Social Impact Bond to Support Early Childhood Education in Chicago
On October 7, 2014, Chicago Mayor Rahm Emanuel, Chicago Public Schools and Goldman Sachs announced the launch of a social impact bond financing that will fund pre-kindergarten education for 2,620 Chicago public school children during the next four years.
The $16.9 million social impact bond supports the expansion of the Child-Parent Center model, which serves low-income families living in communities with a shortage of publicly funded, high-quality pre-K education.
Research has shown that access to quality early educational programs directly impacts the success of students in elementary school and beyond. The Child-Parent Center model will work to increase kindergarten readiness, improve literacy and reduce the need for special education services. The bond is structured to ensure that its lenders are only repaid if students realize positive academic results.
This is Goldman Sachs’ fourth social impact bond, and second to directly address early childhood education. The Goldman Sachs Social Impact Fund and The Northern Trust are acting as senior lenders with the JB and MK Pritzker Family Foundation as subordinate lender for the program.