Research has shown that effective early childhood programs can have dramatic impacts on the lives of high-needs children. Now, innovative financing mechanisms are harnessing the power of investments in early childhood, providing new funding sources to improve outcomes for kids, while at the same time providing returns to savvy investors.
These mechanisms, known as Pay-For-Success (PFS) programs, involve an investor pool—such as banks or foundations—which puts up money to fund a particular public program. In the years after participants complete the program, various entities such as public school districts or criminal justice agencies realize cost savings through improved results, and a portion of the savings are returned to investors based on achievement of specific goals. For example, investors might fund a high-quality preschool program. As public school systems realize cost savings due to improved outcomes—such as reduced special education or grade retention rates—a portion is passed on to the original investors.
[For more of this story, written by Andrew Brodsky, go to http://www.whatworksforamerica...ldhood/#.VH3oRfnF_qV]
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