Wall St. Cash Meets Social Policy in Jail

By Porter, Eduardo | International New York Times, July 30, 2015 | Go to article overview

Wall St. Cash Meets Social Policy in Jail


Porter, Eduardo, International New York Times


A bold experiment to fight teenage recidivism at Rikers jail in New York failed, but it may have helped set the stage for broader success.

First, the control group fell apart. Wardens at Rikers Island, the New York City jail, could not separate teenagers who were to participate in a course of cognitive behavioral therapy from those who were not supposed to attend.

Then the city's Education Department, which had offered to put teachers on Rikers to assist the intervention, pulled out. And the budget of the Osborne Association, which had been enlisted to carry out the therapeutic program, was cut when Rikers's teenage population unexpectedly fell below the level written into its contract.

"We needed two facilitators in each class instead of one, and we were serving twice as many kids because we couldn't separate the groups," said Elizabeth Gaynes, the chief executive of Osborne.

"We hoped to have people in the community to continue the M.R.T. outside after kids left, but we had to take outside staff and put it back in the jail," she said, referring to the therapy by its formal name, Moral Reconation Therapy.

Can something that fails prove to be a success? That's the question surrounding a bold experiment in putting Wall Street techniques to work in shaping government policy.

Aimed at reducing teenage recidivism by at least 10 percent, the Adolescent Behavioral Learning Experience was found, in a careful evaluation by the Vera Institute of Justice, not to keep teenagers from being sent back to Rikers at all.

This might all seem par for the course for delivering social services in the messy context of New York City's famously troubled jail. But what happened next set this experiment apart from pretty much anything tried before in the nation's correctional system: The city pulled the plug and walked away without losing a dime of taxpayer money.

The experiment, financed by the nation's first social impact bond, offers a glimpse of a potential future for delivering government services. It is a future that promises more rigor in identifying failure and success in settings from prisons and homeless shelters to public hospitals and schools.

"So often in government you don't have that level of clarity that comes from the rigorous evaluation that you had here," said James Anderson, who runs government innovation programs at Bloomberg Philanthropies, which was closely involved in the experiment. "That leaves the government thinking a program was successful when young men's lives were not actually improved."

Governments around the world hope it may offer more money to address their policy priorities, too.

The beauty of the therapeutic experience, from New York City's perspective, was that it was financed not by taxpayers but by a $7.2 million investment by Goldman Sachs -- backed by a $6 million guarantee by Bloomberg Philanthropies. The city agreed to pay Goldman back only if the program could trim recidivism by a tenth, enough to save some money by closing a section of the jail. While Goldman's profits would rise as recidivism fell below that threshold, the city would keep a share of the savings.

"These vehicles are structured in such a unique way that they carry very little risk for the government," said Kristin Misner- Gutierrez, director of social services in the Office of the Deputy Mayor for Health and Human Services, who was closely involved in the program as it was being developed under the previous administration of Michael R. Bloomberg.

Despite the failure of the program, the experiment succeeded in blazing a new trail. "One of the things that was nice about this was that people were being brave, doing something bold," said Susan Gottesfeld, who ran Osborne's operation at Rikers. "They were doing an intervention that had never been done before in a place like Rikers on a scale never done before."

For some young men, it was hardly a waste of time. …

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