It is confusing to try to understand it, because the theory of how the social impact bond is going to work is that the risk lies with the person raising the money, like Goldman Sachs, for example. Because they are raising this money, they expect a return on their investment. They are behind it. It is seen as a new way to invest in the public sector, but as Andrew correctly points out, because these are getting off to a bit of a rocky start, it's actually the charitable organizations themselves that are guaranteeing them. They are the ones that are taking the risk for this.
The people who are creating the bond are making money, but the risk is lying either with the charitable organization or with the government, if indeed it fails. So far, the model looks like there is almost no risk to the financer, and all the risk lies with the people who are supposed to be getting the assistance, i.e., the charity or the government that wants the desired outcome. The other thing is the amount of money they are able to make, which is raising the cost of the public service. Instead of looking for ways they can make money.... A 12% return in this day and age is a very high return on investment for something that could have been done more cheaply by the not-for-profit or public sector.