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Golden egg in egg cupTight government budgets and growing demands for services drive the growth of social innovation financing, through instruments such as social impact bonds. Through this vehicle, government pays not for legislatively mandated strategies, with their attendant red tape and uncertainty, but for results. The path to the goal is left to the service provider, which shoulders the details and the risks. The bonds guarantee long-term funding, a frequent stumbling block for nonprofits, while the risk is shared among government (which pays for the outcome), investors (who put up money to achieve the outcome) and providers (who deliver the outcome). Focusing on results opens social services to new providers, approaches, business models and investors.

See: Paying for outcomes

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