New Opportunities for Milwaukee January 28, 2015 ‘Senator Alberta Darling & Representative Dale KooyengaTable of Contents Introduction: New Opportunities for Milaukee 3 (Chapter 1: Empowerment through Education 5 Replication of Charter Schools 6 “Turaround Schools. 4 Dsl Enrllment Program 7 ‘Chapter 220 Invadisrice Aid Flxbity 8 DPI Waiver of Mandates ° ‘Computer Programming Academy ° (Chapter 2: Foe Market Zones: Targeted Practices for Challenging Neighborhoods 10 oro Percent Corporate Tox 10 RightTo-Werk Zone " Repeal Minimum Mark Up Law " Chapter 3: Removing Barrons to Work 2 ‘Occupational Licensing 2 Allon Smal Busingsees to Operates Business Out of a Home 8 CChaptor 4: Socal Impact Bonds “ (Chapter 5: Benefit Corporation & L3C ” Endnotes 8 ‘Appendix I: American Survey Date (2008-12), 2 ‘Appendix I: Map of Targeted Zi Codes. 2 Appendix Il List of Social Impact Bande in Other State 23 ‘Appendix IV: Selected Quotes - 2 ToutIntroduction: New Opportunities for Milwaukee 2014 marked the 50-year anrversary of the war on poverty. Since 1964, taxpayers spent ver $22 tillon to ‘combat poverty! Lit, any, progress has been achieved. The wajactory int favorable towards the poor and lower mile clas ancl few would argue the federal government has made significant progress to win the war ‘on poverty. The same 50-year-oid programe ae infited wth addtional spending and new programs are consistently invoduced, but the efecveness ofthe eriginal programs ae arly eralusted. Present Dwight Eisenhower famously warned of the buildup ofa mitary industrial complex for good reazon- but few have foreseen a poverty industrial complex. There is a presumption inthis nation that all we have to dois appropriate more maney o address a problem. but ever ime we seen cavaltion between government ‘money spending end he alleviation of poverty Unfortunately, and ronal areas that have recswed the most Federal and atte funding in the form of welfare hove eroded sltive tothe areas that have receive loss tention fom government Two thirds ofthe incarcerated fican-American men came fam si2ip codes in Miwaukee anditie no coincidence that those zp codes ae also home tothe greatest density of fang schools and the highest Unemployment in the state? The policies we are advocating for seek to provide new tools to deal with a reality no ane should accept. From new and innovative educational modelo free market policies that wil allow for (greater economic gains, the residents of Mibvaukee County deserve better and mare opportunites, Thore is ahvaysa danger of oversimliyng a complicated problem, but theres also vale in breaking down 2 S0-year-old paradigm and questioning the approach fom fresh perspective. We know the current expensive, ‘overly complicated web of government programs are not working. The success stories predominately come. from invidual members ofthe community and notforprofite that are entranchad in thse communities thot are mare judicious withthe limited resources thay have The ideas put forth inthis report are about new opportunities. The natives inthis paper will not cost any taxpayer at any level of government, a single cant. The ideas represent unleashing indviduals, not unleashing {government spending. The poles introduced are based onthe bei that individuals want to work, as work par of our human DNA, Noone wants tobe in poverty and na one wants tobe dependent on the government Race, sex income, handiesp, age ot iteny of other characteris does not change our belie that we wet all cated equal and that everyone has the ably to cantibute something to our commun. Significant commentary has been given to the S0-yearwar on poverty In particular, Wisconsin's Congressman Peul Ryan introdueed legislation tht addreseed sir issues athe federal ave. Our approach here i silor ‘We believe inthe policies set foth inthis report and will work © enact these palcies because ve believe ty vill have 3 positive impact in our community. However, wo also want the ideas te spark = community-wide Conversation on poverty and inate honest conversations on the curant sate of Wisconsin's most impoverished communities, the real pan felt hare, and what we can do diferent ‘We are not under te ilusion that this agends or any government lad approach can single-handedly fica cornmunitys problems. Our interest ie not ony to break dovm paradigm and ty new approaches, but sso to continue conversations with the residents of Miwaukee'’s most impovershed neighborroods wha have our \temost attention. The agenda dooe not contin tha slverbule but anabloe other organizations ane individuals now flexibilities and vehiciesto explore nen approaches, inat2 esl baring lf ci, The ares of tc surounr downtown nh then i tha or nd fo wget tomes ew oe ng uae of cone oe preset od thos Banta we ng od conscng eves T's wero pata cya cone tree on end ar corm, Compas terelly of Miwaaee ‘ese ng oss reign rind ry ing nna vee The aghearooss re orl, eRe av anang he maghtrtoed andthe re tos muy talf sods The soca of ware on halt donatvn Minne ee orang ane coda Th ood aftomme'on rede rer Cayenne anther house as Denise ofa tnraictonIn 2014, we spent hundreds ofhours in Milwaukee’ inner city. We heard from the community and found ‘common ground. The policies set forth inthis package reflect the time spent, ouside our awn districts, where residonts fel lot down withthe current trajectory ofthe neighborhoods they love and sil below in ‘We believe the whole state can beneft rom these polices, but inthe interim, the policies are cirected to specific zip codes in Milwaukee that have unemployment rates exceeding ten percent pendix) The ttajactory in these neighoorhocds i appaiing end changing the stats quo in these neighborhoods is long ‘overdue. The time to actis now and we are arwous to damenstate that the principles we belive n can have 2 pomerul impact. tnedcinChapter 1: Empowerment through Education ‘The cul rights issue ofthe wont contury is education. Education ie one ofthe greatest catalysts nif, Education frees young minds ef ther present ality ond allows them to explore naw ideas, places, cultures and ‘values. A well-rounded education provides the foundation of dreams for many young students, Too many schools ae fang to0 mary students in Miwaukee. Progress has been made, but with a 605 percent fouryear high school gradation rat for 2012-13, educators and palimakers have not arrived ata dertnation.*inthe ast being minority in America inhibited an individual rom pursuing 2 promising career and a wel paying Job. Ths realty is an embarassing one for our great count, fortunately tremendaus progress has been made 6 tis injustice since the passage ofthe Ci Rights et of 1964, Today, a greater discriminator to escaping over is not race, but instead revolves around the ably to obtain sigh school diploma, The lack ofa ‘Guay K'12 educetion places o young person behind the eight-bell for ie. Accosding tothe state Department of Public Instruction (OP? the Milwaukee Public School District (MPS) has 47 schools that eam the dstinaion of "Fails to Moet Exoectatione” forte 2073-14 school year, Also in 2013, nly 60. percent of MPS seniors grecuated high school. It even worse for lrcan-Armerican students at 58.3 percent and Hispanic students at 844 pecan! The system needs to reform now High Schoo! Graduation Rates 100% ans nSeatewide sm Mutants QPS) 1 AbicawAmescon a 20 1% om Sere tp cad Dabar pao Fortunately, Mibvaukeo is innovative with ther ably tobe a laboratory for exparimentation with integration programs, open enrolment and the Miaukee choice program and charter schools. There have been "successes an falures, but overall the competition between schools and school sytem i @ postive fr the ‘community. However, administrators end poleymakers need 0 continue to reine the education model. The ideas st forth represent sigaiicant reforms that we believe will havea significant impact coneCharter School Replication The expansion of proven, effective charter schools is essential in providing more quality education ‘oppontuntis for the chien in Miinaukes. According to DP, fr the 2013-14 school yoars thre were 242 charter schools authorized in the state wih a student envellment of 48,00. The independent charter schools “ZR” account for 23 ofthe charter schools wth a student population of about 9.000" Charter schools ware fist established in Minnesota in 1991.‘ Thay wore the brainchid of Democrat Senator Erber Reichgott Junge who ‘we had the opportunity to confer with bout her ansfotmative concept, The success of charter school is {apparent eround the county sine thei intial experimert and they ava championed by Republicans and Democrats alle .Charter shoals re aublicschoels, open to all chien without ary special entrance requicerents. Charter schools, 3¢ defined nationally are independent schools that operate outs ofthe fon eantaet batwosn the echoo! dati ond teechers union The charer schools iy havea innate approach to education; Ike Milwaukee's College rep Charter Schools or Racketship Charter Schowls. Als, ‘they may be more specifically focused on certain eles af study suchas Science Technelogy Engineering andor Math (STEM, or preserving aspects of culture and community like te Hmong Peace Acsdem. 66 For years, charter schools have brought new ideas to the work of educating ‘our sons and daughters, and during National Charter Schools Week, we recognize their role in strengthening American education... Our children only get one chance at an education, and charter schools demonstrate what is possible when States, communities, teachers, parents, and students work together. 39 - President Barack Obama May 7, 2012 -Presidentiol Proclamation - National Charter Schools Week Chatter schools are a positive for any community Similar to the voucher program, thir existence applies pressure to traditional publicschooke ta increase ther educational delivery system in order to compete ‘State aw permits the following groups to authorize a charter schoo! in Mihvaukee’ the Mibaukee Public School Boar, the Univesity of Wisconsin (UW)-Milvaukeo, Milvaukoe Area Technical College (though they have novar exercised ther author) and the City of Miwackee.* Granting a licanse to operate a charter school ‘sa long, complicated process The procedure should be thorough, but often pics wil intervne withthe creation of a new school in aneighborhood. tis important thatthe proces isnot rushed and that careful consideration is gwen te ensure the school plan solid and thatthe school operetors ae reputable, However, ‘the red carpet shouldbe rlled out for charter schools that ar high performing, Reform: Allow high-performing charter schools to replicate without the approval of « charter school authorize ‘The criteria for plication is on@ where a charter schools reared to achieve tet score in bath math and reading that exceed the test scores of the loca public schoal by ten percent in the two preceding school years “The threshold creates a goal of excellence, which rear an outstanding school with greter autonomy apd 9 lense to continue thei successful model in ther parts of the city The prvlege of beng able to roplicato without an authorize will also provide an atracve ncetive forthe school professionals to matte tel team. Turnaround Schools Gest things are happening in some Milvaukee schools, but entrenched intrest ae preventing large-scale reform from taking held. Thousands of chicren representing a significant portion ofan entire generation, ae vitims ef lew academic achieverant and therefore, dependence on government. comet| 2005, Hurricane Katrina devastated the ciy of New Orlears. In particular, the schools were hit wth physical damage, students and faculty wore displaced and a community war left with daep sare at result of the devastation. An innovative approsch was introduced, out of neces that has changed the landscape of ‘education. Inan effort to open up schocls quickly and decenvalize power, the state created anew schoo! DOESA SOCIAL =f —_, =m (0) Sure p/n on/dowica/ opr Sei reeton/ Miia, Soc pac Bonds. Ron coaseré BJ‘Once the target population and problem are established, the governmant, the social service provider, an independent aucitor and the fnancalintarmediary can deine benchmarks, the social service provider can provide financial savings t the government andl therefore the taxpayer, then the financial intermediary wil be ‘ble to pay the investors forthe loan wth the state rate of return The interest rats and payments vary with ‘ch SIB the desived result isnot met then investors are not paid back and ther financial commitment ‘reverts a traditional charitable donation. SIBs are defined as government contracts, where a private str intermediary purchases socal soice Providers) and in tum, pays the intermedia but oly the provider meets performance targets, The [Payments or return on investment are funded at last partially by the cost savings the social envice provider ‘chieves by implementing ther project S185 are financial instrument o lure more invests rom the private sector nto the puble sector to find Savings inthe programs that governments aciministax. The San Francisco Federal Reserve Bank highlights tha, "IBS operate atthe intersection of tree important trends: greater funder interest in evielenca-bated practices insocial service delivery; government interer in performance-based contacting. snd mpart investor appetite for investment opportunites with both financial retumns and roca impacts" It's importers to note that SBS will never replace private fundraising or government aid because not al socal programs have quantifiable results. Quantfible results are atthe heart of Ss beceuse abenchmarkhas tobe established and audited by an independent thd party Bolore invertors can be paid Back 6 The status quo isn’t working, That's why it's so encouraging that California policymakers are willing to partner with the private sector to drive better performance in government. If the private sector wants to pay for the state to experiment with programs that improve social outcomes and redluce costs, it could be 2 major win for both the programs’ recipients and taxpayers. 33 « Leonard Giroy — Director of Government Reform, Reason Foundation While Sits are elavaly new, several states and oven cites have implemented programs in their espactive Jursletons to adeross 3 wide range of socal diemmas. Even mare states are inimplementaton infancy and they ro conducting feasibility staces to assess optimal etategies and solutions Ia legiation has passed in fourteen states and the District of Columbia since 2012 (Appendix Il- a it of governmant that hove ‘entared into IB Contacts) ‘An example ofan opponurity in Wisconsin could includ the chronic racidvism in Milwaukee's inner city The State of Wisconsin spent $32,824 per inmate in 014. Let us assume a tied party, Hope for Young Men, has ‘an des for reducing recidivism among 20-30 year old mals, which stands at 0 percent A private investor or chartable tut, could provide $1 milion t funda program establched by the Hope for Young Men The State ‘of Wisconsin could draw up a contact. Ifwe know, é0 ut of 100 mes will go backt ja foran average oF S yeas, the cost of each incvidua thet comms anether rime is approximately $150,000. The contract could State the program yields a recidivism rate of only 30 percent than the state could save the cost of 30 Drsoners at 2 cost of $180,000, which equa total of approximately $4 millon in taxpayer savings, The sate ‘would tur the $1 milion xo he iivestor wth an agreed upon rtur, lat us assume itis TU percents the State would spend $1.1 millon, butin return would be saving taxpayers $24 milion while 30 young men go from life in the ciinal justice sytam to being able to contribute t thei familias andthe cornmurity 66 These pay-forsuccess programs make a lot of sense because its an ‘opportunity to expand social services to people who might not otherwise _get them, andis an innovative structure that encourages public-private Partnerships. 9¥ “lan Rosenblum ~ Deputy Secretary of Education end Economic Opportunity, New York State owes HE‘is oer ll invested partis (a.9. government, scil onic providers, investor) the transparency to see vihere their money is used most efectivaly to achieve long-term savings. This concept proves incentives for government to move anay from the status quo and ty new ard inventive sation with a private pubic Partnership. According to the Federal Reserve of San Francisco, “SIBs expt ok to crete a marketplace for impact ivestment, supported by rigarous due dligence and analytes. Dalvring free market eas to solve societal preblems sa proven affective tool that shouldbe an option, Inthe end an inestors motivation may be charitable, t may be profit, x a combination of the two, The ‘motivation does not matey, hat matters is progress. SIBs wll increase the number of stakeholders, encourage entrepreneurial activity in order to solve societal issues and reward tha individuals al organization with proven ‘rack cords with ational captal 0 exsand therefor to increace outcomes Reform: Require Wisconsin state agency heads to examine existing programs and submit «plan to the Join Finance Committee with existing government costs that can be decreased, or programs that could dalver better results, by employing the use of SIBs Create the legal framework necessary and allow state agencies to enter into SIE contracts with the approval of the Joint Finance Committee. conorChapter 5: Benefit Corporation & L3C ‘Anew business made! is emerging in the Unite States. Tes range rom mission business, inpact-diven besiness or B-Corp In she legal community they ae best known as banat corporations According to the "National Cound of State Legislatures, “Benefit corporations are taxed like tractional corporations, but are protected from potential shareholder lensuts claiming they fai to maximize profits Currnty there ore ‘ety-four states that allow benefit corporations ta charter in their expactve state, Two of Wisconsin's bordering states, linois and Minnesota, already alow for these corporations and the other neighboring states have invoduced legislation ® 66 This isn't charity just a new business model with less brick and mortar, smaller margins and more community focus. 39 ~ Saloni Doshi Entrepreneur, Fresh Takes Kitchen ‘Abeneft corporation allows capitalism and philarthrapy to work together in order to encourage the stakeholders to seek profts, but equally important, create a postive impact nthe community. Enveprenours 00k 10 solve many social ils though new business ventures whila tuning a nominal profit Benefit corporations are not 501(4 ( nen-prois, but they operat inthe same markets and seek the same socially beneficial outcomes. Beno corporations ae not allowed the same unique tak treatments thatron-profis receive, nor can they receive chaitzle donations. The advantage toa benefit carporation i the legol protection to consider the interest ofall stakeholders, rather thon jst the shareholders who elected them Reform: Create legislation that allows organizations to be structured as benefit corporations The fow prof limited lity company oF L3Cis another business model to leverage private dollars to _adminiser services for charitable good. The business can primarily serve a charkabe interest o indirectly support the sence or operate in both arenas. The model seeks to erove bureaucracy fom the stuation and Implement entvepreneutship to deliver beter results. The LIC busines model may be atractve to business fo lminate the regulatory burdes ofthe nonprofit word while providing the same public sence. L3Cs can be found in Vermont, Michigan, Utah, Wyoming and lings. 66 The L3C is the for-profit with the nonprofit soul. 33 + Robert Lang ~ Founder of Americans for Community Development The impetus forthe LAC model arose because of the techicalites with RS regulations regarding program related investments (PRI and charitable giving by foundation. A foundation i raquited by into give sway or invest in PRs approximately § percent of ts endowment every year ta remain tax-exempt According to the ‘tiginatr of the L3C model, Rober: Lang fram the Americans for Community Development, °LICsfacitate PRI invesiment alongwith tranched (ayerec investing where the PRI usually tales the frst rik postion theroby reducing risk or ether investors in higher retom tranches» Wisconsin shoul offer businesses nthe state the ably to reorganize or charter as these types of businesses to operate n Wisconsin to further the mission of public eensco and aentm Reform: Create legislation that allows organizations to be structured as L3Cs. coorsEndnotes, 1. Rectos Robert and Sheffield, Rachal, "The War on Poverty After SO Yeats.” The Heritage Foundation, September 15,2014 2 Pawasart, Jahn and Quinn, Lois M, “Wisconsin's Mat Incarceration of Ain American Males: Workfoxce Challenges for 2013." Employment and Tring Isttute, Unversity of Wisconsin -Milvackos, 2013 23. Deparment of Public Information, “WISEdash.” hp:/wisodash doi vi gow/Dashbosrd/portlHome js. ‘Accessed on January 18, 2015, 4. Wisconsin Department of Public lnstruton, "Dinter Shaul Ruri Cac" htp:/ireportcards dpiwi gov! Accessed on October 10, 2014, 5. Wisconsin Legislative Fiscal Bureau, “Open Enrollment Informational Paper 27.” January 2013, 46, Democrats for Education Reform. “Hon, Ember Reichgott Junge, former State Senator MN.” hep:/wnwidfecorg/2013/01/hon_ember rich php, Accessed on January 16, 2015, 7. National Alince fr Public Chanter Schools. "What are Public Carter Schools.” hnap/wuepublechartrs orgigetthe-facteipuble-charterschoole. Accessed January 16, 2015. 8. Wis, Stat. §118.40 28 for, {2 Brinson, Dana, Boast, ya, Hassel, Bryan and Kingsland, Neeray, “New Orlean Style Education Reform: A Guide for Cites, Lessons Learned 2004-2010." January 2012, 10. Depanment of Workforce Development, “Wisconsin Warklree, Economie Development Leaders Salute First Graduate of Dual Enrllment Academy at Waukesha County Technical College.” htp:/idwd wscorsin.gov/dudnowsraloase/2014/140611 dual aneliment_academyhim Accessed on Decamber 29, 2018 11. Wisconsin Legislative Fisea! Bureau, “Schoc! Integration (Chapter 220) Aid Informational Paper 25” January 2072, 12. Wis. Stat. §121.845 13. Wisconsin Legislative Fiscal Bureau, "State Aid to Schoo! Districts Informational Paper 24. January 2015. 16, Wis. Stat. $118.33 (2 (0). 18. Coughlan, Sean, "Cuviculum changes tocatch up with worlds best.” BBC News, July 8, 2013. 16. Cooperative Educational Service Agency #1. "2014-2015 Budget Proposal” September 16,2014 17. Nusser, Susan, “Can 30th Strest Corridor Be Reclaimad?* Urban Mivaukes, September, 2014 1B, Yakovlev, Pavel A, "State Economic Prosperity and Taxation.” Mercatus Center, George Mason University aly 10,2014 19, Scheuing, Kristen, “Wisconsin Auto Legacy." Wisconsin Tals. March/Apil 2012 20, Drenkard, Scot and Henchman, Joseph, “2015 State Busines Tax Climate index.” Tax Foundation. 2014, tint FE21. National Right To Werk Legal Defonse Foundation Ine. htp:/nrtworg/ Accessed October 21,2014 22, Wi, Stat, §100:30, 23, State v. Withrow 28 Wis, 404,280 NOW, 364, 266 24, Carpenter, Dick M, Erickson, Angela, Knepper Lisa and Ross, John, “Lice to Work A National Study of Burdens for Occupational Licensing” insti for Justice. May 2012, 25, Adkins, Jason, "Unhappy Days for Milwaukee Entrepreneurs, Baw City Reguletions Make it Hard for Businesses to Achieve the High Life.” Institute for Justice. November 2010, 25, Milvaukee Coco §295-502 3 Subchapter 5 Residential Disticts 77. Lemos Penelope, "Golan Sachs Weighs on Socal Impact Bonds " Governing Magasne. November 14,2012 28. Agovin, Theres, “New Funding Tool Could Spur Nonprofit novation” Cras New York Business pri 14, 2014 2. Giro, Leonard, "California Seoking to Partner wth Private Secor in “Payor Success’ Program Reason Foundation July 25, 2014, 30. Enailfom Tory Stovelr Exocutve Policy Advisor at Wieconsin Department of Conections, November 2014 31. Polandjian, acy and Ragin, J, Luther, “Soci Impact Bonds: Using Impact Investment to Expand Elective Socal Programs.” Federal Reserve Bank of San Fransco, Api 2013 32 Hanson, Melissa and Morton, Heather, "A New Kind of Busines is Redefining the Private Roe in [Addressing Socal Problems” National Council on State Legislatures. April 2013, 33. Bend, Doug and King, Alex, "Why Consider a Boneft Corporation?” Fares Magazine, May 30,2014 34, Lang, Rober, “The L3C - Background & Legislative asues.” Amarican for Community Development 2013 35. Senate Bil 593 introduced by Senator Lieu Legislative Counsel Digest February 22, 2012 236, "Pay for Success." Ofce of Govemor Pat Quinn, hts:/wm2ilincis. gov/gou/PFS/Pages/defout aspx. ‘Accessed October 10, 014 37, Office of Governor Deval Patric, “Massachusets Launches Landmark intiative to Reduce Recidivism among AtRisk Youth,” January 2, 2014, 38, New Jersey Assembly, No. 3289 introduced by Representative Angel Fuentes. September 27,2012. 39. Office of Governor Andrew Cuomo, "Governor Cuomo Ansounces New York the First Stat inthe Nation ‘to Launch Pay for Success Projectin Intiave o Reduce Recidivism,” December 30,2013. 40, Wiliams, John C., "Letting lnvestors Take a Shot at Curing Socal I." The Wall Steet Journal. Sept. 23, 2014 41. Executive Office ofthe Mayor - Vincent C. Gray, “Mayor Pursues Nation First Social Impact Bond for Financing Programs to Reduce Teen Pregnancy & Improve Education " May 1, 204,Appendix | American Survey Data (2008-12) ‘POD: SELECTED ECONOMIC CHARACTERISTICS ‘2406-2012 American Cormmunty Survey $Year Estimates ae fm fr, Poo er [oem in Pm str fe Poet ee gaa je fos ao ee fata fa fase foe fc fee es fear hea a feza — fas [var beare fos esse [aos fe [ise fat feos at foe fc far “tae fsa fsa —fe—oer—loooe [sat fo — re far es fear fk ss [anos Jaina? [aoa frm sae i = l —9=l a pit eon aa fae cafe faare Im ae fae 7 faa [est fseow fe [ees oes rz [nar fener Senter [aso lvee_ fs [ts — [at [va forme [asa (oar fea fo ea Tasca” aos [vat — fas [oases [ust [ras fuar-feaee fre ese faa ea fe fear [te [tr — la —frae taf i ie [aur bare feat fsa foors [wat lo —fsas foam [oat mane [ofp ets [fate a Peer ore ft Sameera —— [ea waa ire tea ea a nl = ll i=l = pues eered [a fa [aa easter (far Toe fester cto cr [sown [aon [st — [ope ‘Gass e ——rza0 vor [sus [ez Ivana fan [ty — atta a [nas [ioe fies har fuse frre fea [ts — ffs Sea fos [| fate bse ofa faa a fe fre loom fearloom [van — [wf Tanase [sae fs [amas rane [tr — lao fra 7 3 fae oy — saa mode Elae fem Pm ame [em fee Pom ese fm i, Pe eee ease ye oo [agar a Tas] iar ta ie jos Joao |v [ota fests [arom oar ‘Castes a [oases [sane [ets — [nto fae feat iesoe loa ood fant fscsok [ts — [re par fa_|aom [sar sc ris [wate fox [08 — [ape ce fant — [set room [ea Tso tiaras [rot fae fre fa — bas ba Tana fais fr [wee [15 [tan [some [po [glee [am aan [a Samaroo [oe rosa (ar p= fee [Mame [ocean [een Junge Poo [wien [emer loge foret Jame re a lstre |” [sen lsc | [xtnr aan eye ed [aaa ren amb [ae ore jaa fer: umn ananassae arava ar fra feos a6 [ea uant rea —faaet [eet Jorn [a ores [est [soon as — [eon roo one fsa — hs [ve [rae Dees jo —foristoeow ei ian rae rome [rte frame ens [ras Tene Fs fs ox far fae [vas —[u [3 lovox [eat Maries [ise fans ener fuse far [so loon [aor veo va Saree ira Ina laa [a sovmes! EAppendix Il - Map of Targeted Zip Codes ‘STATE OF WISCONSIN County of Milwaukee! vane \ ze a oe te sos 2 em & $ Batt Wauwaidoa = fs, | sms dosaul a Ss oa = a s 8 sai x WAUNESHA : P = sous New)sertinsast | some Grkepielt 7 ndaby sho 0 Saar { MILWAUKEE tememmeatt | esteae seri Oak Creek ond EBAppendix Ill - Various Social Impact Bond Projects by State California prison recidivism, Over the lst decade, more than half of adult felons lasted from California. [risons have retumed to the correctional system within wo years.” With thatin mind, Democratic State ‘Senator Ted Lieu introduced Senate Bl 73 lst year. This legislation estabishes a plot pragram for socal Impact partnerships. The program would be fcitated through the governor’ ofce with the stated goal of entering into three pay-for-suecess partnership before Decemiber of 2017. The state would seek to improve ‘utcomes or lower state costs, to reduce recidsm, to reduce child abuse and neglect. or to assist atk and foster children, As of publication af his decumant $8593 is suaiting a vata in the Senate chambers inois~ prison recidivism. On May 5, 2014 Gaverner Quinn sanounced lines wauld participate in SIE, One Hope Unie) iv tate wi te Conclenes Community Newarcwil address atst youth hei welts and)jwanil justice systems inthe state. Capital Parnas isthe financial intermediary who hos eta goal of ‘raising $30 milion to fund this initiative for veto seven years. Io 2013, the lina Department of Children and Family Services spent $158.3 milion to pace 1323 juveniles in coup amas or other nsttutions via 92 separate contracts with the stata “Massachusetts ~ prison recidivism. On January 2%, 2014 Governor Deval atic announced therstate's fest SB. The project is focused en about 929 “high-tek” young men as they move out ofthe juvenile justice system, Currant, Massachusetts Figures incite that t percent of these juvenlas ae expected tobe r= incarcerated in the following fie years and arly 35 percent gain any form of employment within 8 year of release from prison, Annually the state spends $7,000 to imprison an individual “The financial intermediary forthe SIB is Thid Sector Capital Partnrs and the socil service provider is Roca Inc Money raised for this endeavor totals $27 milion and the state estimates the project wl lst seven years The benchmark forthe project sto reduce racism by 40 ercant wth the potential to reduce the state's incarceration experetures by $200 milan. The program’ sucess wil be determined based on redacions nthe numberof days young men served by Roca spendin jal and imexoverents in ther employment end job reciness” |New Jersey - preventive and earl intervention health care, Assembly ill No, 3289 introduced on September 27, 2012; pasted beth houses on January 13, 2014, but packet vetoed bythe governor onJaruary 21,2014. The legislation started the SIB a a fve-year plot program administered by the New Jersey Econom Development Authority. The legislation defined the SIB as, "A contract between the public and private sectors in which ‘commitment made to pay for improved financial and socal outcomes that result in public sector savings [New York- prison recidivism. Governor Cuore announced in his state ofthe state aléess on December 2013, ‘that New York would be the frst state in the United Staas to undergo e saciaimpact bond. The SIB has 2 goal ‘of reducing recidivism by a laast eight percent or inrease employment of former praoners by a least five percentage points. The governarsofce states that i the SIB is successful the state wl realize $78 lion in savings. Th financial intormeclary represents mare than 0 investors with Bank of America Merl Lynch being the primary investor who in aggregate raised $135 millon. The state partnered with Chesapeake Research Associates to act as the independent validator and the eocial sevice providers the non-prft Canter fox Employment Opportunities. In addition the state budget set aside $30 millon for ational socal bonds. New York Citys curently taking advartage of these funds by implementing the Riker’ therapy program with goa of reducing juvenile rec = Utah (Sat Lake Coun — eal learning intatives: On July 6, 2013 the Sal Lake County Counted to approve an SIE with the United Woy of Sak Lak olating he tesimer om seerel imei the ngest Bang Goloan Sachs. the 87 lion restos ill xpans he Granta snd Pak Cy school Sabie program for atk chicken The SB wil py restos ot 9 ap ofS paren om expats sare savings for Specal education senies Curent, Uiah Anda spcia-echention progr aa ate of ereund 92.600 pet student annually ity leaders and investors believe they can educate stent population tha would hae ‘hese specsecucaon programe open FED‘Washington D.C. —teen pregnancy. On May 1é, 2014 Washington D.C: mayar, Vincent Gray, announced the citys desire to workwith Socal Finance US as an intermediary to atwact investors and locate a socal provider +o lower teon pregnancy and improve educetional outcomes for those in highschool, The city is urde'going & request for proposal to identify the best socal sevice provider to meet thai laudable goals = “More cits anc states wil evaluat SIS inthe upcoming year Last yor several state eg. Colorado, Michigan, ‘Ohio and South Caralina) won a competition held bythe Rockefeller Foundation and Harvard University’s Kennedy Schoo! of Government for tchrical assistance to implement social impact bond projects AopenAppendix IV - Quotes President Barack Obama — 4th President of the United Stator of America “For years, charter schools have brought new ideas the work of educating our sons and daughters, and drig National Charter Schools Week, we recognize ther olen suengthening American education Our children only get one chance at an education, ana charter schools demonstrate what s possible when Stats, ‘communities, teachers, parents, and students work gether” Leonard Gilroy - Director of Government Reform, Resson Foundation “The status quo isn't working. That's why it's so encsuraging that Calforia policymakers are wilng to partner uit the private sector to drive better perfomance in government Ifthe private sector wants to pay forthe State to experiment vith programe tae mprnunsorialmutenmns and rckion ent oul he oma win for both the programs’ recipients and taxpayers" lan Rosenblum ~ Deputy Secretary of Education and Economic Opportunity, New York State “Those payfor success programs make lot of sanse becouse an opportunity 19 expand socal senices to people vine might not otherwise get them, and isan innovative structure that encourages publicprvate partnerships * Saloni Doshi Entropreneur, Fresh Takes Kitchen "Tess char just anew business madal wth ess bck and mona smaller metgins and more community foes,” Gordon Denlinger - Pennsylvania State Representative "Pennsyvania is open lor busines, the business of combining the best of capital with American idealism * “inate of ight budgets, we need 0 pursue an al-ofhe above spproach when tackling socal sues, Goverment fas a role, but in many situations the fee enterprise system can bring more efcient and effective results" Jamie Raskin Maryland State Senator "(Benefit corporations) allow for ianovation within capitalism because it rita into these companies’ DNA, that thay can go beyond their core monay-making hunction to eeate 2 postive impact in ocety and the wot.” John C. Wiliams ~ President and CEO of the Federal Rasarve Bank of San Francisco "Sls may have the potential to lp governments adcress some of eur nation’s most obstinate problems and scora wins fer everyone: the pevate sector nonprofits, government a the loca state, and feel level ond mast important, eiizens across the country" Loyal Blankfein - Goldman Sachs CEO “(On Social impact Bonds)... Sometimes investors ae motivated by standing for something We want tobe combination of people’ beter instincts and ther desire not to lose money fit works, kl got bigger and bigger and havea Ife of ts own.” Ron Paul - former Congressman from Texas’ 14th district Rightzo-work laws simply prohibit coercion. They preven stats from forcing employers to operate as closed union shops and, thus they prevent unions Krom forcing inaviule to jon. In many caues igh. werk lave a the only remedy to federal lans which empower union bosses fo impose union dues as a condition of ‘employment Right-to-work laws do not prevent unions rom bargaining collectively with employers and they {So not prevent nviualefam forming or joning unions if they Belews iwi benefit them Vincent C. Grey ~ Mayor of Washington D.C. 'SIBs ae also an innovative way to ensure better outcomes while reducing rsk exposure forthe taxpayers of the District. We loakfarwarl to working with Social Finance US to structure 9 SIB that brings rigor, cisepine and private capital to help improve to help improve the lis of our young people and our enti iy” Deval Patrick ~ Governor of Massachusetts "The Pay for Success intative wil allow us to marry smart financial soltions wth programs proven successful In helsing high~isk your become employed, stay employed, and break the cycle of violence.” Robert Lang ~ Founder of Americans for Community Development "The LSC isthe forprofi mith the nonprofit soul” pend EE]