Rikers Island
by RR’s snap shop

Social Impact Bonds.  Remember that term!  I have been following evolution of this movement from England, to Australia, and now the United States.

Last Friday, the City of New York announced the very first social impact bonding project in the U.S.  The project will utilize private capital (about $10 million) from Goldman Sachs to reduce recidivism rates among young males incarcerated at Riker’s Island by 10 percent over 4 years.  If these outcomes are achieved, the City will repay Goldman its orignal investment (and then some, if the goals are exceeded). Read Friday’s NY Times article.

In an environment of dwindling state and federal funds for social services for the most vulnerable, social impact bonds or “pay-for-success” bonds are a necessary experiment.  They provide private capital upfront (taking pressure off governments and taxpayers) to address targeted social problems such as chronic homelessness, mental illness, juvenile justice and recidivism.

These test-case projects are already underway in Peterborough, England.  The State of Massachusetts is on the verge of launching two social impact bonding projects this summer.  Vermont needs to explore this avenue as well … I will be advocating in this regard in the coming weeks!