Results Released for Rikers Island Pay for Success Social Impact Bond
The New York City Adolescent Behavioral Learning Experience (ABLE) Project for Incarcerated Youth (the Rikers Island Pay for Success Social Impact Bond) did not meet initial targets for outcomes, and no outcomes-based payment will be made to investors at this time. When a full set of data is available, thoughtful analysis is needed to fully understand the particular factors that prevented success payouts in this case.
This Social Impact Bond was the first one in the US. As with other innovations, we do not expect all pilots to fully achieve desired results. But they help to blaze the path— governments, service providers, intermediaries, investors and other supporters will learn what works and doesn’t work from these pilots, and apply that knowledge to improve the lives of people in need.
The Rikers Island pilot produced data on the efficacy of the program intervention. Additionally, taxpayers did not pay for a program that appears not to have generated the desired outcomes set out at the pilot’s launch. That risk was borne by investors willing to put their capital at risk for the sake of demonstrating whether a social program achieved a societally beneficial result. These are both important and positive developments in social sector financing.
While early pilots encounter inevitable challenges, Pay for Success is one indicator of a broader reorientation of social spending around outcomes. We do not yet know all the ways in which outcomes-oriented service delivery models will be financed, and how broadly we can usefully apply the social impact bond model like the one in this project. We do know that financial innovation is not a silver bullet to solve intractable social challenges. But we continue to see great potential in building a new social compact between funders, service providers, philanthropists and investors around setting bold targets for the outcomes we want to achieve in our society and creating new ways to achieve them more effectively. Putting ever-constrained resources behind what works will have the greatest benefit to people and communities, which is our most important goal.
For more information:
- Vera Institute of Justice, "Impact Evaluation of the Adolescent Behavioral Learning Experience (ABLE) Program at Rikers Island," (7/2/2015)
- MDRC, "MDRC Statement on the Vera Institute’s Study of the Adolescent Behavioral Learning Experience (ABLE) Program at Rikers Island," (7/2/2015)
- Huffington Post, "What We Learned From the Nation's First Social Impact Bond," (7/2/2015)
- The Bond Buyer, "N.Y. City Officials: Social Impact Bond Big Plus," (7/2/2015)
- WNYC News, "Social Impact Bond Shows No Impact," (7/2/2015)
- Impact Alpha, "The Prison Reform #Fail That is Shaking the Social-Impact Bond Market," (7/6/2015)
- Urban Institute, "Putting evidence first: Learning from the Rikers Island social impact bond," (7/6/2015)
- Institute for Child Success, "What does NYC mean for the Pay for Success field?" (7/8/2015)
- Quartz, "Can capitalism keep people out of prisons?" (7/10/2015)
- New York Times, "Wall St. Money Meets Social Policy at Rikers Island," (7/28/2015)
- Reuters, "Wall Street not giving up on U.S. social impact bonds," (7/28/2015)
- Huffington Post, "An Important Social Experiment Failed: What Would Success Have Looked Like?" (7/30/2015)
- Nonprofit Quarterly, "What We Learned from the Failure of the Rikers Island Social Impact Bond" (8/7/2015)
- Project Syndicate, "America’s Incarcerated Economy," (9/2/2015)