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Social Impact Bond Flounders in Rikers Island Youth Project

by Derek Gilna

Social impact bonds (SIBs) are investment vehicles by which  charitable organizations or individuals can invest in a project to benefit a government agency. If the government agency reaches a pre-determined goal with it bond investment, the government reimburses the agency. The concept is designed to permit government to try special projects that it might not have the funding to attempt, with no financial risk to the agency itself.

However well-conceived such a project might be, however, the government agency has to be capable of implementing the concept, and in the case of a Rikers Island youth offender mentoring program, which concluded in 2015, that was too much to ask.

Goldman Sachs and Bloomberg Philanthropies invested $7.2 million to a program at the New York prison to carry out the Adolescent Behavioral Learning Experience (ABLE) intervention, a cognitive behavioral therapy program. Right from the beginning, there were problems.

First, according to the New York Times, "the control group fell apart. Wardens...could not separate teenagers who were to participate ..from those who were not supposed to attend. Then the city's education department, which had offered to put teachers on Rikers to assist...pulled out." Personnel who were scheduled to work with youth after the release to continue monitoring them were instead moved to the prison to cover staff shortages.

Nonetheless, despite the fact that the program did not meet the quantitative measures of success, some observers claim that it was. James Anderson, director of government innovation programs at Bloomberg Philanthropies, noted, "so often in government you don't have that level of clarity that comes from the rigorous evaluation that you had here. That leaves the government thinking a program was successful when young men's lives were not actually improved." With programs like this one, that uncertainly was eliminated.

The government had agreed to pay back the investors if the program reduced youth recidivism by 10%, and it was impossible to prove that the program had any impact. Other social impact projects are proceeding in the United States, and the model has had some success in the United Kingdom. Prison Legal News has covered SIBs previously. 

See:, www.payfor,


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