Two interesting stories, you have enough of my input on other days, so I will leave the articles to speak for themselves…happy reading:
The New Philanthropy Targets Preschoolers For SIBs
About 600 three and four-year-olds are attending preschool in Salt Lake County and Park City, Utah, this year thanks to an innovative financing model that is catching the attention of government officials and lawmakers across the country.
Under results-based financing, also known as pay-for-success or social impact bonds (SIBs), private investors or philanthropists provide the initial funding for social programs that are expected to save taxpayer dollars down the road. If the policy goals are met and the savings materialise (according to third-party evaluators), the investors receive their money back with interest. However, the government doesn’t have to pay out more than it saves.
In Utah, the investors are Goldman Sachs and Chicago philanthropist JB Pritzker. They are putting up a combined $7 million for at-risk children to attend high-quality preschool. Researchers expect that attending preschool will make the children far less likely to require expensive special education services, which in Utah cost about $2600 per year. The students will be tracked through the sixth grade.
“The taxpayers are the ultimate beneficiary,” said Janis Dubno, early childhood and education senior policy analyst at Voices for Utah Children, which co-developed the financing model and provided the research and analytic support to the program.
“It’s a great way to shift funds from remediation to prevention.”
Among the critics of the Utah legislation were those who believe young children should learn at home, rather than at preschool. Britain pioneered the idea of social impact bonds in September 2010, with a program that aims to reduce recidivism by providing prisoners and their families with intensive support to integrate back into their communities. Initial results have been promising.
Since then, some US cities and states outside of Utah have begun using the model: in 2012, New York City announced the first social impact bond in the US. Goldman Sachs invested about $10 million to finance a program that provides education, job training and counselling for teenage inmates to help them avoid a return to prison.
Colorado-based Early Learning Ventures (ELV) will join advocacy groups, governmental agencies, education coalitions and non-profits from across the nation for an event designed to explore and develop innovative alternative financing mechanisms to fund early childhood programs.
The ReadyNation Conference of the Early Childhood Social Impact Performance Advisors will take place March 27-28 in Charlotte, NC, and is designed to assist public sector finance, private investment, legal professionals, and representatives from philanthropy, policy, and service providers in developing “Pay for Success (PFS)” contracts or “Social Impact Bonds (SIBs)”.
“This important gathering seeks to elevate cutting-edge approaches to funding for early childhood support initiatives,” said Sue Renner, Executive Director of Early Learning Ventures. “We are looking forward to bringing our venture philanthropy perspective to this national conversation.” Sue will be joined by Tyler Jaeckel from the Colorado Governor’s Office.