PLY: Great news from Illinois, a cause for concern in Utah, insofar as questions emerge about benchmarks and achievements. Given the New York Times’ unrelenting love for big (and bigger) government, this could be a canard BUT the SIB movement must be above board and clear at all times on the delivery of results and their calculation. There will always be those who throw stones. Moreover, as mentioned before, the Goldman Sachs investment in SIBs is at once good, but also a lightning rod for dissent amongst those who simply have a knee jerk reaction against anything in the financial universe.
All input welcome on the figures as I am a tad maxxed out to do the math myself today but we need to think through how to make sure SIBs are not called into question as a result of any nefarious practices in the calculation of results, hurdles and achievements.
Pilot Project Lets Investors Fund Illinois Social Services
Associated Press
The state of Illinois is launching a pilot project of a public-private partnership that would have investors pay for services to people in need in exchange for a potential return on investment.
The project set to launch Tuesday gives investors the opportunity to cover upfront costs of services and be reimbursed with a profit if the program meets objectives to improve outcomes and save the state money. Former Democratic Gov. Pat Quinn first commissioned the project, and it has the support by his successor, Republican Gov. Bruce Rauner.
Illinois To Launch Public-Private Experiment To Fund Human Services
Bonnie Miller Rubin & Kim Geiger – Chicago Tribune
Illinois’ troubled child welfare system could soon become an investment opportunity for charities, banks and wealthy citizens under a public-private partnership experiment set to launch Tuesday.
The project, first commissioned by former Democratic Gov. Pat Quinn and embraced by his Republican successor, Gov. Bruce Rauner, aims to remake the way the state delivers services to people in need.
Success Metrics Questioned in School Program Funded by Goldman
Nathaniel Popper – NY Times
It was, in the vernacular of corporate America, a win-win: a bond that paid for preschool for underprivileged children in Utah while also making money for investors.
Goldman Sachs announced last month that its investment in a Utah preschool program had helped 109 “at-risk” kindergartners avoid special education. The investment also resulted in a $260,000 payout for the Wall Street firm, the first of many payments that is expected from the investment.
Gov. Gary R. Herbert of Utah hailed the program as a model for a new way of financing public projects. Such so-called social impact bonds are a new kind of public-private partnership, promising financing from Wall Street and imposing a goal on local governments.
Yet since the Utah results were disclosed, questions have emerged about whether the program achieved the success that was claimed. Nine early-education experts who reviewed the program for The New York Times quickly identified a number of irregularities in how the program’s success was measured, which seem to have led Goldman and the state to significantly overstate the effect that the investment had achieved in helping young children avoid special education.