2013 0619 Carey Hepler Fast Pitch - Social Impact Bonds
Social Impact Bonds are an innovative way to fund promising new programs at no cost to taxpayers. New York City will implement a cognitive behavioral therapy program for 16- to 18-year-olds detained at New York City’s Rikers Island with the goal of reducing the high recidivism rate for this population by focusing on personal responsibility education, training, and counseling. In a Social Impact Bond, private investors fund the intervention through a nonprofit contractor and the government pays the contractor only if the program meets its goals. In New York City, Goldman Sachs is providing financing, Bloomberg Philanthropies is providing grant support for the effort. The goal of this presentation is to gain interest in funding a bond for Jacksonville, Florida. The New York City Mayor’s Office and the Department of Correction (DOC) are designing the program and contracting with The Osborne Association and Friends of Island Academy, who are running the program, called Adolescent Behavioral Learning Experience. The Vera Institute of Justice will conduct an independent evaluation.
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2013 0619 Carey Hepler Fast Pitch - Social Impact Bonds
- 1. CAREY HEPLER FAST PITCH @ COWORK JAX JUNE 19, 2013 Social Impact Bonds
- 2. What Is a Social Impact Bond? A financial instrument - investors earn a return Invested funds are given to non-profit organizations with proven track records If the non-profit organizations’ efforts are successful, the government repays the capital invested plus interest
- 3. How It Works
- 4. An example: Reduce Recidivism at Rikers Island $9.6 MMGoldman Sachs Rockefeller Foundation 10% Reduction = Money Back >10%-20% = Principal + up to $2.1MM capped Vera Institute of Justice verifies results Two Non-Profits are implementing the program
- 5. Five Wins 1. Government solves social problems while saving taxpayer money 2. Social organization goes to scale 3. Government can redeploy existing capital 4. Investor receives innovative finance alternatives to address social problems 5. Community receives the benefits of the social impact
- 6. The Next Steps for Jacksonville Decide which problem to solve Crime? Public health? Homelessness? Early childhood education? Identify partners Government Finance Non-Profit organization Oversight and Administration
Editor's Notes
- 3,400 annual adolescent offenders50% recidivismMDRC is designing the program and contracting with The Osborne Association and Friends of Island Academy, who are running the program, called Adolescent Behavioral Learning Experience.The Vera Institute of Justice will conduct an independent evaluation.Bloomberg Foundation has 75% guarantee