MacArthur and Delaney Launch Social Investment Taskforce
Washington, D.C. – Congressman Tom MacArthur and Congressman John Delaney (D-MD) today announced the development of the bipartisan Congressional Social Investment Taskforce to raise awareness about social investment’s promise and promote policies that encourage the success of this sector.
Social Investing is a form of investing that uses private capital to address public social problems. With the collaboration of the financial industry, the philanthropic community, local nonprofits, and think tanks from across the political spectrum, many are getting involved in this rapidly expanding sector to tap into its enormous potential and create change.
One of the most promising examples of social investment is the Pay for Success model, in which the private sector partners with the government to finance effective social interventions. The government identifies a challenge that needs to be addressed, say improving early childhood education or reducing homelessness. The private sector then invests the capital to fund an intervention, and if—and only if—the program achieves agreed-upon measurable outcomes, the government makes outcome payments to the investors. Instead of simply creating more government programs, this saves taxpayer dollars by ensuring funds are only spent on successful programs.
Another promising type of social investing is called Impact Investing, in which investors direct their money towards endeavors that make both a financial return and achieve some measurable positive impact on society. For example, impact investors may invest in funds that provide capital to community-based startup businesses in impoverished areas, or in affordable housing construction.
“Social investment is an important tool with endless possibilities to solve social problems and save taxpayer dollars at the same time,” said Congressman MacArthur. “When the power of market forces and private capital are harnessed, problems are solved more efficiently, American taxpayers benefit, and local communities are uplifted. Thank you to Congressman Delaney for joining me in this endeavor – together we can raise awareness about the exciting future of social investing.”
“Americans on both sides of the aisle are hungry for new solutions to old problems and expect us to deliver policies based on results, not ideology. Investors are also looking for ways to have their money directed towards helping society,” said Congressman Delaney. “Impact investing and Pay for Success partnerships can help those in need, improve government services and reduce taxpayer costs by bringing innovation to the public sector. In an era of limited resources we should responsibly leverage private sector capital to serve the public good and the pay for success model ensures we only support partnerships that are truly beneficial. I commend Congressman MacArthur for his leadership in this area and look forward to working with him and the Social Investment Taskforce to continue to build support for this approach.”