This bill, known as the “New Jersey Social Impact Bond Act,” directs the New Jersey Economic Development Authority (EDA), in cooperation with the Department of Human Services (DHS) and the State Treasurer, to administer a five-year social impact bond pilot program and study commission.
Social impact bonds raise funds from non-government investors to pay for the provision of a service, and if the service improves financial and social outcomes, thereby alleviating financial support from the State, investors receive success payments from the State.
Investors will contract with the EDA to purchase social impact bonds, the proceeds from which will be dispersed to a nonprofit organization service provider. The nonprofit organization will deliver services to the target population.
If the results of the services provided by the nonprofit organization meet pre-determined, defined financial and social outcomes, the EDA will repay the bonds with financial returns to the private investors.
Could Social impact bonds be a potential source of funding for expanding the Housing First model in New Jersey?