Paradigm shift in the public sectorPFS/SIB Focus areas
Overview of activities
PFS/SIB are new mechanisms that seek to transform public services to a more outcome-oriented approach.
From the standpoint of an organization that has led the way in the adoption of PFS/SIB in Japan, SIIF is not only involved in creating model projects but also aims to achieve a paradigm shift in the delivery of public help by sharing knowledge and submitting policy proposals.
What are PFS and SIB? PFS/SIB mechanisms
Pay-for-success (PFS)/Social impact bonds (SIB)
Pay-for-success contracts are agreements for outsourcing administrative services to the private sector under which the final payment of commission is linked to the success of the project. SIB is an abbreviation of Social Impact Bond, and refers to external provision of funds from the private sector accompanied by pay-for-success contracts with the private sector. As of 2019, 137 such SIBs had been established, primarily in the United Kingdom and the United States, representing a total investment of approximately ¥40.8 billion. A wide range of fields has been targeted, centered on areas where social problems need to be resolved, such as support for finding work, support for the destitute, and healthcare.
The first full-fledged projects were those created by the cities of Kobe and Hachioji in 2017. By 2019 around 20 PFS/SIB projects had been created, primarily by local government bodies nationwide, representing a total investment of approximately ¥900 million. SIIF was involved in the creation of three of these 20 projects, and in the provision of funds for eight.
Publish report on SIBs
In cooperation with Mitsubishi UFJ Research and Consulting, SIIF has made two reports on SIBs available online .
Five strategic themes for accomplishing our mission
- Three-dimensional investment structures experiencing global growth Impact investing
- “Impact investing” aims to generate simultaneous social and economic impacts alongside financial returns. The objective of SIIF is to create project models in Japan and to expand the market.
- Presenting new benchmarks for measuring value Social impact measurement/management
- Measurements designed to grasp the qualitative & quantitative social impact generated by projects and activities, and social impact management for the continuation of activities that utilize these measurements to enhance social impacts. We are working on the practice of both in Japan, as well as on knowledge development.
Paradigm shift in the public sector
PFS (pay-for-success) contracts
Social impact bonds (SIB)
- Contributes to building reform mechanisms for more results-oriented public services, such as by using contracts in which payments are proportional to successful social outcomes (PFS), and methods for sourcing funding from investors on such occasions (SIB).
- Paradigm shift in the public sector PFS (pay-for-success) contracts
- A new economy supported by the exchange of value other than money Alternatives
- We are working to build mechanisms and project models to express the value in social, natural, cultural, human, and emotional capital in a way that would be difficult using an economic capitalist approach.
- Intentional funding drives innovation Progressive philanthropy
- We will provide backing for philanthropic activities that generate sustainable social impacts, so as to enable the transformative effects of individual donations and charitable activities by private-sector foundations.