In recent years, social impact bonds (SIBs) have emerged as a novel financial instrument to address complex societal challenges. This chapter analyzes their role in mobilizing private capital for social and environmental initiatives, examining their mechanisms, benefits, risks, and implementation challenges. Financing social programs has long challenged governments, non-profits, and philanthropies. Traditional funding often lacks the flexibility and accountability needed to address complex problems. In response, SIBs have emerged as a promising alternative. SIBs mobilize private investors by aligning financial returns with social impact. Unlike traditional grants, SIBs involve investors who provide upfront capital to programs run by service providers. If predefined outcomes are achieved, investors receive returns (pay-for-success). This shifts some risk to the private sector and promotes cross-sector collaboration. SIBs support rigorous outcome measurement and data-driven evaluation but face challenges in designing metrics, measuring impact, and ensuring evaluation integrity. Coordination issues and measurement difficulties can limit project scope and distract NGOs. The complexity of social issues also complicates causal attribution.