Budget constraints and difficulty raising taxes limit school districts from expanding education programming, even when research shows that additional expenditures would generate economic benefits that are greater than costs. Recently, coalitions of private investors, philanthropists, education practitioners, and government finance analysts have emerged to create opportunities to expand education services that promise high rates of social net benefits without raising taxes or reducing other expenditures. These collaborators have a strong interest in obtaining careful estimates of educational program effectiveness. We describe the use of social-impact borrowing to increase access to the Child-Parent Center preschool-to-third grade intervention for at-risk students in the Chicago Public School District. The partners include the city, school district, investors, nonprofit organizations, and a university. The key to the feasibility of social-impact borrowing is the ability to document that early intervention can reduce the need for later special-education services. With the help of private investors and nonprofit organizations, it is possible for public school districts to finance services with funds from private sources and use future cost savings to repay this debt. We discuss how social-impact borrowing is being used in Chicago and in Salt Lake County as the nation’s first 2 instances of using pay-for-performance social-impact borrowing to support early education.
Bibliographical noteFunding Information:
Preparation of this article was supported by grants from the National Institute of Child Health and Human Development (No. R01HD034294) and the Investing in Innovation Fund from the U.S. Department of Education (No. U411B110098).
Originally developed in 1966 in the Chicago Public Schools by CPS District 8 Superintendent Lorraine Sullivan, the CPC program was refined and expanded in the fall of 2012 by the Human Capital Research Collaborative at the University of Minnesota under an Investing in Innovation (i3) Grant from the US Department of Education. In collaboration with the Chicago school district, the number of CPCs was increased from 10 to 16 sites in 2012–2013 with an increased enrollment in prekindergarten from 923 in 2011–2012 to 1,655 in 2012–2013. In 2013–2014, 1,900 prekindergarten students were enrolled and over 1,200 CPC kindergarten students were being served for the first time in many years, including continuing students and those new in this year. Additional CPC programs were created in 2012 in Saint Paul, Minnesota, and in Evanston and Bloomington-Normal in Illinois, and more are in the planning stages in other Midwestern cities including Rochester, MN and Madison, WI.