Goldman Sachs to fund $10 million city jail program
A man is brought to jail by a New York City Police Officer on July 10, 2012 in New York City.
Jeremy Hobson: The city of New York is announcing an unusual partnership with Goldman Sachs today. The bank will fund a $10 million city jail program designed to keep young men from re-offending. Goldman will only make a profit if it works.
Marketplace's Amy Scott has the story.
Amy Scott: The deal is known as a “social impact bond.” It’s the first of its kind in this country. Goldman Sachs will finance a program for teenage men serving time on Rikers Island, the city’s main jail. If the reincarceration rate falls by more than ten percent, Goldman will make a profit. If it doesn’t, the city pays nothing.
Jeffrey Liebman is a professor at Harvard’s Kennedy School of Government. He says this sort of collaboration shows promise.
Jeffrey Liebman: It offers a path to more rapid social innovation, because governments can take a risk in financing innovative new services without having to pay unless they work.
Liebman says a similar programs exists the U.K. Massachusetts is also working on contracts to fight recidivism and homelessness. It could take several years to learn how effective they are.
New York city says nearly half of teenagers who leave its correction department are back within a year.
I’m Amy Scott for Marketplace.