Social Impact Bonds and "Pay For Success" Programs
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Social Impact Bonds and "Pay For Success" Programs
Social Impact Bonds (SIBs) are a private financing mechanism used to fund social programs. Also termed 'Pay For Success,' SIB financing involves private entities funding projects aimed at improving social outcomes. If by the end of the project period, 'success' metrics are met (according to third-party evaluators), investors then profit by being paid interest on top of the reimbursed government funds for the cost of the project. This page includes a collection of updates and critical perspectives on these profit structures. For additional resources and related updates in education, visit EduResearcher at [Links to external site]
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The Promise and Realities of Pay for Success/Social Impact Bonds // Kenneth J. Saltman, Education Policy Analysis Archives


"This article considers proponents’ arguments for Pay for Success also known as Social Impact Bonds. Pay for Success allows banks to finance public services with potential profits tied to metrics. Pay for Success has received federal support through the Every Student Succeeds Act of 2016 and is predicted by 2020 to expand in the US to a trillion dollars. As school districts, cities, and states face debt and budget crises, Pay for Success has been advocated by philanthropists, corporate consulting firms, politicians, and investment banks on the grounds of improving accountability, cost savings, risk transfer, and market discipline. With its trailblazing history in neoliberal education, Chicago did an early experiment in Pay for Success. This article provides a conceptual analysis of the key underlying assumptions and ideologies of Pay for Success. It examines the claims of proponents and critics and sheds light on the financial and ideological motivations animating Pay for Success. The article contends that Pay for Success primarily financially benefits banks without providing the benefits that proponents promise. It concludes by considering Pay for Success in relation to broader structural economic considerations and the recent uses of public schooling to produce short-term profit for capitalists." 

Pay for Success; Social Impact Bonds; Chicago School Reform; Neoliberal Education; Corporate School Reform; Venture Philanthropy

For full text, click title above or here: PDF

Related Articles:

Saltman, K. (2007) Capitalizing on Disaster: Taking and Breaking Public Schools. New York: Routledge.


Saltman, K. (2012) The Failure of Corporate School Reform. New York: Routledge 2012.


Saltman, K. (2010) The Gift of Education: Public Education and Venture Philanthropy. New York: Palgrave Macmillan. 

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"Making Childhood Pay": Arthur Rolnick, Steven Rothschild, and ReadyNation 

"Making Childhood Pay": Arthur Rolnick, Steven Rothschild, and ReadyNation  | Social Impact Bonds and "Pay For Success" Programs |

"This post provides additional background on the ReadyNation Global Business Summit on Early Childhood Education that will take place at the Grand Hyatt hotel in New York City November 1-2, 2018. No U.S. educators or policy advocates may attend unless they come with at least four pre-approved business sponsors. Review the draft agenda here.

This is the second in a series. Read part one here."... 

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Six Ways (And Counting) That Big Data Systems Are Harming Society // The Conversation

Six Ways (And Counting) That Big Data Systems Are Harming Society // The Conversation | Social Impact Bonds and "Pay For Success" Programs |

By Joanna Redden

"There is growing consensus that with big data comes great opportunity, but also great risk.


But these risks are not getting enough political and public attention. One way to better appreciate the risks that come with our big data future is to consider how people are already being negatively affected by uses of it. At Cardiff University’s Data Justice Lab, we decided to record the harms that big data uses have already caused, pulling together concrete examples of harm that have been referenced in previous work so that we might gain a better big picture appreciation of where we are heading.


We did so in the hope that such a record will generate more debate and intervention from the public into the kind of big data society, and future we want. The following examples are a condensed version of our recently published Data Harm Record, a running record, to be updated as we learn about more cases.

1. Targeting based on vulnerability

With big data comes new ways to socially sort with increasing precision. By combining multiple forms of data sets, a lot can be learned. This has been called “algorithmic profiling” and raises concerns about how little people know about how their data is collected as they search, communicate, buy, visit sites, travel, and so on.


Much of this sorting goes under the radar, although the practices of data brokers have been getting attention. In her testimony to the US Congress, World Privacy Forum’s Pam Dixon reported finding data brokers selling lists of rape victims, addresses of domestic violence shelters, sufferers of genetic diseases, sufferers of addiction and more.

2. Misuse of personal information

Concerns have been raised about how credit card companies are using personal details like where someone shops or whether or not they have paid for marriage counselling to set rates and limits. One study details the case of a man who found his credit rating reduced because American Express determined that others who shopped where he shopped had a poor repayment history.


This event, in 2008, was an early big data example of “creditworthiness by association” and is linked to ongoing practices of determining value or trustworthiness by drawing on big data to make predictions about people.

3. Discrimination

As corporations, government bodies and others make use of big data, it is key to know that discrimination can and is happening – both unintentionally and intentionally. This can happen as algorithmically driven systems offer, deny or mediate access to services or opportunities to people differently.


Some are raising concerns about how new uses of big data may negatively influence people’s abilities get housing or insurance – or to access education or get a job. A 2017 investigation by ProPublica and Consumer Reports showed that minority neighbourhoods pay more for car insurance than white neighbourhoods with the same risk levels. ProPublica also shows how new prediction tools used in courtrooms for sentencing and bonds “are biased against blacks”. Others raise concerns about how big data processes make it easier to target particular groups and discriminate against them."...


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Childhood Captured: Pay for Success and Surveillance Pre-K Play Tables // Wrench In The Gears

Childhood Captured: Pay for Success and Surveillance Pre-K Play Tables // Wrench In The Gears | Social Impact Bonds and "Pay For Success" Programs |

"James Heckman and Robert Dugger, with support from philanthropies like the Pew Charitable Trusts and venture capitalists like JB Pritzker, have carefully honed a sales pitch for investment in early childhood education. After years of practice, it is now a well-oiled machine. The Heckman Equation promises high rates of return to investors willing to swallow the repugnant premise that through “evidence-based” programs, the character traits of at-risk toddlers will be “fixed.”...


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Susan Ochshorn Sends a Message to Billionaires: Little Children Are Not Investment Vehicles

Susan Ochshorn Sends a Message to Billionaires: Little Children Are Not Investment Vehicles | Social Impact Bonds and "Pay For Success" Programs |

By Diane Ravitch

"Susan Ochshorn founded ECE PolicyWorks to advocate for high-quality education for young children.

In this post, she analyzes the pernicious influence of financiers and hedge fund managers on decisions about the fate of young children, as they figure out how to make a profit with “Social impact bonds.”

Everyone loves the idea of early childhoood education. But unfortunately the financiers have figured out how to make it pay—for them.


Ochshorn shows how Goldman Sachs and other investors saw a path to profit and how public officials fell in love with metrics. The children? Not so much.

She gives the background of the social impact bond.


And she concludes that commodifying children is a very bad idea:


“By last summer, the U.S. Department of Education had gotten on board. Under the aegis of John King, former education commissioner of New York, they launched a Pay for Success grant competition, $2.8 million available for state, local, and tribal governments interested in exploring the investment vehicle’s feasibility. Early this year, as Betsy DeVos replaced King in the top job, the department distributed funding ranging from $300 to $400 million to 8 recipients. Rigorous evaluation, as the Urban Institute’s “Pay for Success Early Childhood Education Toolkit,” makes clear, is the sine qua non of the transaction, precise metrics and data collection essential for determining the venture’s outcome.


“To quantify is to have the illusion of mastery over all that defies our control, yet the metrics fall short, the ends perverted: they cannot capture children’s unique capacities, or the uneven trajectory of their development—as messy and challenging as it gets.


“Three- and four-year-olds are not commodities. They have had the grave misfortune of entering the academic arena in a period of measurement gone berserk. What young children need most is time, and sustained support for experiences that nourish their bodies, minds, and spirits—their due, according to the Convention on the Rights of the Child, which the U.S has not yet ratified more than 25 years after the resolution was adopted by the U.N. General Assembly."...


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How Tech Billionaires Hack Their Taxes With a Philanthropic Loophole // The New York Times

How Tech Billionaires Hack Their Taxes With a Philanthropic Loophole // The New York Times | Social Impact Bonds and "Pay For Success" Programs |

By David Gelles [New York Times]

"Late in 2014, Nicholas Woodman, the founder and chief executive of GoPro, announced what appeared to be an extraordinary act of generosity.


Mr. Woodman, then 39, had just taken his camera company public, and was suddenly worth about $3 billion. Now he was giving away much of that wealth — some $500 million worth of GoPro stock — to the Silicon Valley Community Foundation, an organization based in Mountain View, Calif., that would house the assets of the newly formed Jill and Nicholas Woodman Foundation.


“We wake up every morning grateful for the opportunities life has given us,” Mr. Woodman and his wife said in a statement at the time. “We hope to return the favor as best we can.”


The executive basked in prestige and gratitude. The Chronicle of Philanthropy named Mr. Woodman one of “America’s most generous donors” that year, placing him alongside established philanthropists like Bill and Melinda Gates and Michael R. Bloomberg.


But four years on, there is almost no trace of the Woodman Foundation, or that $500 million. The foundation has no website and has not listed its areas of focus, and it is not known what — if any — significant grants it has made to nonprofits. An extensive search of public records turned up just one beneficiary: the Bonny Doon Art, Wine and Brew Festival, a benefit for an elementary school in California.


Instead, the Woodman Foundation essentially exists as an account within the Silicon Valley Community Foundation, which is not required to disclose details about how, if at all, individual donors spend their charitable dollars. Mr. Woodman, GoPro and the Silicon Valley Community Foundation all declined to discuss the Woodman Foundation."... 


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Photo credit: Brian Britigan

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Jeff Bezos’ “Montessori, Inc.” Sets Up the EdTech Takeover of Pre-K 

Jeff Bezos’ “Montessori, Inc.” Sets Up the EdTech Takeover of Pre-K  | Social Impact Bonds and "Pay For Success" Programs |
By Alison McDowell (
"This week Jeff Bezos of Amazon announced plans to direct $2 billion, in part, to the creation of a “Day 1 Academies Fund,” which would underwrite the costs of full-scholarship “tier one” Montessori model preschools in low-income communities.

I spent much of this past summer researching the construction of a speculative social impact investment market dealing in pre-school children’s human capital data (herehereherehereherehere, and here).


Major players including University of Chicago economist James Heckman; hedge fund manager Robert Dugger; former Minneapolis Federal Reserve economist Arthur Rolnick; billionaire politician JB Pritzker; and Utah tech entrepreneur Jim Sorenson carried out this work quietly, diligently, steadily over the past decade.


The machine they’ve built is vast with tentacles reaching into influential foundations, institutions of higher education, venture capital firms, global banks, bipartisan political circles, and NGOs. It’s the puppet master behind all the Smart Start, Early Literacy, Grow Up Great, Grade Level Reading campaigns you see posted on buses and billboards in your town.


They use cute baby pictures in the advertising, but we need to recognize these efforts for what they truly are. This is about power, using digital technologies and predictive analytics, to mine rising global poverty rates for profit. Ever more vicious forms of innovative finance, like Social Impact Bonds and now impact securities, seek to transform human life into fictitious capital the elite can manipulate to enrich themselves. In this end game of late-stage capitalism, the data of vulnerable children will be collected and used as a source of profit extraction. Make no mistake. The Amazon “academies” will be data centers first and foremost.


The Bezos announcement indicates that perhaps this infrastructure is ready for prime time. Heckman and Pritzker have been doing road shows to sell it for years. I’m sure they’re anxious to see how the motor runs. Within moments of hearing the announcement I began poking around to see where the connections were. What immediately came up was that Jeff’s mother Jackie, who helps manage the Bezos Family Foundation, presented on the topic of preschool human capital investing with James Heckman at the Aspen Institute Festival in June 2017. The title of their talk was “The ROI (Return on Investment) That Matters.” You can be sure that if I’m sitting here at my kitchen table and know all of this, Bezos, his mom, and Heckman know far more.


People are increasingly concerned about the degree to which power and wealth are concentrated in the hands of the tech sector, Amazon in particular. They hear the stories about the terrible working conditions, the surveillance of labor via wearable technologies, that workers can’t afford shelter. The solution offered is a roving RV work model. While some have embraced Alexa as a virtual assistant, many others see it for the intrusive data-gathering device that it is. Now Amazon and its dynamic pricing model is moving into bricks and mortar retail through the purchase of Whole Foods. There is a growing sense we are being watched; that our value is data tied to where we go and what we buy; that our options for meaningful work are shrinking; and Bezos sees us as pawns to be managed for his benefit. Plus, those AWS (Amazon Web Server) data lakes!


My hope is people will realize this announcement isn’t just about Bezos or Amazon. It’s a sign the impact-investing, early childhood education machine is getting ready to roll. It is a mammoth, mammoth machine. Many will be scooped up in its net. Bezos is a great one to put out front. Many are already angry with him, so they throw up tweets expressing their dismay but they don’t look deeper. Some get that there is an aspect of data profiling, that it might also involve ed-tech promotion, but they are NOT talking about speculative global finance. Impact investing is not on anyone’s radar, but it should be. If you haven’t seen my videos on Social Impact Bonds or Blockchain Identity, check out the links here and here.


I’ve read widely and gotten pretty good at registering the signals of where things are headed. No one has shown me the plans for these Academies, but I can start to guess what they might look like. Join me for a tour of a fictional pre-school I’ll call “Montessori, Inc.” In the scenario that follows I lay out elements of a preschool model designed to serve the social impact investment market that Heckman and his partners have built. It includes links to examples already in operation in the real world. Will Bezos’s Academies follow such a model? Only time will tell.

Surveillance play tables are real. This is the world we live in now.

"Join us on the tour:

“A Company” is the venture partner backing “Montessori, Inc.”

“Montessori, Inc.’s” centers are found in the nation’s poorest communities, often in past-their-prime strip shopping centers near the highway. Picture the pop-up charter schools all over Florida. Link


“A Company” cultivates women of color to become franchise operators of “Montessori, Inc.” and touts its status as a MBE, WBE enterprise. Link and Link


Once on board, franchise managers are expected to toe “Montessori, Inc.’s” line (which is actually “A Company’s” line) and follow all company procedures, especially regarding expansive data collection and family compliance policies.


The teaching staff is low income. Most juggle several gigs to get by.


They are expected to keep up with the latest micro-credentials and take online training classes they can’t afford to stay eligible to teach. Link


Fees are automatically docked from their meager salary. Link

Each staff member’s engagement with online coursework is tracked biometrically, the data uploaded to their employee profile. Link


“Montessori, Inc.” maintains extended hours of operation, but algorithms set irregular shifts ensuring most workers don’t get enough hours to access benefits. Link


While a “Montessori, Inc.” preschool education is offered free of charge, not everyone who is eligible will be able to enroll. “A Company” outsources their review process to “Progress Pathways” to make sure each family is a “good fit” for the program. Link

Preschool operations are funded using innovative finance mechanisms structured around outcomes-based contracts. For schools to meet their agreed-upon “success” target, franchise operators must carefully curate whom they admit into the program. Because “Montessori, Inc.” is not a public preschool, they can do that. Link


One part of the evaluation is the LENA screening. Each child must wear a vest with a recording device for a full day. Data is analyzed to predict if the child is likely to fall into a “word gap,” meaning they are not spoken to enough at home, which could impact their literacy levels. A low LENA score can be a disqualifier. Link

If accepted, parents must then agree to give “A Company” ownership of all the data collected on their child and the family through school-affiliated apps while the child is enrolled in the program. Data collected informs dynamic pricing for goods and services purchased at any of “A Company’s” affiliates. Of course the goal of the company is to help families make “good decisions.” Nudge pricing is part of that strategy. Link


Each student enrolled at “Montessori, Inc.” is assigned a digital identity on Blockchain. All of their data and credit goes into the e-wallet. Link and Link


If a family relocates, they take their child’s accumulated data with them to another center. “A Company” promotes this as a means by which poor children “build social capital” from an early age. Link

Parents are expected to volunteer twice a week, and participation is tracked on an app. Their time, valued at less that $5 per hour, is compensated not in cash but in points redeemable in “A Company” credit. Link


They’re also expected to participate in “Montessori, Inc.’s” “smart family tips” text-messaging platforms. If they don’t document that they completed the required number of suggested educational home-based activities or respond promptly to text messages, their children can be bumped from the program. Link and Link

Upon enrollment, each family is issued a device programmed with behavior-tracking games geared to early literacy development and executive function training. Toddlers need to continue to level up on their custom development trajectory or risk be bumped from the program. Link and Link


Families must keep their child’s device charged and in working condition and send it to school each day. This “Montessori Minder” device is a key element of the self-directed curriculum offered by the school. Each child is given a personalized playlist of activities for the day, which they work through at their own pace. They submit evidence of tasks completed to the online student portfolio platform. Link and Link


Access to each center is authorized through biometric scans at the front door. Link


Attendance is generally used as one of the impact investing metrics, so that is taken on an app to ensure that data is high quality. Link


The “smart” classrooms are minimally furnished. All furniture and physical items come with embedded beacons that track students throughout the day. Link


All the children and staff wear slippers with Internet of Things (IoT) sensors embedded in the soles that track their interactions with one another and with physical objects in the space. Link


The centerpiece of each pre-school is their WePlaySuperSmart table. While toddlers interact collaboratively with screen-based activities on the digital table, a video camera captures their interactions. AI is then use to analyze the video and complete behavioral rubrics in a dashboard outlining where they are within the “Big Five” traits OCEAN (Openness, Conscientiousness, Extraversion, Agreeableness, Neuroticism). Link and Link


Other activities during the day measure behavioral elements like grit, resilience and executive function. Some sites are piloting EEG brainwave headbands. Link and Link


With the play tracker app, each child gets a haptic buzz when it’s time to go outdoors and play on the smart equipment. The app tracks their fitness goals against online games tied to literacy progression and non-cognitive skill development. The program investors love that Play Tracker keep every child moving on their development pathway. Link and Link


For schools with limited access to outdoor space “A Company” provides access to indoor augmented reality play systems (that have the added advantage of increased data capture). Link and Link


Parents can monitor classes via remote cameras, and real time data is uploaded to each student’s dashboard throughout the day.

Students are expected to be goal-oriented, motivated, and self-reflective while at school. Student agency is highly valued by “A Company” and the games on “Montessori Minder” are calibrated to push each child towards that goal. Link


By the end of their time at “Montessori, Inc.” each student will have a high-resolution picture in data of where they fit into the human capital pipeline of the gig economy.


“’A Company” is proud to be able to make that happen and ensure no toddler is left behind."


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Incentivizing Pre-K Online Gaming With Digital Sticker Books and Pornography (For The Adults, Says Heckman) // Wrench In The Gears

Incentivizing Pre-K Online Gaming With Digital Sticker Books and Pornography (For The Adults, Says Heckman) // Wrench In The Gears | Social Impact Bonds and "Pay For Success" Programs |

By Alison McDowell
"This is another post with clips culled from talks given at the Center for the Economics of Human Development’s working groupMeasuring and Assessing Skills: Real Time Measurement of Cognition, Personality and Behavior. It was held at the University of Chicago in February 2018. I previously shared a segment called from “Math to Marksmanship” with Nobel Prize economist James HeckmanGregory Chung of UCLA-CRESST and Jeremy Roberts consultant to PBS Kids.


Below are ten additional excerpts from that talk. I watched all two hours and pulled highlights, so you don’t have to.  Topics covered include: game-based learning for pre-schoolers; how to get pre-readers to create online accounts; how digital games can be used to identify “Big Five” behavior traits; and a real doozy, Dr. Heckman’s half-joking suggestion that gamification and incentives of pornography for adults could encourage parents to have their children use online games more often. No, really.


Below is a relationship map of the organizations mentioned in the presentation. You can access an interactive version here.


PBS Kids is a media content provider for children ages 2 to 8 years old. Nearly 65% of all children in that age range interact with PBS Kids’ content at some point during any given month. Their apps have been downloaded 45.5 million times, and they deliver 276 million streams per month across multiple digital platforms. Their key strategy is to try to be wherever the kids already are: desktop, television, mobile, and classroom (whiteboards/chromebooks)."...


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Education in the Cloud: Blockchain and "The Ledger" // 

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Death, Corruption, and Cover-Up in For-Profit Foster Care, and Why Education Activists Must Confront Them // Emily Talmage

Death, Corruption, and Cover-Up in For-Profit Foster Care, and Why Education Activists Must Confront Them // Emily Talmage | Social Impact Bonds and "Pay For Success" Programs |

"BuzzFeed News has reported the results of a Congressional Investigation, which was prompted by their own report of corruption and coverup in the deaths of foster children.


In their groundbreaking  2015 report,  reporters Aram Roston and Jeremy Singer-Vine investigated widespread cases of physical and sexual abuse –  including multiple deaths of healthy children – which took place in foster homes that were part of a 36-state for-profit foster care organization known as the Mentor Network. 


The report featured former Mentor caseworkers who accused the company of failing children because of its focus on extracting a profit from them – by cutting corners on expensive services, for example, or forcing social workers to carry extremely high caseloads.

“I went there because I care about services for kids,” said one caseworker. “I eventually became a machine that cared about profits. I didn’t care about kids.”

A Business Plan From Hell

The Senate investigation didn’t pursue the Mentor Network’s business associations, outside of interviewing current officers. Our own investigation found that a key architect of the profit-mining expansion has since moved on from Mentor to develop the model in several powerful organizations, adapting it to everything from juvenile recidivism to public education.


Tripp Jones has now opened his own shadowy company (called 21c) that specializes in developing the type of public-private partnerships that allowed the Mentor Network to flourish financially.

He reveals in his bio that he served as a leading member of Mentor’s executive team for eight years:


“He and his colleagues worked with their private equity sponsors to successfully complete 45 acquisitions in order to scale and diversify MENTOR’s services from $250 million in revenue operating in 13 states to $1.1 billion in revenue in 38 states with 25,000 employees. While at MENTOR, Tripp Jones focused largely on building the systems to enable the company to manage explosive growth, extensive service-line expansion, complex integration of operations.”


From there, Jones went on to serve as co-managing director at a company called New Profit, where he helped build a “social finance advisory firm” called Third Sector Capital Partners.

Jones and other perpetrators of this giant for-profit foster care firm are sheltered by powerful corporate cartels, which are making new demands for public-private profit opportunities. Jones sits on the boards of MassINC., New Profit, Time and LearningThird Sector Capital Partners, MA Juvenile Justice PFS Initiative, and the Building on What Works Coalition.


And this is where education activists need to pay attention.

Edweek reports that the Gates Foundation and the Zuckerberg-Chan initiative have jointly funded a $12 million initiative to support new ways of tailoring classroom instruction to individual students.


The recipient of their grant is none other than New Profit.

New Profit and Third Sector Capital, both major proponents of the controversial and highly unethical “Pay for Success” model of public financing, are now closely linked with powerful education organizations and lobbyists:


In 2014, New Profit – along with the Chan-Zuckerberg Initiative – sponsored a series of meetings with a group called Convergence, in which major education policy-players – including the presidents of both major teacher’s unions – developed what they dubbed a “Transformational Vision of Education” – a “vision” that is little more than a call to transform public education to a data-mining industry that will allow for-profit companies, much like Mentor, to profit off the backs of children.


The Intercept published its own report of the Congressional hearings, which fails to link the actual congressional report, or the new Buzzfeed coverage.  Damage-control may be a more accurate term than report, in fact, because it also fails to even mention the resulting legislation‘‘Child Welfare Over-sight and Accountability Act of 2017.’’


In an particularly Orwellian twist, the Intercept article recommends a bill put forward last year which would put federal family assistance programs and foster assistance together into one program, stipulating that only prevention services classified as “promising,” “supported,” or “well-supported,” based on an evidence structure developed by the California Evidence-Based Clearinghouse, would be eligible for reimbursement.


That same California Evidence-Based Clearing House has given its endorsement to the Mentor Network’s own proprietary “evidence-based Family Centered Treatment® program.”

FCT© can target children and families in community settings (like “Community Schools”) for its therapeutic intervention, and then designate its own for-profit foster home network as a successful planned placement from their therapy. 


With that system, Mentor was able to claim 89% success in meeting “permanency goals” during the whole horror show described in the Congressional report.


The Mentor Network operates under a corporate name of Civitas Solutions.  Intercept reported that Civitas’ publicly traded stock dropped suddenly when the Congressional Report was released, then rebounded in a couple of days as it became clear there would be no coverage or follow-up.

Media outlets like the Intercept (but not BuzzFeed)  limit their coverage to this one firm, rather than demanding an investigation of the public-private structures and their architects (like  FCT© and Tripp Jones ) that allow organizations like Mentor to profit off the backs of our most vulnerable populations.

Sadly, this should surprise no one.


The Intercept receives most of its funding from the Omidyar Network, which is deeply linked to the development of the very same pay-for-success schemes that Tripp Jones is building.   Omidyar invested one million dollars in New Profit back in 2000 – and has remained linked to them through many channels.


These groups are now busy turning our public education system into one that can be profit-mined as thoroughly as the foster care system.


And so it is up to us, parents and other engaged citizens, to spread the word about what is happening to children, and to make it stop."


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Blockchain: Chock Full of Problems for Medical Data Privacy // Jessica Berger, MLIS, CIPM

Blockchain: Chock Full of Problems for Medical Data Privacy // Jessica Berger, MLIS, CIPM | Social Impact Bonds and "Pay For Success" Programs |

By Jessica Berger

"Readers are invited to challenge my position.  This technology is in its nascence and more is yet to come….


Blockchain undermines The Fair Information Practices Principle of Participation

Computer based patient records have already caused millions of innocent patients’ private medical details to be breached and exploited.  These records should by right have remained offline.  Currently, I believe that it is a serious mistake for the health care field to adopt blockchain technology as a storage and transmission modality for patient information.  Existence of information in perpetuity on a Blockchain obliterates the protections inherent in the Fair Information Practices Principle of Participation.   The Fair Information Practices Principle of Participation states that an individual should “be able to challenge data relating to him and, if the challenge is successful, to have the data erased, rectified, completed or amended” (IAPP, 2018).


When wrongly diagnosed with a medical condition that might stigmatize an individual, the widely distributed nature of Blockchain storage renders it extremely difficult if not impossible to erase erroneous and potentially damaging information.  In the case of private and sensitive medical information in general, the place for this information is with the doctor or nurse alone.  For all the good it has done, HIPAA has failed to prevent the data breaches of 229,659,140 medical records (Privacy Rights Clearinghouse, 2018).  No amount of security engineering will be sufficient to prevent more data breaches of computerized patient records stored on Blockchain.  The world-wide-web was created to share information.  It is by its very nature unsuitable for storing confidential patient information.


For medical information that will be widely distributed, even if this distribution occurs in a private Blockchain, that format is still prone to hacking.   If revealed to prejudiced potential employers or other entities, this could affect a person’s ability to earn a living, establishing a framework for the commitment of egregious wrongs that are inarguably intolerable to individuals.  For example, if someone receives a false positive diagnosis of a serious communicable disease, this can be ruinous if the information is breached. 


Blockchain contradicts the foundational concept of Information Life Cycle Management

Information Life Cycle Management facilitates organizations’ ability to comply with laws and industry regulations regarding the disposition of personal data.  Compliance with these regulations supplies numerous benefits, including but not limited to the security of information about individuals. “ILM is a policy-based approach to managing the flow of information through a life cycle from creation to final disposition” (IAPP, 2018).  Where information is stored on a blockchain, the disposition of that information becomes impossible even when the information contained in those records is erroneous.  Since blockchains can be hacked, and since they are widely distributed, personal information that should have been destroyed (but which could not be destroyed because of the very nature of a blockchain) becomes linked to numerous entities, exposing that information to breaches and the person to whom it is connected. 


The lack of boundaries within this schema is also reason for concern with regards to confidential information.  Despite robust encryption and other security measures, we have witnessed the proliferation of data breaches that would never occur if the information was simply collected by the one entity that needs it and stored in one locked cabinet, or on an offline hard drive.  The notion that your personal information exists to be exploited has been widely adopted as a foundational credo of modern marketing, but its popularity does not render it ethical or right.


Blockchain prevents the Fair Information Practice Principle of Openness

When people’s personal information is entered into a system and they are not informed that it will become part of a blockchain, this runs counter to the Fair Information Practice Principle of Openness which states that “that there should be a general policy of openness about developments, practices and policies with respect to personal data.  Means should be readily available to establish the existence and nature of personal data, and the main purposes of their use, as well as the identity and usual residence of the data controller” (IAPP, 2018). Given that the data will reside with myriad entities, it is not possible to inform users of where their personal data will reside, even if they are informed up front about the fact that their data will be stored on a blockchain.  While some people may not care about their medical privacy, others may avoid seeking care altogether rather than risk their confidential health information being pushed through the torrent to numerous strangers.  Yes, there are safeguards, but history tells us that these are likely to be dismantled.


With Blockchain, Consent and Choice Rights Are Denied to Patients

A Privacy Impact Assessment evaluates numerous factors in a system that collects PII, including the presence of “consent and choice rights for data subjects and whether the system is designed with information lifecycle principles in mind” (IAPP, 2018).  It is unclear how storage of private information distributed across numerous entities in a blockchain allows a patient to have a choice about where their most personal data will be stored and shared and at the moment, it does not seem possible to delete the data once it is input into the blockchain.  This nullifies a key feature of the information lifecycle.


“”For me, it should be very clear that it’s the user, using a service, who should be the one deciding, if how and for what purpose his data are processed,” Sippel said.”  This reason alone is enough to nullify the idea of adopting blockchain technology as a modality for medical information storage.

It goes back to the most fundamental credo:

Just because a technology exist does not mean we should use it. 

The nuclear bomb exists, but we should not use it.


The blockchain exists, but we should not use it to store any sensitive information, especially medical information.



Carson, A. (2018). Sippel’s appeal to privacy pros: Help me maintain human dignity.  The Privacy Advisor. IAPP. Retrieved from


Privacy Rights Clearinghouse. (2018). Data breaches. Retrieved from



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AIDTech and PharmAccess Deliver World's First Blockchain Baby // PYMNTS

AIDTech and PharmAccess Deliver World's First Blockchain Baby // PYMNTS | Social Impact Bonds and "Pay For Success" Programs |


"The first baby born on the blockchain is expected to enter the world at a small clinic in rural Tanzania this week.

What does that mean – to be born on the blockchain? Has the world finally gone too far with its distributed ledger obsession? Just the opposite, Niall Dennehy, COO of AID:Tech would argue – more like it’s finally found a use case that is more practical and more noble than cryptocurrencies.

That use case, said Dennehy, is to guide Tanzanian mothers through their pregnancies and establish digital identities for their babies at birth, which he says will make it easier for those mothers and children to receive aid from governments and non-profits throughout their lives.

AID:Tech uses digital identity and blockchain tech to create a new, more transparent way for governments, enterprises and NGOs to deliver digital entitlements. It has teamed up with PharmAccess Foundation, a group focused on improving healthcare access throughout Africa, to devise this creative new use of distributed ledgers.

In a recent interview with Karen Webster, Dennehy explained how AID:Tech and PharmAccess Foundation came together to innovate this humanitarian application for blockchain tech, what benefits the organizations believe they can deliver and why they say blockchain was the right tool for the job.


From lack of healthcare funding to high child and maternal mortality rates, the Tanzanian healthcare system presents quite a few substantial challenges when it comes to caring for mothers and babies. One of them is the difficulty of getting funds from well-meaning donors to end recipients.


Even when charitable organizations try to step in and offer aid, those funds don’t always get to their intended destination. Dennehy said that’s how AID:Tech got started: Monitoring how aid is delivered to eliminate the corruption that exists around cash delivery.


A distributed, immutable ledger creates transparency to ensure that donations and government services and remittances, such as welfare, go where they are needed instead of into sticky pockets.


“We use blockchain,” Dennehy said, “but at heart, we’re a data logistics company, ensuring that something gets from Point A to Point B.”


Blockchain Babies

Dennehy said the greatest potential for blockchain in this setting is with the unborn: two billion people lack a form of legal identity, and the world’s population is only growing. Assigning people an identity at birth could help trace services and aid to ensure they’re received by the people who need them.


If people can be assigned an identity at birth – with, of course, the mother holding control of the data until the child comes of age – then Dennehy said the person’s identity can become an aggregator of data for welfare, aid remittances and donations, eliminating the fraud that can be all too common in the no-man’s-land between well-meaning donors and end recipients.


The aggregator facet is a key part of what Dennehy said AID:Tech and PharmAccess are trying to do. He said a blockchain identity alone doesn’t do people any good; it’s tying it to necessary services that will create value as these blockchain babies come of age.


Healthy Moms

As for the mothers, said Dennehy, using blockchain to track their healthcare activity throughout the pregnancy and after birth can help ensure a healthy process and delivery, reducing the potential of either the mother or the baby dying in childbirth.


Today, women receive a paper booklet upon learning they’re pregnant, and each time they go in for prenatal care, the doctor or midwife writes down data from the visit in the booklet. That booklet is later sent to a processing center where it is manually entered – but that doesn’t happen until three months after the child is delivered, and since it’s entered manually, the data is error-prone.


Logging that information on the blockchain instead, said Dennehy, enables healthcare providers to incentivize healthy, proactive pregnancy behaviors. For instance, if a patient shows up for all her appointments, she may receive a digital asset representing an umbrella, which she can present at a shop to receive the umbrella.

Incentivizing healthcare at this critical time in a woman’s life gets her through the door, said Dennehy, which generates data – and presenting that data back to the woman empowers her to make better decisions around her own (and her baby’s) health.



When Mastercard came up with a way to track medication compliance for Hepatitis C patients in countries with limited resources, it leveraged its card rails and underlying infrastructure for rewards points to track healthcare activity and to incentivize patients to receive the care they needed.


Patients who took all of their medication as directed could be completely cured, but many were not compliant with their treatment plans, so they remained sick. So, figured Mastercard, if it could use a loyalty/rewards structure to incentivize patients to take better care of themselves and follow their doctors’ instructions, more people could be cured."...


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"The Invisible Heart" Theatrical Release 

"What happens when capitalism and charity intersect? From Wall Street to life on the street, The Invisible Heart tracks the birth of one of the fastest growing social innovations in modern history: social impact bonds. An unorthodox marriage between government services and private-sector investments, this burgeoning financial model promises to solve society’s most complex problems, from crime to homelessness—but is it delivering? Set in Canada, the U.S. and the U.K, this compelling documentary follows the unlikely people banding together to battle social inequality." 

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Social Impact Bonds: Overview and Considerations 

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Comparing Four ‘Social Impact Bond’ Projects // San Francisco Public Press

Comparing Four ‘Social Impact Bond’ Projects // San Francisco Public Press | Social Impact Bonds and "Pay For Success" Programs | 

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Social Impact Bonds - A Primer // Seattle Education Blog

Social Impact Bonds - A Primer // Seattle Education Blog | Social Impact Bonds and "Pay For Success" Programs | 

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"Calculating Social-Impact Bonds: Making Early Education Pay Off?" //

"Calculating Social-Impact Bonds: Making Early Education Pay Off?" // | Social Impact Bonds and "Pay For Success" Programs |

"Social impact bonds, also known as a pay-for-success loans, are loans that seek to achieve a positive social outcome, and reduce future costs by investing in prevention and intervention programs in the public sector.

This fall, Goldman Sachs and the investor J.B. Pritzker will put $1 million toward expanding a Utah school district's early-childhood program by 450-600 students through a social-impact bond. The idea is that students who go through the program are less likely to need expensive special-education services later in their academic careers. If successful, the venture would be the first investment of this kind to finance a public school program, according to officials.


Pupils are tested at the beginning of the program to identify which ones are likely to need special education in the future. For every child that fits this description—but later scores at grade level—a savings equal to the avoided costs is recorded and paid back to the investors. Students who complete the preschool program are tested annually to calculate avoided costs. If and when the loan is paid off, additional money saved is divided between the district and investors, up until the point that students complete 6th grade."...


Reporter: Sean Meehan | Editor: Sean Cavanagh | Design & Programming: Chienyi Cheri Hung


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"25 Impact Opportunities in U.S. K-12 Education" 

To download, click on the title or arrow above.

Note. Re-sharing this document does not indicate endorsement. 


The final page of this report cites the following: "The hosts of the Global Education Futures Forum, Reengineering Futures is a Russian think tank that developed a 20-year roadmap of 16 trends shaping global learning."  The following are the websites referenced for context about where authors of the report apparently view the future of education to be headed: and 


For an explanation of social impact bonds, see: 

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Digital Colonialism: South Africa Puts Preschoolers on the Blockchain 

Digital Colonialism: South Africa Puts Preschoolers on the Blockchain  | Social Impact Bonds and "Pay For Success" Programs |

From WrenchInTheGears blog
"With the debut of their Blockchain transcript, Southern New Hampshire University’s “College for America” and Learning Machine are in the vanguard of innovative digital credentialing for adults. At the other end of the “lifelong learning” spectrum, Trustlab’s IXO Foundation has staked out the early childhood space with a Blockchain DApp called Amply. Amply, an online attendance-taking system designed to track “impact,” is being piloted through SmartStart, a South Africa pre-school franchise.

This proof of concept, financed in part through UNICEF’s innovation venture capital fund, had registered over 3,100 students across 85 centers as of spring 2018. Innovation Edge, a South Africa based social impact investment portfolio manager specializing in ed-tech, IoT health, and early childhood education, is another Amply funder. Remember Ready Nation’s Global Business Summit on Early Childhood? The one coming up in New York this November that I blogged about here? The one where early childhood educators and policy advocates were specifically EXCLUDED unless they came with a vetted group of four business people? Well, Cynthia McCaffrey, director of UNICEF’s office of global innovation will be speaking at that event, and Innovation Edge is listed as a sponsor.


While at first glance Amply may look like many other smartphone apps, there’s a lot going on beneath the surface. In South Africa the government reimburses preschool providers based on the number of children attending school each day. With Amply, providers take attendance digitally rather than on paper."...


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Blockchain, Self-Sovereign Identity, and the Selling Off of Humanity //

Blockchain, Self-Sovereign Identity, and the Selling Off of Humanity // | Social Impact Bonds and "Pay For Success" Programs |

By Alison McDowell

"It’s time activists began to develop a working knowledge of Blockchain and self-sovereign digital identity, because these are the mechanisms that will drive the transition to IoT monitoring for the purposes of Pay for Success deal evaluation. I created a slide share about Blockchain as part of a “Smart Cities” post I wrote last year, which can be accessed here if it helps to have visuals.


The technology became public in 2008 when Santoshi Nakamoto published the whitepaper “Bitcoin: A Peer to Peer Electronic Cash System.” No one knows who Nakamoto actually is. Over the past decade Bitcoin digital currency has generated significant buzz, yet many believe Blockchain will be even more transformative, as big as or bigger than the rise of the Internet.


MIT is heavily involved in Blockchain research and development through its Digital Currency Initiative, housed within the MIT Media Lab. The program is led by Neha Nerula, formerly of Google who holds a PhD from MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL). Nerula served on the World Economic Forum’s Global Future Council on Blockchain from 2016-2017. Its faculty advisor, Simon Johnson, co-founded the Sloan School’s Global Entrepreneurship Lab and worked as chief economist for the International Monetary fund.


In an April 2018 article, “In Blockchain We Trust,” Michael Casey, global economics professor, goes into detail regarding the use of Blockchain to create “value” in virtual worlds by securing ownership of digital assets. As we kill off the planet and begin spending more and more time in online environments, there’s cold comfort knowing the forces of global monopoly capital are rapidly colonizing digital worlds, too.


Blockchain is the structure that underpins crypto-currencies like Bitcoin, but it’s much more than that. In its simplest terms, it’s a ledger that keeps track of transactions, all kinds of transactions that may or may not have a financial component. Unlike a dusty accounting ledger or its modern equivalent, something like Quick Books, data stored on Blockchain is distributed. This means multiple exact copies of the same encrypted data live on peer-to-peer networked computers, which supposedly makes it more secure. If one node goes down the information is not lost. It is portrayed as the ultimate “permanent record.”


Data stored on Blockchain is “verified” by computers that use a consensus process, competing to solve cryptographic puzzles in exchange for Bitcoin payments. This cryptographic authentication injects “trust” into transactions, enabling security without the need of a third party to ensure everyone is on the up and up. Once data is locked into Blockchain, promoters of the technology say it is immutable, unchangeable. Although, as with everything coded, there are still vulnerabilities and hacks as discussed in this MIT Technology Review article “How secure is blockchain really?”


It may be some indication of the level of actual “trust” developers have in blockchain that the Chamber of Digital Commerce and Coin Center created the Blockchain Alliance in the fall of 2015 to “pro-actively engage” with regulatory and law enforcement agencies. In the United States, government partners include: DEA, DHS, DOJ, FBI, US Marshal Service, US Secret Service, ICE/HSI, CBP, IRS-Criminal Investigation, FDA, US Postal Inspection, Commidity and Futures Trading Commission, SEC, FTC, FDIC, as well Attorney General’s Offices in California, Texas, New York, and Ulster County. Seems they have some rather powerful partners.

Some Blockchains are public, others are private. Data stored on private chains can be made accessible using a combination of matched public and private “keys.” A public key is used to verify and encrypt data. It is public and can be known by anyone. A private key decrypts data that has been encrypted with its paired public key. These keys consist of extremely long sets of characters, which can be shortened to a public key fingerprint or associated with biometric information via a biocryptic process.


Digital currency payments validated with biometric information like iris scans have been prototyped using refugee populations over the past few years (see the featured image). While the technology that undergirds it is complex, programmers are developing accessible interfaces that make using digital currency as easy as opening an app and verifying a transaction, financial or otherwise, with a thumbprint or facial-recognition scan.


Beyond their capacity to hold tokenized digital currencies, e-wallets are being used to hold all sorts of other information. They are touted as an effective means to manage the continuous flows of activity, money, and data that surround us. In the fall of 2016, the state of Illinois; home to many Pay for Success players including: James Heckman, JB Pritzker, Rahm Emmanuel, the MacArthur Foundation, and the Chicago Mercantile Exchange (trading financial and commodity derivatives), charged a Blockchain Taskforce with examining ways to use the technology to promote economic development in the state and “improve record keeping.” Their final report, issued in January, is available here.


Below is a map of the players involved. Click here for the interactive version.


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Blockchain: Life on the Ledger // Wrench In The Gears Blog

By Alison McDowell
"I created this video as a follow up to the one I prepared last year on Social Impact Bonds. It is time to examine the ways in which Blockchain could interface with social impact investing to further concentrate power and wealth and exacerbate long-standing forms of global oppression under the guise of philanthropy. This narrative flips the prevailing sales pitch for Blockchain on its head and offers a strong critique of a technology many consider a powerful disruptive force.

With decentralized identity, we are cuing up permanent records for the masses with potentially disastrous consequences. Is it prudent to place our "trust" in a technology of unknown origin? No one knows who or what Santoshi Nakamoto actually is and whose interests this invention advances. Why would we be so naive as to remake the world's social and economic structures around this code? What would it mean to live life on a ledger?"...


See original blogpost here:


And for a slidedeck with written narration of the above video, see:  


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Ocean Protocol: A Decentralized Data Exchange Protocol to Unlock Data for AI 

Ocean Protocol: A Decentralized Data Exchange Protocol to Unlock Data for AI  | Social Impact Bonds and "Pay For Success" Programs |

"What is Ocean Protocol?
Ocean Protocol is an ecosystem for sharing data and associated services. It provides a tokenized service layer that exposes data, storage, compute and algorithms for consumption with a set of deterministic proofs on availability and integrity that serve as verifiable service agreements. There is staking on services to signal quality, reputation and ward against Sybil Attacks.

Ocean helps to unlock data, particularly for AI. It is designed for scale and uses blockchain technology that allows data to be shared and sold in a safe, secure and transparent manner.


How Ocean Protocol Works

The Ocean Protocol is an ecosystem composed of data assets and services, where assets are represented by data and algorithms, and services are represented by integration, processing and persistence mechanisms. Ocean Protocol facilitates discovery by storing and promoting metadata, linking assets and services, and provides a licensing framework that has toolsets for pricing."...


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When “What Works” Harms Students: Why Stopping Summit Learning Isn’t Enough 

When “What Works” Harms Students: Why Stopping Summit Learning Isn’t Enough  | Social Impact Bonds and "Pay For Success" Programs |

"On December 11, 2018 the National Education Policy Center’s e-newsletter confronted the growing backlash against “personalized learning” in general and Mark Zuckerberg’s Summit Learning in particular. 

Unfortunately, instead of fundamentally opposing the corporate hostile takeover of schools through digital media and learning, they fell back on four data-friendly policy recommendations drawn from Dr. Noel Enyedy’s 2014 brief, which are summarized here:

'1) technology investments should not overstep research

2) software developers, researchers, and teachers should partner to determine “what works”

3) dedicate resources to professional development, and

4) be open to new models of technology integration in classrooms'

Recent developments around ed-tech and social impact investing make it clear that these recommendations could in fact lead to increased datafication of students, especially in light of the passage of Pay for Success legislation embedded in the Every Student Succeeds Act. This post is written as a response to Dr. Enyedy’s recommendations. It also provides additional context around student data privacy concerns and the importance of understanding opposition to online education as a global struggle."...


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Fennie Wang, IXO Foundation: "Tokenizing Social Impact on the Blockchain" // Future Podcast 

Fennie Wang, IXO Foundation: "Tokenizing Social Impact on the Blockchain" // Future Podcast  | Social Impact Bonds and "Pay For Success" Programs |

"The ixo Foundation is filling a vital need in the realm of sustainable development and social impact projects around the world by providing a blockchain-based protocol that allows for the evaluation and measurement of social impact while requiring accountability and transparency from service providers.

Backed by UNICEF, ixo is in the midst of a pilot project in South Africa that is digitizing and providing proof of preschool attendance records, which is allowing the preschool to receive subsidies from the Western Cape Government.

As it stands, evaluation costs eat up 5-7% of a project’s budget. In addition, the data that results are often inaccurate, untrustworthy or simply presented in an unusable format. The ixo Foundation is changing all of this. But that’s not all: the ixo protocol allows for private investors to receive a return on capital if pre-agreed outcomes are met for a project.

“Once you have the data of where the money is going… you can turn that into its own kind of crypto asset that these projects can trade…and that’s where we think crypto and blockchain can contribute a lot towards opening up capital markets for social finance,” says Wang." 

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What are Blockchain's Issues and Limitations? // Coindesk

What are Blockchain's Issues and Limitations? // Coindesk | Social Impact Bonds and "Pay For Success" Programs | 

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Social Impact Bonds: Promises and Pitfalls Summary Report // OECD LEED Expert Seminar in Cooperation with the NetFWD 

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