The Rikers Island programme, in failure may yet be a useful totem for the SIB movement insofar as the demonstration of risk ought to be a useful pointer to batter the notion that services are being provided to enrich investors. Meanwhile down under Emma Tomkinson discusses metric changes in mid-programme…
We intend to publish Monday (presuming there is some news!) as it’s not a holiday in Europe but we wish a safe and Happy Holiday weekend to all our US readers.
No Success Like Failure: N.Y. Sees Social Impact Bond Pluses
Paul Burton – Bond Buyer
A New York City program aimed at cutting recidivism rates among Rikers Island adolescent prison inmates failed to meet its desired goal.
As a result, the city paid nothing for it.
That made the nation’s first social impact bond a success, according to city officials and others involved with the program. Under the pay-for-performance vehicle – bond is a misnomer in the traditional muni bond sense, though supporters find the buzzword catchy – the city is not on the hook.
The program, which began in 2012, was originally pegged for four years but reduced after a predetermined three-year checkpoint. Its structure enabled city officials to experiment without risk to taxpayers, according to First Deputy Mayor Tony Shorris.
“This social impact bond allowed the city to test a notion that did not prove successful within the climate we inherited on Rikers,” he said. “We will continue to use innovative tools, both on Rikers and elsewhere.”
What We Learned From The Nation’s First Social Impact Bond
James Anderson & Andrea Phillips – The Huffington Post
Nearly half of the youth released each year from Rikers Island, New York City’s largest jail, return within 12 months. That’s an unacceptably high number and one we aimed to dramatically lower when we started a robust new program for youth in the jail back in 2012. As we learned recently, the program, an evidence-based cognitive behavioral therapy that’s been effective in reducing recidivism in many other correctional settings, did not work at Rikers Island. As a result, the program will be discontinued.
Still, we’re encouraged that the innovative public-private partnership that allowed all of us to try to help these young people in need and do something new — called a social impact bond — worked. That may sound counterintuitive. It’s not.
To understand why social impact bonds are impactful, and why they worked here, we need to consider how they are structured and what they are supposed to do.
Changing A SIB Metric Mid-Flight
Emma Tomkinson
Social impact bonds are new, so involve a lot of learning on the job. This learning is less that one SIB ‘works’ and another SIB does not, but more about the iterative adjustments that allow for more effective services, more flexible procurement processes, more alignment of incentives in contracts. One aspect of SIBs that is new for many jurisdictions is long-term contracts. Long-term contracts have many benefits to those delivering and receiving services, but in order to respond to information that comes to light over this time, they must also allow for adjustment and termination.
As its second year draws to a close, investors in Australia’s first social impact bond, the Newpin Social Benefit Bond, have been asked to approve an amendment to its payment metrics, so that they more faithfully reflect success for the children and families it serves.
The reason for this is that the metric rewards investors when children in foster care are restored to their families by the court (“restorations”). When developing the metrics, the breakdown of restorations where children would return to foster care (“reversals”) was discussed, but failed to be written into the contracts. The intention of the metrics is to reward social outcomes with financial return, which means that while restorations should result in payments, reversals should not.