Modern philanthropy is about results, not just money. Consider the partnership between Goldman Sachs, Bloomberg Philanthropies and the nonprofit MDRC. Goldman Sachs will invest $9.6 million in MDRC to create a program to reduce recidivism by at least 10 percent in adolescents released from New York City’s Rikers Island jail.
Bloomberg Philanthropies will provide a $7.2 million loan guarantee. If the program succeeds in reducing the recidivism rate by 10 percent, the New York City Department of Corrections will repay the full $9.6 million to Goldman, and MDRC will be able to use the loan for other programs. Goldman stands to profit by up to $2.1 million if the program exceeds a 10 percent drop. If the program does not reduce recidivism by at least 10 percent, the Bloomberg loan guarantee means Goldman will recoup some of its investment.