Development Impact Bonds (“DIB”)

Development Impact Bonds (“DIB”)

DIBs are similar to Social Impact Bonds, but instead of a local government paying for achieved results, an aid organization or philanthropic foundation usually does so. Development impact bonds are also only used for projects in low- and middle-income countries. Social impact bonds, on the other hand, are used to pay for social programs in high-income countries.

As an example, impact investors might agree to give money up front to an eye hospital in Africa that will use the money to do a certain number of cataract surgeries on low-income patients within a certain amount of time.

Then, the charity agrees to pay back the investors’ principal and a set rate of interest if, and only if, the eye hospital is able to perform this number of successful surgeries in this amount of time. In this way, the philanthropic organization only pays for the specific development outcomes (the cataract surgeries) that have been achieved, and the risk of not reaching this goal is taken on by the private impact investors, who get a financial return above and beyond the cost of the surgeries (in addition to the “social” return on the financed intervention) in exchange for taking this performance risk.

Impact Washing

Also sometimes referred to as “Green Washing,” Impact washing is when the social and/or environmental benefits or “impacts” of an inves...

Nationally Determined Contributions (NDCs)

Nationally Determined Contributions (NDCs) are commitments made by countries to reduce their emissions of greenhouse gases (GHGs) and limit the amo...

Social Impact Bonds (“SIB”)

Social-impact bonds, which are also called “pay-for-success contracts,” are not really bonds or fixed income securities in the traditio...

Related Insights

With banks retreating from commodities and inventory financing due to market volatility and higher interest rates, hedge funds and other non-bank financial institutions have stepped in to fill the funding gap.
This is my 15th year of growing my MOustache (aka “MO) with MOvember. I grow my MO to honor my father-in-law, who passed away from prostate cancer + to raise awareness and funds + to literally and figuratively change the face of men’s health. Movember is a fun approach to serious issues (testicular cancer for younger men + prostate cancer for older men + mental health for all of us), so I hope when you see our MOs that you will check yourself + remember to schedule your annual physicals + reach out if you need a friend.   #movember #menshealth #SouthBayMoBros