Former Obama White House staffer (back in the day when there was tangible ‘hope’) Rahm Emanuel brings ‘hope and change’ to Chicago from the Mayor’s office via Social Impact Bonds – enjoy a fascinating series of stories in today’s SIB News:
Emanuel To Issue Bond Money To Expand Pre-K
Hal Dardick & Juan Perez Jr. – Chicago Tribune
Mayor Rahm Emanuel’s administration plans to use an emerging form of financing, one that links payback to lenders on the success of the initiatives being funded, to expand early childhood education programs in Chicago.
The mayor’s office said Tuesday that it will use close to $17 million of what are known as “social impact bonds,” in addition to $4.5 million in state funds and about $10 million in capital improvement money from next year’s budget, to enroll more low-income children in pre-kindergarten over the next four years.
The social impact bond funding would cover the enrollment over four years of about 2,600 children into a half-day Child-Parent Center preschool program. Expected to launch in November, the program would enroll 374 students this year at six schools that now are dealing with a shortage of preschool seats.
In the second and third years, the program would expand to more schools with places for 782 children each year, and 680 students in the fourth year.
More students would be enrolled with the state and capital improvement funding starting next school year.
Pritzker-Led Group Sinks $16.9 Million Into Pre-K For Poor Chicago Kids
Paul Merrion – Crain’s Chicago Business
A group of private investors, led by Chicago billionaire J.B. Pritzker, will invest $16.9 million in an innovative financing scheme that allows Chicago to expand pre-kindergarten programs for more than 2,000 low-income children over the next four years.
If it works, in terms of reducing the future costs of special education and remedial programs, the investors aim to get their money back, plus interest, but at no cost to taxpayers. The financing technique is sometimes called a “social impact bond” or “pay for success” financing.
In this scenario, Chicago Public Schools will get about a third of the savings generated if the program succeeds, with the rest going to pay back investors.
Richmond Seeks Socially Conscious Investors In Plan To Flip Neglected Homes
Ann Notarangelo – CBS
Richmond hopes a one-of-a-kind plan will fix struggling neighborhoods. The program teams up with nonprofits, contractors and socially-conscious investors to buy and flip neglected homes.
There are about 1,000 so-called “zombie homes” in the city of Richmond. Usually, the homes are a mess and no one wants them, not the owner or the bank.
“This gives us an opportunity to get money from social impact bonds, to invest in a community to restore these houses and make them market ready,” said Richmond finance director James Goins.
Social impact bonds target socially conscious investors. Instead of expecting a 5 percent return, an investor might get half that.
Fulton Panel Unveils ‘Smart Justice’ Recommendations
Daily Report
A group of lawmakers, law enforcement officials, judges and other members of the legal community on Tuesday recommended that Fulton County implement four new initiatives to make its criminal justice system more efficient and effective.
The Smart Justice Advisory Council spent more than a year trying to bring more coordination and collaboration to the county’s often fragmented criminal justice system. Their proposals aimed to balance keeping dangerous criminals off the streets while ensuring that lawbreakers whose problems may stem from mental illness or substance abuse issues are provided treatment and support services.
The group also suggested an effort to seek “social impact bonds” that will allow private investors to fund social service programs and realize a return on those that are proven effective by third-party evaluators. The county pays back the money from savings due to falling recidivism. Goldman Sachs’ Urban Investment Group launched the first such program in the United States in 2012 with a $9.6 million loan to underwrite therapeutic services for teenagers at New York’s Rikers Island. They are also in use in Massachusetts, Eaves said.
In addition to pretrial or pre-arrest programs, the council’s proposal foresees using the bonds to fund job training, education, housing and treatment programs.