Social Impact Bonds: The Next Phase of Third Sector Marketization?

The politics of austerity have pushed the third sector to the centre of attention as governments turn to nongovernmental institutions to pick up the social deficits created by economic recession. Some governments have begun supporting alternative service funding through such innovations as social impact bonds (SIBs), a financial product used to encourage the upfront investment of project-oriented service delivery. This article provides an understanding of what SIBs are and traces their emergence within Canada while linking them to their cross-national origins. SIBs are situated conceptually within broader contemporary developments within the nonprofit sector, particularly the agenda of public sector reform and third sector marketization. This analysis focuses on the potential impact of SIBs on nonprofit policy voice and their capacity to represent and meet diverse community needs.