CHICAGO — Illinois Gov. Pat Quinn announced plans Tuesday to launch a social impact bond program, an alternative financing mechanism that taps private investment to fund social services goals.

Social impact bonds may use the term "bond" in its name, but their features more closely resemble a structured product with a twist. Projects in New York City, Fresno, Calif., and Massachusetts are in various stages of using the model, which enables the public sector to leverage upfront funding from investors under a so-called "pay for success contract."

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