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February 15, 2011

Rockefeller Foundation to Provide $400,000 for ‘Social-Impact Bonds’

The Rockefeller Foundation is pouring $400,000 into an effort to establish “social-impact bonds” as a financing mechanism for social programs, says The Wall Street Journal.

The foundation will announce this week that it is giving the money to the Nonprofit Finance Fund for projects to bring the idea, which originated in Great Britain and is backed by President Obama, to the United States.

The bonds are designed as a mechanism to try out new programs in health care, prisoner rehabilitation, and other areas without incurring taxpayer expense until they are proved effective.

Private investors and philanthropies pay for the programs and can recoup their money, with bonuses, from the government if they succeed, as measured by previously set targets.