In N.Y.C., Private Sector To Invest In Social Issues
RENEE MONTAGNE, HOST:
Now to a bank that's aiming to do well by doing good. Goldman Sachs is investing $10 million in a New York City jails program, a sort of social service bond. The program is aimed at lowering recidivism among adolescent males at Rikers Island Correctional Facility. Like any investment, if it's successful, Goldman stands to profit.
Colby Hamilton of member station WNYC says the city is experimenting with new ways to fund social services.
COLBY HAMILTON, BYLINE: It's all made possible through a new investment tool that Deputy Mayor Linda Gibbs says takes taxpayers off the financial hook.
LINDA GIBBS: Essentially, the risk is borne on the private investor's side and the government pays only if the taxpayers actually achieve savings.
HAMILTON: Goldman Sachs' $9.6 million loan will fund a multi-year education and counseling initiative in Riker's Island prison. If the program keeps 10 percent from returning, Goldman Sachs gets all its money back. As the percentage of those staying out of prison increases, Goldman could earn more than $2 million on its initial investment. That's money the city's not spending on inmates.
Soffiyah Elijah of the Correctional Association of New York says, in a time of reduced government budgets, private investment - even for a profit - can be a boon.
SOFFIYAH ELIJAH: So the willingness of the private sector to get involved and help provide expanded counseling and educational opportunities for people who find their lives impacted by the criminal justice system is a good thing.
HAMILTON: If this initial program is successful, New York City officials hope to expand private investing initiatives to other high-need social issues.
For NPR News, I'm Colby Hamilton in New York. Transcript provided by NPR, Copyright NPR.