The momentum is growing in SIB world and our optimism is considerable. More on Rahm Emanuel’s Chicago initiatives and other exciting developments, happy reading…
City Council Approves Emanuel’s Early Childhood Expansion
Fran Spielman – Politics
Mayor Rahm Emanuel’s plan to use $17 million from private investors to provide half-day early childhood education for 2,618 students sailed through the City Council Wednesday, despite concern about the “very high rate of return” for investors.
The Chicago Teachers Union and Service Employees International Union (SEIU) Healthcare Illinois and its City Council allies have likened the arrangement to the much-vilified parking meter deal.
That’s because the so-called “social impact bonds” will actually come in the form of a $17 million 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.
The annual interest rate of 6.3 percent will allow lenders to more than double their $17 million investment over an 18-year period.
But, they will be repaid only if students realize “positive academic results.”
Pay-For-Success Plan Brings Roca To Roxbury
Sandra Larson – Bay State Banner
A Chelsea-based anti-violence program that works to re-engage young men who have been in the juvenile or adult justice system and move them toward education and employment has opened a new site in Boston.
Roca, founded in 1988, describes itself as an “outcomes-driven” organization with a mission to move disengaged young people out of violence, poverty and incarceration and into a positive life trajectory. Spanish for “rock,” Roca targets the 17-24 year-old men who are most at risk for re-incarceration or violence and pursues them doggedly to bring them into a four-year cognitive-behavioral program.
“Our model is built off people who don’t want to deal with us at the start,” said John Ward, senior associate for development and policy at Roca. “We have to go after them over and over and over. We follow them around until they trust us.”
The program begins with outreach on the streets by youth workers and the slow process of forging relationships. These early stages may involve aiding the young men in small and practical ways such as providing needed clothing and supplies, as most are unemployed with few supports, and some homeless. The middle stage includes pre-vocational and life skills training, GED and ESL training, and transitional employment along with intensive support to help change behaviors. With expected failures, starts and stops and relapses, participants move toward sustained, non-subsidized employment.
In all, the program includes two years of intensive programming and two years of follow-up to reinforce and sustain the behavioral and life changes.
Besides its Boston site, which opened last month on Albany Street near the South Bay House of Correction, Roca has Boston-area sites in Chelsea, Revere, Everett and East Boston, and one in Springfield, Mass.
What Do We Really Know About Social Impact Bonds?
Mowat Centre
Mowat NFP recently released a report, From Investment to Impact: The NFP experience with Social Impact Bonds as part of its Sector Signal series. Social Impact Bonds (SIBs) are a relatively new idea, and they are generating both a high level of excitement and anxiety.
Advocates of social finance and impact investing see them as a way to create new pools of money to fund important social programs. They are seen as a way to drive innovation and shift funding toward preventive programs that address root causes of social problems rather than crisis-driven interventions.
Skeptics view social impact bonds as a euphemism for privatization—another potential tool for cash-strapped governments to offload social program spending to the private sector or to not-for-profits without sufficient resources.