Welcome to Monday’s SIB news – with youth and education centre stage in Charlottesville:
Could Private Investors Help Fund Area Pre-K Classrooms?
Tim Shea – Charlottesville Tomorrow
Albemarle’s pre-K program for at-risk youth — has seen its waiting list grow to about 90 in the last two years. What’s more, schools and social services officials say many eligible families don’t bother applying because of the relatively small chance of being selected, and they estimate the true number of at-risk 4-year-olds in the county to be about 230.
While the Albemarle Board of Supervisors and School Board are evaluating their vision for early childhood education, and how to fund it, as part of the annual budget process, some local experts believe impact investment strategies — private investments often aimed at improving social or environmental outcomes while providing a return for investors — could help ease the financial burdens localities are facing in the current preschool landscape, which could then potentially help close the achievement gap.
About 2,000 miles west of Charlottesville, Tom Van Gorder, assistant superintendent of the Park City School District in Utah, said his locality and school division have experienced significant growth and demographic changes over the last 20 years, and those changes have resulted in some student groups falling behind others.
“Our population grew exponentially both in our county and in the school division, so programs for students speaking a second language had to be developed,” Van Gorder said. “As time went on, we had a very large achievement gap forming between our Caucasian students and our Latino students.”
To deal with the gap that the Park City and neighboring Granite school districts are facing, the two divisions are using some creative financing to increase preschool access as a means of improving student outcomes.
Social impact bonds — commonly referred to as “pay for success bonds” — are a type of financing in which private investors put up money and manage a public project. They are usually targeted at improving outcomes for at-risk populations, with the end goal of reducing government spending on those populations in the long term.
Under the model, there are no upfront costs to the taxpayers, and because the desired outcomes are performance-based, the return that investors receive is dependent upon how well the program works.
Funded by Goldman Sachs and J.B. Pritzker, and in partnership with the United Way of Salt Lake and the child advocacy organization Voices for Utah Children, the Granite and Park City school districts are now in the second year of a social impact bond called the Utah High Quality Preschool Program.
The program provides half-day preschool for 3- and 4-year-olds, and aims to serve more than 3,500 children in total. Project representatives argue that increased preschool access can reduce the number of students who will later require special-education services, and thus will save school divisions and governments money.
In Utah’s program, the United Way serves as the financial intermediary with the private funders and commits to repay those investors yearly should the desired outcomes be met. Voices for Utah Children provides research and analysis for the program, while the Granite School District trains the staff and provides professional development.