In this video, Andrea Phillips of the Urban Investment Group at Goldman Sachs discusses the firm’s second social impact bond, which invests in early childhood education.
In August 2013, the Goldman Sachs Urban Investment Group (UIG) together with the United Way of Salt Lake and J.B. Pritzker formed a partnership to create the first ever Social Impact Bond designed to finance early childhood. Goldman Sachs and Pritzker jointly committed up to $7 million to finance The Utah High Quality Preschool Program, a high impact and targeted curriculum focused on increasing school readiness and academic performance among at-risk 3 and 4 year olds in Utah.
As a result of entering kindergarten better prepared, it is expected that fewer children will use special education and remedial services in kindergarten through 12th grade, which results in cost savings for school districts, the State of Utah and other government entities. The first $1 million investment in this program will enable approximately 600 children to attend pre-school in the fall of 2013.
The Utah High Quality Preschool Program has the potential to generate long-term savings for taxpayers and the results-based financing structure can become a replicable model for financing early childhood services nationally. The potential savings associated with the reduction in special education and remedial service usage are significant, and in each scenario exceed the potential payments to the lenders.
For more information:
FACT SHEET: The Utah High Quality Preschool Program