Social-impact bonds (SIBs), or pay for success financing, are innovative financial arrangements
that could provide a cutting-edge way to fund experimentation and expanded opportunities in
SIBs are entirely contingent on the performance of the service provider and promise returns to
private investors only if performance objectives are met. They were first pioneered in England
in 2010. Today they are being used to achieve goals such as decreasing homelessness in
England and reducing recidivism at Rikers Island prison in New York. There is growing
interest in SIBs: According to The Economist, when Harvard University professor Jeffrey
Liebman, who assisted in the set-up of several American SIBs, invited other states and local
governments to apply for his help setting up their own, he received 28 applications.
Social-impact bonds have many designs, but have at least three fundamental, common
• A definable, verifiable outcome to be achieved by the social service provider, the
recipient of the funds;
• An initiating party, such as a government agency, that issues the bonds and is
responsible for making payments to the organization and investors; and
• Authority and discretion is granted to the service provider in how it goes about achieving
the desired goal.
So how might this unique funding model benefit education? Consider the hypothetical case of an
independent, education-focused organization—perhaps a foundation—that wants to help launch
more “early college” high schools in a state. That organization would work
Data – no, not the character from the hit television series Star Trek -- travels an amazing and mainly unknown journey through galaxies of complex IT systems that only perhaps Stephen Hawking can fully articulate.
As the newest member of the Thomas B. Fordham Foundation’s sponsorship team in Dayton, Ohio, I have been inundated recently with compliance issues and database systems. The database systems are intended to support timely and voluminous data-gathering and reporting between schools and the Ohio Department of Education (ODE), and to make that data accessible to the public and researchers. My most recent assimilation did not involve the Borg, but instead involved ODE’s Education Management Information System, or EMIS.
EMIS, established in 1989, is expansive to say the least. It is ODE’s main data collection source for primary and secondary education, including demographic, attendance, course information, financial data, and test results. EMIS’ collected data falls into four general categories: district level, student, staff, and financial data. A community school must timely enter and maintain all of this data into their computer, in goal of sharing it with ODE. In practice, however, this is not as simple as a school merely downloading its data directly into an ODE portal each month and calling it a victory.
All states have similar data systems nowadays, but Ohio’s is deficient among its peers in some regards. First, as Auditor Yost has highlighted, Ohio law prevents the state from having personally identifiable student data.
Mathematica Policy Research last week released a major research report showing that students attending KIPP middle schools make substantial additional academic growth relative to peer students who attend other public schools.
Nationwide, the KIPP network of charters consists of 125 schools in 20 states and the District of Columbia; of those, this report focused on 43 middle schools serving students in grades five through eight. The student population that participated in the study was 96 percent black or Hispanic; 83 percent qualify for free or reduced-priced lunch.
Mathematica found that after three years, KIPP schools produced an additional eleven months of learning growth in math and eight months in reading. The report also dispels the myth that KIPP schools’ positive effects on learning are a function of “teaching to the test”. Mathematica examined test results from both state assessments and from the nationally norm-referenced test (Terra Nova), for which teachers and students do not prepare, and found consistently positive results for both exams.
Ohio currently has one KIPP school, KIPP: Journey Academy, which serves grades five through eight in Columbus, and is sponsored by Fordham. While Mathematica did not include KIPP: Journey in its study, we do know that state-reported data indicate that KIPP: Journey is effectively educating students. It was rated “Effective” (B) by the Ohio Department of Education in 2012 and had an “Above” rating along the value-added performance indicator. This, while serving 300 students, of which 91
Yesterday was the first day of public testimony on Governor Kasich’s budget proposal before the Ohio House Finance Primary and Secondary Education Committee. Terry submitted testimony on behalf of the Fordham Institute, as did Students First and others. Following is a good recap from Gongwer News Service:
Terry Ryan, vice-president for the Thomas B. Fordham Institute, offered support for the budget, saying the funding offered through the formula would outpace that of almost every other comparable state in FY 14. He also offered suggestions for use in the budget or as the subjects of future legislation.
Firstly, he said all dollars should follow students to the schools they actually attend, but funding is still stuck in categorical programs and flows to the district but not necessarily the building attended.
Mr. Ryan also called for annual academic return on investment reporting for all public schools, both districts and charters. "Just as some districts are more productive than others so are some schools and these should be acknowledged and better understood," he said.
More mandates related to regulations, laws and contract should be eliminated if they force funds to be spent in certain ways in all schools regardless of student characteristics. He said the flexibilities of the Cleveland Plan should be expanded to all districts.
Like the administration, Mr. Ryan said the state should move away from hold harmless provisions and guarantees "that provide funding