Figure 1.
The flow diagram shows the impact bond structure involving private investors, a project administrator, service providers, the public sector, service beneficiaries, and an independent evaluator. Private investors provide investment to the project administrator. The project administrator makes decisions on applicable services and working capital and directs resources to service providers. Service providers deliver services to service beneficiaries. Social impacts and cost savings flow from service delivery to the public sector. An independent evaluator evaluates service impact and reports to the project administrator. Payment by results flows from the public sector to service providers. Return on investment and profit flow from the project administrator back to private investors if the service produces impact.The impact bond structure
Source: Adapted from Tiikkainen et al. (2022)