3Center for American Progress | Inside a Social Impact Bond Agreement
Draft language for inclusion in an agreement
1. Tis agreemen is made beween _______, he
2. Under his agreemen, he broad responsibiliies o he paries are as ollows:2.1. Te
is responsible or dening he oucomes ha i wisheso see accomplished.2.2. Te
is responsible or devising and implemening asraegy o accomplish he oucomes.2.3. Te
should no seek o direc he sraegy or operaions o he exernal organizaion, bu i mus cooperae wih he eors o he exer-nal organizaion o achieve he oucomes.2.4. Te
will pay he exernal organizaion i one or more o heoucomes are achieved.3. In addiion, his agreemen ses ou responsibiliies or he independen assessor andhe arbier:3.1. Te
is responsible or deermining wheher oucomeshave been achieved and he level o paymen ha is due.3.2. Te
is responsible or resolving dispues ha may arise beween hegovernmen agency and he exernal organizaion.
We believe that Social Impact Bonds are un-damentally an agreement between governmentand an external organization where paymentis promised in return or achieving one or moreoutcomes. Both parties must work together toachieve the outcome. We do not believe thatother parties such as investors should be a partyin the agreement.
This clause seeks to set out the broad responsi-bilities o the parties but omits details about howthe arrangement will work. Many o those detailsare included in later clauses.