Push for success, a lovely play on the PFS mnemonic as we look from Chicago across the great plains of the USA to Colorado with two interesting articles in SIB News…
Emanuel’s Early Childhood Plan Compared To Parking Meter Deal
Fran Spielman – Politics
Mayor Rahm Emanuel’s plan to use a pay-for-performance financing method known as “Social Impact Bonds” to give 2,618 children access to early childhood education cleared a key legislative hurdle Monday despite comparisons to the widely-despised parking meter deal.
The Chicago Teachers Union, SEIU Healthcare Illinois and their City Council allies condemned the arrangement because it will allow Goldman Sachs, Northern Trust and the Pritzker Family Foundation to more than double their $17 million investment over 18 years.
The bond program advanced Monday by the City Council’s Finance Committee is in the form of a loan from the Goldman Sachs Social Impact Fund and Northern Trust as senior lenders. Subordinate lenders are the J.B. and M.K. Pritzker Family Foundation.
Viewpoint: Why Using Social Impact Bonds To Push For Success Is A Good Idea
Michael Bennet – Denver Business Journal
Like many Colorado families over the past several years, governments at all levels have had to tighten their belts to make ends meet. While Congress has failed to develop a comprehensive and forward-looking plan to address its deficits, some state and local governments are looking for innovative ways to balance their budgets and having important conversations about government investment.
As Ben Franklin once said, “an ounce of prevention is worth a pound of cure,” yet government consistently underinvests in prevention services and instead foots the bill for costly remedial services. And too often there’s no process to evaluate the effectiveness of any of these services.
In the end, taxpayers often have no idea whether they are paying for a winner or a dud, which programs deliver results, or whether service providers use resources wisely.
There’s a new approach catching on across the country. From Massachusetts to South Carolina to Oregon and even right here in Colorado, government entities are beginning to use social impact bonds to help increase accountability, save taxpayer dollars, and engage creatively with the private sector to find innovative ways to provide more effective services.