We are happy to announce a new partnership with the Sorenson Impact Center. Based at the Sorenson Business School at the University of Utah, Sorenson Impact is a national leader in Pay for Success feasibiltiy structuring. This partnership will allow for technical assistance and literacy to spread across the State as we offer assessment, structuring and transaction assistance to policy makers, government agency heads and financiers. It is our hope that this Impact Incubator will develop into an Impact Accelerator for projects.

Through convenings, research and strategic partnership building, our aim is to synchronize measurable, performance-driven opportunities with financial resources in thoughtful, achievable ways. Pay For Success offers the potential to drive better results for Vermont, making our vulnerable populations safer & our state economies more stable.

We look forward to broadening and deepening this work, continuing to bring relevant information to your attention and setting Vermont up for success in this field.



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