This chapter discusses social and development impact bonds. Impact bonds are innovative financing instruments designed to fund social and developmental programs using private capital instead of government funding. Two common impact bonds are social impact bonds (SIBs) and development impact bonds (DIBs). These bonds closely align with the United Nations Sustainable Development Goals by focusing on funding initiatives in social services, environmental projects, education, and poverty reduction. Notably, specific, measurable outcomes are tied to the bond’s payout. SIBs are becoming more popular as investors and municipalities seek alternative debt structuring. Impact bonds have been implemented in over 30 countries worldwide, reflecting their adaptability to diverse socio-economic demands. These bonds are common in the United States, the United Kingdom, and several other developed countries. Still, they are also gaining traction in developing economies. Impact bonds initially focused on education and social services but increasingly represent a broader range of sectors, including healthcare, environmental sustainability, and infrastructure development.