The social sector’s hottest “impact investing” product — the social impact bond (SIB) — has generated a range of reactions, from excitement to angst. Indeed, SIB enthusiasts often promote an ideal, while critics rail at the prospect of private investors profiting from social ills. Yet in the simplest terms, a SIB uses private funds to pay for a social, educational, or health program, and the government repays investors (plus a return) only if the program achieves prespecified results. Not surprisingly, as early adopters gain real-world operating experience, reality is turning out to be more nuanced than either proponents or detractors have promised. In this report, Gordon Berlin, President of MDRC, uses the recently concluded Rikers Island SIB program to explain the nuances and challenges involved in the seemingly simple structure of a SIB, and how a SIB that fails to achieve its desired results can be a successful and very necessary learning opportunity in a sector looking to shift towards evidence-based programs.