Journal Article

Human Capital Performance Bonds

Abstract: The concept of the ?new normal? has infiltrated the thinking of policymakers, employers, and service providers. Brought about by demographic and technological changes, the new normal demands change: business as usual will no longer work. Social impact investing provides an answer to the question: How can we identify and fund those human services that improve the health of our communities over the long run and pay for themselves? Like traditional investing, it recognizes that certain social interventions provide financial gains to investors. Unlike traditional investing, it also provides improved social and financial outcomes to clients and taxpayers. There are a variety of models of social impact investing, including variations on the social impact bond (SIB) and the human capital performance (HUCAP) bond. The HUCAP bond has two key design features that distinguish it from SIBs: (1) payment to social enterprises is based on their performance, and (2) it uses bond funds for capital.

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Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: Community Development Innovation Review

Publication Date: 2013

Issue: 01

Pages: 103-108