Three interesting articles to end the week plus a video of Sir Ronald Cohen too… enjoy!
SIBs: A Creative, Enterprising Approach to Funding Government Programs
plante moran
On Tuesday, March 11, Anne White, who has been assigned to the Office of Strategic Policy in Governor Rick Snyder’s office, gave a presentation to the nonprofit sector on SIBs. Anne was the third speaker for the Plante Moran-sponsored Executive-to-Executive Leadership Development Series for Nonprofit Leaders. She is a Harvard Government Innovation Fellow at the Social Impact Bond Technical Assistance Lab (SIB Lab), which is currently assisting nine states, including Michigan, in the implementation of social impact bonds.
White calls SIBs, “a promising new approach to government financing.” This is because social impact bonds are creative ways of funding social services programs. Since the repayment part of the arrangement is based on meeting measurable, predetermined outcomes, White also refers to them as pay-for-success programs or “social innovation financing.”
“For an SIB to get started, the government typically determines what types of social services it wants to help or improve,” explained White. “This can be at the federal, state, or local level.” Then the government (or other overseeing body) enters into a “performance-based” contract with an intermediary. This intermediary would raise the necessary capital for the project from banks, foundations, philanthropists, etc. It would also manage the nonprofit organizations that are in charge of providing the agreed-upon service. When the project meets its targeted outcomes, the government repays the investors. The upside to taxpayers, according to White, is that when SIBs finance these projects, government funds can be freed up for other public services.
Prisoners Dilemma
Ry Rivard – Inside Higher Ed
New York Governor Andrew Cuomo has dropped a plan to provide public money for inmate higher education. Instead, his administration is looking to find donors to fund his plan.
The proposal, which the Democratic governor announced in February, withered in the face of opposition, particularly among Republicans in the state Senate. They argued that prisoners were going to be rewarded for their crimes with a free education while law-abiding students were being asked to take on more and more debt to pay for college.
In a press conference this week detailing the final budget deal, Cuomo said he lost out on public money because of the “appearance issue and symbolism.” It’s also an election year. The governor said he will now seek private money for prison education.
Innovative Finance Model Could Provide New Path For Early Childhood Services
Ann Schimke – Chalkbeat
It was the fall of 2010, and the finance task force of the Early Childhood Council of Boulder County had worked for the better part of the year to come up with the dollar amount needed to provide high-quality early childhood services to every child in the county.
But after the task force finally nailed down the number, they never released it publicly.
“The number was so big, they were afraid it would terrify the community,” said Bobbie Watson, executive director of the council.
With the recession hitting, the board knew better than to ask voters for a tax increase, much less one capable generating the many millions of dollars the task force anticipated was needed.
Fast forward to November 2013 and the ballot box defeat of the school finance measure Amendment 66, which would have made possible universal full-day kindergarten and thousands more preschool slots for at-risk children. With that funding opportunity gone, Watson and her board quickly decided to pursue an innovative financing model they’d begun to explore.
Called “Pay For Success,” or PFS, it had bubbled up in policy circles for a few years, but is largely untested.
The idea behind the model, which is also sometimes called “Social Impact Bonds” or “Results-Based Financing,” is that private investors—commercial banks or foundations–pay upfront for evidence-based programs, such as high-quality preschool.
Sir Ronald Cohen On Social Investment In The UK – Video
Adam Pillsbury – The Guardian
One of the sector’s leading lights provides an instructive and inspiring primer on social impact investment.