A new week dawns and a SIB is born focussing on developing our next generation in Salt Lake city…
Paying For Success: On The Cutting Edge In Early Childhood Education
Eric Schulzke – Deseret News
When Salt Lake City’s Granite School District wanted to expand its successful early childhood education program it dialed up one of the world’s largest investment banks for a loan.
Goldman Sachs said yes, launching the first “social impact bond” aimed at early childhood education. The program will be administered by the United Way of Salt Lake, and the state will repay investors based on carefully measured costs of avoided special education expenses down the road.
If the results aren’t achieved, Goldman Sachs gets nothing back.
Social impact bonds, or as they are often called, “pay for success loans,” are a new concept of blending public purposes with private resources and approaches.
The idea is to set out a measurable and achievable social objective. Private investors fund the project, while an experienced nonprofit organization implements it. A third party measures the results, and if results meet or surpass expectations investors get paid.
The Salt Lake bond is the world’s first focused on early childhood education. The two previous bonds — in England and New York City — both focused on reducing prisoner re-offending.