Two particularly interesting articles today, one on Rhode Island and another on the wide issue of recidivism and indeed broad data versus mere PFDS programme data – the danger of garbage in garbage out could be an issue for evaluating the relative merits of SIBs going forward…
Social Impact Bonds Legislation Advances In Senate Despite Strong Union Opposition
Katherine Gregg & Jennifer Bogdan – Providence Journal
Despite strong opposition from the largest state employees union, a Senate committee has advanced legislation that would pave the way for Rhode Island’s first $25-million experiment in “social impact bonds.’’
Supporters hope the bonds can provide a way of financing social programs for the homeless and incarcerated that the state otherwise could not afford. Opponents worry that it is a risky, untested funding model that could be used as a back-door approach to privatizing social programs.
“We just see this could be a back-door way to privatize the delivery of social services programs … and to most likely reward wealthy investors while you’re at it,” said Jim Cenerini, a lobbyist for Council 94, American Federation of State, County and Municipal Employees.
Eight States Reduce Recidivism Without Social Impact Bonds
Rick Cohen – NPQ
It is remarkable how many of the social impact bonds or pay-for-success projects planned or enacted here and in the UK address efforts to reduce prison recidivism. The wrong conclusion to reach from these projects, hopefully not intended by the SIB/PFS promoters, is that private investors such as Goldman Sachs are discovering evidence-based but relatively unrecognized programs to reduce prison recidivism, and that if not for the private investment, this arena of activity might not be getting the governmental attention it is receiving as a result of the SIB phenomenon.
It may be true that the typical governmental approach is more of the same, simply warehousing people in prison and hoping that the blowback from people unavoidably returning to prison after their release into the community won’t be too horrendous—or costly. However, the Council of State Governments just released a report this week that documents the very promising efforts of eight states—Colorado, Connecticut, Georgia, North Carolina, Pennsylvania, Rhode Island, South Carolina, and Wisconsin—that have actually achieved reductions in recidivism between 2007 and 2010. The report on these eight states follows an earlier CSG report that documented the reductions in recidivism achieved by seven other states between 2005 and 2007.
The distinction between these eight states and the two states that are pursuing recidivism-reduction programs with the help of SIBs (New York and Massachusetts) is that the CSG is documenting system-wide, statewide reductions in recidivism as opposed to project- (or prison-) specific efforts. According to the June 2014 report, “compelling evidence is now emerging that shows that recidivism rates for an entire state can indeed change.”
Four Steps To Social-Impact Investing (subscription)
Christina Alfonso – Wall Street Journal
There are many different kinds of social-impact investments, but how do people choose the ones that will work best for them? Our firm has broken it down into a four-step process.
Ms. Alfonso is the founder and CEO of Madeira Global in New York.