Social Impact Bonds

My life’s trajectory turned on a dime on February 4th, 2013.  As a result, I have decided to follow my lifelong dream of running for Cincinnati City Council.  My platform revolves around tax incentives for big business, better not for profit management, education reform and a resolution to our city’s pension issue.  One of the methods that I feel could help resolve two of the aforementioned four topics is the implementation of a social impact bonds (SIB) initiative in our city.  I would like to see SIBs, similar to New York City, address recidivism rates in Cincinnati.  For close to five years I worked with returning citizens with felony convictions at my nonprofit, Choices Café.  I learned of injustice and the difficulty it was for my friends to find gainful employment.  With strategic and innovative nonprofits in Cincinnati like Lighthouse Youth Services and Hillcrest, combined with the global headquarters of Procter & Gamble, it seems to be a natural next step for city government to propose SIBs to the community.  Furthermore, the University of Cincinnati has compiled much research that already proves what methods help to reduce recidivism.  We have all of the players needed to make a significant difference, now all we need is a leader to make it happen.

SIBs were first implemented in Peterborough in the United Kingdom.  The initial model was developed by Social Finance and was geared toward reducing the recidivism rate in the city.  To date, the model has proven successful and the first SIB piloted in the United States is currently being implemented in New York City.  This model is also aimed at reducing the recidivism rate in the city.

A SIB is not a “bond” in the traditional sense that it is held to maturity with a guaranteed return.  Rather, it is “pay-for-success” social impact loan.  In the SIB model, an investor will make an illiquid investment into a program and only actualize a return if the program is successful.  In this way, the investor stands to lose money in the worst case scenario – break even in a better case scenario – or make a minimal profit in the best case scenario.  Nirav Shah, director at Social Finance, describes SIBs in this way:  “a Social Impact Bond is an innovative public, private, nonprofit partnership that raises capital to funnel into prevention programs and bring them to scale” (Hudson, 2).  The unique facet of SIBs is that they do bring so many, seemingly disparate, groups to the table over initiatives that have proven success.

To date, the SIB model is comprised of four primary stakeholders:

1)  The government (local, state and/or federal)

2)  The investors

3)  The social service providers

4)  The intermediary

To me, the role of “intermediary” is the key element in this arrangement.  It is no secret that the three other stakeholders are not commonly seen in the public sector as “allies.”  In the SIB model, they are not only allies, but partners with a mutual dependence and vested interest upon one another’s success.  The intermediary’s role, according to Shah, is to “identify issues that we think work well with SIB financing – identify solutions, bring the stakeholders to the table and then [sic] issue a Social Impact Bond” (Hudson, 3).

The model in NYC is groundbreaking and is formed by a partnership with the city government, Goldman Sachs Bank (not their foundation), the Bloomberg Family Foundation, MDRC, Rikers Island and the newly formed Adolescent Behavioral Learning Experience (ABLE) program.  ABLE was developed as the means through which the city and Goldman Sachs will reach their objective – namely that the recidivism rate in NYC will fall below the current 50% level at which it stands now.  If the recidivism rate falls by 10%, then Goldman Sachs will be repaid the $9.6 million dollars they invested.  If the rate falls by more than 10%, then Goldman Sachs will actualize a return on the loan upwards of $2.1 million.  A key facet of this arrangement is the guarantee clause.  For example, if the recidivism rate falls by 8.4%, then Goldman Sachs receives no payment – however, if the rate falls by a minimum of 8.5% then Goldman Sachs would receive half of their investment back, or $4.8 million.  This guarantee, which has been pre-invested by the Bloomberg Family Foundation in MDRC is quite similar to a loan guarantee a bank would issue to a small business (which is, in reality, far riskier than loans made to large corporations).

Andrea Phillips, vice president of the Urban Investment Group at Goldman Sachs, raises a very valid point regarding the risk involved with the SIB model – the “implementation and impact risk.”  That is, selecting the method to combat any given social ill, in this case, recidivism, must be painstakingly well-researched so that all of the parties involved actualize their return.  Most importantly, however, the research must be well-founded so that those impacted directly by the program – the service recipients – are receiving the best quality care for their individual needs.

A few “kinks” in this model are evident.  One is what will happen when Mayor Bloomberg steps down as mayor and someone else takes his place?  What will happen to this well thought out initiative?   There must be contractual clauses in the government contract to ensure that these kinds of situations are thought out.  In Massachusetts, where an SIB program is being initiated, the local government has set their money aside in a trust so that it cannot be touched.  In NYC, there is a clause that any new leadership, if he/she wanted to cancel the contract, would have to pay out the loan in full to Goldman Sachs.  Another potential hazard is that of the government turning over responsibility to a third party – this is why research and outcomes must be firmly sought before any decision is made.  If, after much deliberation, a program such as ABLE is proven to produce results, then I feel only good can come from the arrangement as the government has certainly never proven that it has the capacity to help those who need it the most in our society.

So, why consider this model?  For starters, the not for profit world of financing is drastically changing and many investors want to do just that, invest, in NFP capacity and scale.  Secondly, money in all of our major cities is fading, pensions are dried up and regional city councils have no time to focus on matters of great import (like recidivism rates).  SIBs free up councils to get to the work at hand while the city government actualizes a return on their outside investor’s cash by “transferring performance risk away from taxpayers and onto investors” (Hudson, 4).  In essence, taxpayers are only taxed when the programs succeed and the government needs to utilize those tax dollars to pay back their investors (as opposed to the widely accepted current model in which citizens are taxed regardless of outcomes).  Thirdly, the NFPs involved in these initiatives are guaranteed funding for five to ten years, not simply one year (a typical grant cycle), which gives them enough time to build to scale.  Fourthly, the investor actualizes a double bottom line – i.e., a social impact and a minor return.

So, how would this model look in Cincinnati?

First, a bit of background on our city, state and nation:

–        In our city’s concentrated areas of poverty – Avondale, Over-the-Rhine, the West End – the joblessness rate is 40%, and a breeding ground for increased recidivism.

–        The labor market for young black men is significantly deteriorating in Cincinnati as the average age of dropouts is rapidly reducing.

–        Nationally, 60 – 70% of black male high school dropouts since the mid-1960s now go to prison.

–        The United States accounts for 25% of the world’s incarcerated population.

–        Ohio has a recidivism rate of 31.2% (as of December, 2012).

–        Cincinnati’s childhood poverty level is the third worst in the nation.

–        There is a direct correlation and causation associated with children raised in poverty, incarceration and increased recidivism.

(Data compiled from City of Cincinnati Public Safety Committee and the State of Ohio’s Department of Rehabilitation and Correction)

As a city council candidate in a city with the 3rd worst childhood poverty rate, and as a man who has dedicated his life to serving those without a voice, I see SIBs as being able to impact our city in a very positive way.  In Cincinnati we already have all of the makings for a team that could assemble over the cause of childhood poverty & recidivism and make a profound impact.

The players that I see collaborating to make this dream a reality are:

–        The City of Cincinnati government

–        The Greater Cincinnati Foundation (GCF)

  • GCF’s role would be to help with the guarantee and also with monitoring of programs.

–        The Health Foundation of Greater Cincinnati

  • The Health Foundation would serve as an excellent intermediary for this entire proposal, as they already provide numerous pro bono services to providers in the Greater Cincinnati Area, and one of their main foci is that of developing healthy living and behavioral excellence in our area’s youth.

–        The University of Cincinnati

  • UC has done extensive research into what makes a recidivism program successful.  Having a leading research university on our team would not only aid in selecting a program, but would also have the potential for serving as intermediary.  UC has already identified the following five as being facets of truly successful recidivism reduction programs:
    • Leadership and implementation
    • Staff
    • Offender assessment
    • Treatment components and core correctional practices
    • Quality assurance (www.uc.edu)

–        Harvard Kennedy School

  • The Rockefeller Foundation gave the Kennedy School a large donation so that they could provide pro bono technical assistance to State and Local governments for project monitoring and program implementation.

–        Kroger, Procter & Gamble, General Electric, PNC Bank or 5/3 Bank

  • One of these five entities would serve as the primary investor.  If need be, I envision a model where one or two of the aforementioned participate in the SIB pilot in Cincinnati.  We are certainly fortunate to have so many companies headquartered in our city, and the untapped potential of SIB partnership is certainly promising.

–        Hillcrest or Lighthouse Youth Services

  • I envision the two collaborating to develop a brand new, state –of-the art program similar to (or even based on) ABLE.

A question that many will ask, and have already asked of Mayor Bloomberg, is “why is the government deferring responsibility to outside providers?”  The answer, as stated above, is quite simple – there is no money in local government to serve those who need it the most.

In Cincinnati our projected budget deficit in 2014 and 2015 is $25.8 million and $20.9 million, respectively.  Our council is in the process of potentially leasing our parking to an outside company and incur a $92 million influx of cash to help “right the ship” (an initiative I support).  That said, none of the monies are slotted to working with our indigent population.  If the $92 million can be used to offset the deficit, fatten the pension pot and build new developments to spur further economic growth, then I feel the SIB model will be able to do the same on the social services side.  As is evident from the list above, we have all of the major players we need right here in Cincinnati, but someone needs to make it happen.  Hopefully, come November 5th, 2013, I can be that person.

 

Works Cited

“Mayor Bloomberg, Deputy Mayor Gibbs and Corrections Commissioner Schirro announce nation’s first  Social Impact Bond Program,” Press Release, The City of New York – Office of the Mayor

“SIBling Revelry:  Are Social Impact Bonds the Next Big Thing?”  Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal

“The Communicator,” 2012 Report – State of Ohio’s Department of Rehabilitation and Correction

“Memo,” from Dr. Victor Garcia to Councilman Chris Smitherman – submitted to the City of Cincinnati Public Safety Committee

www.goldmansachs.com
www.uc.edu

“Why Now?” / “Why Not?”

In regard to my decision to run for Cincinnati City Council in 2013, I have received two unique questions:

“Why Now?”

(and)

“Why Not?”

I will take these two questions one at a time for now, and then let them intermingle as we move along.

First – “Why Now?”

The simple and basest answer is because this has been a dream of mine since I was a teenager, and I currently find myself with no employment. As this site used to say in the “About” section, my plan was to run in 2017 with Team Moroski. That plan, initially, was supposed to roll out in 2015 – but, due to Issue 4 (which my wife and I proudly supported), that timeline got pushed back. Now, we find ourselves in this current situation and the timeline has sped up.

God has a funny way of changing our plans, eh?

I remember joking in the Fall of 2012 with my friend & mentor, Laure Quinlivan, about how my support for Issue 4 would mess up my plans for a 2015 council bid, and it was at that point that many people began telling me to run in 2013 instead.

These are the people who ask, “Why Not?”

My response to them last Fall was because I was just getting married, I was serving on three nonprofit boards (two as Chair), I was completing a post-graduate program at the University of Notre Dame, I was researching a new administrative structure for the Archdiocese that would provide more cost effective & efficient services for students, and I was enrolling in a Principal Licensure program at the University of Dayton.

Seemed like a bit too much going on to begin focusing on a political campaign. Above all, I wanted to be able to spend time with my new bride, Katie.

Well, on February 11th, 2013, our life changed drastically. People again began asking me, “Why Not?”  My response was simple – because I had absolutely no idea what was going on, I had no stability, I had no job, I had radio stations and news reporters literally blowing up my phone (my contacts imploded and I lost many numbers), and Katie and I had not had a chance to breathe.

That’s when Katie and I went to Toronto to see Bon Jovi (a trip for which we had bought tickets months ago – the timing, however, could not have worked out more perfectly).

In Toronto we relaxed and we rocked to all of Bon Jovi’s hits. Then, on Monday, I had a conversation with a good friend who works in higher education and he proposed a few job possibilities to me. I loved the conversation, but was having a difficult time figuring out why.

And then it hit me! It hit me like a rock between the eyes. For the first time since February 4th, 2013, I was not only thinking outside of the very immediate present, I was talking about my life outside of the very immediate present – in fact, I was talking about the future.  I began to feel “normal” again – as if the ground was firming up underneath my feet.

On Tuesday, February 19th, Katie and I attended our friend, Chris Seelbach’s, Campaign Kickoff event at the Moerlein Lager House. It was great to get out and see a whole lot of our friends. We also made many new friends. Overall, it was a beautiful evening.

Chris gave a great speech and said some very nice things about my current situation and my courage. I was humbled. My friend Yvette Simpson said something to me about running this year – “Why Not?”

And then Laure came over to me.

Laure has been an excellent mentor and friend to me for a few years. I have always held her personal, professional and political opinions in high esteem. We had a nice talk, and she said a lot of things that really stuck with me.

Katie and I spoke that evening about running for Council this year. Katie, after all, is the Co-Candidate, and I do not make decisions without consulting her – especially decisions that will change both of our lives in a big way.

The next day, February 20th, I was on 1230 am, The Buzz, with Jeri Tolliver.  It was an excellent interview and I had a really nice time. Jeri asked me if I was going to run this year, and I said that I had not made a decision.  Jeri, similar to virtually every reporter with whom I have spoken over the course of the past two and a half weeks, asked me what I thought about the people that were saying, “Why Now?” – the people who see my refusal to recant my personal beliefs as some sort of really cheap political ploy to speed up my campaign to 2013.

My answer, like most answers in this post, is quite simple – I would respectfully say to those people that they just don’t know me. And that is alright – I would never tax someone for what or whom they do not know. If these very same people want to take the time to get to know me, excellent – I really like making friends. I feel that they would see that I am not some calculated political opportunist, but rather a man with a deep conviction that our city can be a more equitable and financially solvent place.

So, Jeri then asked me, “Why Not?”  She took it one step further and asked me what I thought I brought to City Council that wasn’t already there.

My answer is/was this – relationships, deeply rooted relationships, with the low-income population in the city and the affluent. Relationships built on years of accumulated trust and justice. Relationships born out of working, hand in hand, with those who do not have a voice for 12 very solid years.

This is not to say that the current Councilmembers do not have those relationships – because they do. In fact, I am a huge fan of the majority of Cincinnati’s Councilmembers and many are friends. They all have skill sets that I do not have – and I feel that my education, added to my close connection to many in our city without a voice, would not only benefit the entire city of Cincinnati, but the current Council as well.  Much in the same way they would help me to grow as a human being and politician.

After I left The Buzz, I spoke to my brother, Mike Rogers, on my way to WordPlay for a board meeting.  Mike asked, as he has for eight years, “Why Not?”

I no longer had an answer, and when Katie and I went to A Tavola for dinner on Wednesday evening we had an excellent conversation.

The end result of this conversation?

“Why Not?”

I am proud to say that I am officially running for a Cincinnati City Council seat in 2013.  If you are interested in helping out in any way, please contact me through this website. If you would like to donate, all checks are to be made payable to “Team Moroski” – for, as I have said elsewhere on this site – this is about something much, much larger than me – it is about all of us coming together to achieve our dreams.  It is about the Team.

Lastly, mark your calendars for March 20th at 6 pm.  Team Moroski will be having an official Campaign Kickoff event at the Montgomery Inn Boathouse on the 2nd floor.  More details to come.

Thank you all who have asked me, “Why Not?,” since I was in college.  And for those who still wonder, “Why Now?,” I very much look forward to meeting you and becoming friends.

Unity Assists.

When The Dust Settles

The dust has not entirely settled, but enough of it has fallen to the ground so that Katie and I can see through it now. Every now and again, a speck will float into our eyes, but, all told, the future and the present are both much brighter than they were a couple of weeks ago. In fact, things are brighter than they have been in a very long time.

How can things be so bright in such surreal, difficult times?

The students! The students who are using their voices for something in which they believe, the students who realize their strength, the students who are coming together and realizing that we are all one in this thing called, “life.”

The outpouring of support from students – past & present – and from families – past & present – has been overwhelming to say the least.  That’s why things are so bright – so significant.

It is nothing short of humbling that the cause over which these students and families are forging new relationships is that of this current situation. I hope all of you know that Katie and I love you dearly, and appreciate every single thing you have done – from peaceful acts of protest to petitioning to calling in on radio shows in support of us. Wow. You have always, and continue to, impress and inspire me.

Seeing a picture of a student who used to volunteer with me at ReSTOC when he was at Moeller years ago standing next to a young woman who serves as the school leader at Purcell Marian is nothing short of beautiful. Please know this, all of you – YOU are the change – YOU are the future. When the youth begin to make their voices heard, people listen. This is the way it has always been. Just please – always be peaceful, respectful and loving (as you have been – which makes this former teacher so proud). A great man once said, “love your neighbor.” That is some awesome advice. That same man once said, “love your enemy.” Now, that one is a bit trickier, but in love we come to see our “enemies” as people – and when we begin to see them as people and not the “other,” we begin to realize that they, too, have beliefs that they think are making the world a better place. When we realize these things we can begin to have conversation that has the potential to change the city, the state, and even the nation.

One last thing that the teacher in me needs to get out – always remember that actions taken that do not produce the desired results are NOT actions made in vain. No, if those actions are born out of a spiritual and just place, then they are right. Results are not always synonymous with justice, integrity and/or victory.

I will let Vaclav Havel sum up this idea much more eloquently than I can. For those of you who do not know who Havel was, he helped to lead the Velvet Revolution from a jail cell in Communist Czechoslovakia. After the power was given back to the Czech people (many of whom were dissatisfied with the fact that the Communists would not let them practice their Catholic faith), Havel served as President of the Czech Republic. His early life was spent as an essayist, playwright and poet.

Havel had this to say about public acts of civil disobedience and the actions of dissidents:

“The kind of hope I often think about I understand above all else as a state of mind, not a state of the world. Either we have hope within us or we don’t; it is a dimension of the soul; it’s not essentially dependent on some particular observation of the world or estimate of the situation. Hope is not prognostication. It is an orientation of the spirit, an orientation of the heart; it transcends the world that is immediately experienced, and is anchored somewhere beyond its horizons. Hope, in this deep and powerful sense, is not the same as joy that things are going well, or willingness to invest in enterprises that are obviously headed for early success, but, rather, an ability to work for something because it is good, not just because it stands a chance to succeed. . .Hope is definitely not the same thing as optimism. . .I think that the deepest and most important form of hope, the only one that can keep us above water and urge us to good works, and the only true source of the breathtaking dimension of the human spirit and its efforts, is something we get, as it where, from ‘elsewhere.’ It is also this hope, above all, which gives us the strength to live and continually try new things, even in conditions that seem as hopeless as ours do, here and now.”

The focus, according to Havel, should be on HOPE, not optimism. Hope will make you strong, even when you do not see the results you are seeking.

This is not, and has never been, about changing Rome’s stance on marriage equality. It IS very much about the Church hierarchy listening to the Wisdom of its people – it IS very much about encouraging the Church to recognize Civil Unions – it IS very much about allowing the youth to have their voice be heard. . .even if they don’t get the change for which they are desperately fighting.

So, when the dust settles, this is what I see.

I see the youth and the young adult taking a stand. I see them – black, white, rich, poor, gay, straight – unifying for something they believe; desperately trying to let those they respect in positions of authority know that the world THEY live in is not the same world in which their authority lives.

When the dust settles, I see a future that is bright with possibilities and a ground that is firm with all of the fallen, solidified dust particles. A future in which people are allowed to be who they are as long as they are not hurting anyone else. A future where homosexual teenagers do not feel as if there is something “wrong” with them. A future where ALL teenagers do not feel as if there is something “wrong” with them.  A future where all PEOPLE do not feel as if there is something “wrong” with them.

The dust has not fully settled, and it never will – which isn’t so bad, because every time one of those specks lands in my eye, it reminds me that there is still much more work to be done.

Happy Valentine’s Day

After the past week and a half, it seems quite fitting that today is Valentine’s Day. A day of love, and, for some, a day of sadness.

If today is one of those days that makes you miss someone or lament the fact that your love is shunned publicly, take comfort in the fact that you are loved by a very large group of people – the human people. The human people all love one another and we all have a stake in one another’s well-being. As my friend, Andre, told me on Monday – “we are all related.” Andre is a vendor for Article 25, a progressive news source found on the streets of Cincinnati. When Andre made this statement he was referring to the flood – you know the one, the one with Noah and the animals? That flood.

Andre believes that a flood happened because hundreds of cultures have a similar story to the one found in Genesis, the first book of the Bible. I wasn’t there, I don’t know if there was a flood or not, so, for the purposes of this post, I am willing to accept the flood.

You see, after the flood, there were only two humans and a bunch of animals. Due to this fact, Andre claims, quite adamantly, that we are all related. I like that idea.

Even if the flood never happened, I have, for many years, felt a kinship to most every person I see. I think it is simply because I like people and want to learn what they have to teach me. I like human beings, what with all of their flaws, insecurities, dreams and exertions of strength. People make me strong – especially people with whom I disagree on topics of religion, sexuality and politics. It is these people who give me opportunities to practice patience, non-judgment and acceptance – three things that are quite difficult indeed for any person to practice. I love practicing them – for, when I do, I feel that I grow in love.

So, what is this elusive word, “love,” all about?

Well, I would never pretend that I know as it certainly evolves over time (at least for me). The love I feel for Katie is a love that keeps the world in order – the love I feel for my students is a love that gives me direction – the love I feel for the marginalized in our communities is a love that gives me definition – the love I feel for those who have, throughout my life, tried to block me, distract me or even silence me is a love that challenges.

Are any of these loves more valid than any of the others? Are any stronger than the rest? After taking Katie out of the equation, I would say, “no.” I need all of these loves to bring peace to myself and others in a world that is constantly trying to disrupt that peace.

Since 1969, St. Valentine has not received universal liturgical commemoration in the Church. This is because there was not enough documentation on Valentine’s actual life to confirm who he really was.  All people know is that some guy, Valentine, had been associated with the Medieval idea of courtly love.

However, Valentine is still officially recognized by the Church for local veneration.

Some scholars believe that Valentine was actually two people – maybe three (very similar to the Shakespearean scholars who feel the same about William). Some say he was a priest, a bishop or a saint who suffered with many companions in the Roman province in Africa.

One of the most widely accepted and popular versions of the Valentine story is that he was a Roman priest during the reign of Claudius II. He was arrested and imprisoned because he was marrying Christian couples without Rome’s permission. Helping Christians was quite frowned upon during this time. In fact, helping certain groups of people all throughout history has been frowned upon – the frowning remains the same, the group changes.

So, today let’s “locally venerate” love and Valentine in our varied communities. Let’s take it one step further – let’s venerate not only those groups that we wish weren’t frowned upon, let’s show some love for those who do the frowning. In the end, they are the ones who need the most love.

In closing, I would just like to say that I love you, Archdiocese of Cincinnati. I really do. Maybe, in love, we can change the conversation.