Critical Success Factors, Motivations, and Risks in Social Impact Bonds

Social impact bonds (SIBs) have emerged as one of the most innovative financial instruments designed to support the social service sector in the delivery of innovative social programs. Despite the growing interest of academics and practitioners in SIBs, the debate appears polarized around a series of recurrent aspects, and only a limited number of studies have sought to understand the risks and motivations related to similar initiatives. Using an exploratory approach based on a mixed-method grounded theory methodology, this study analyzed the results of 12 questionnaires that asked experts about their experiences and perceptions in SIB project development and implementation. The study identified and assessed three main groups of motivations, critical success factors, and risk factors by focusing on the private-sector SIB actors with the aim of understanding their motivations and their perceived main success drivers and risk factors. This work contributes to the knowledge on the conditions for attracting private sector actors and supporting policymakers in the development of new SIB models. The findings could facilitate the development of risk management practices for the purpose of stimulating the participation of private actors in SIB initiatives.