Goldman-funded plan serves 1,500 jailed NYC teens

Goldman-funded plan serves 1,500 jailed NYC teens

Goldman-funded plan serves 1,500 jailed NYC teens

About 1,500 incarcerated New York City teens have received behavioral therapy aimed at lowering their chances of returning to jail in the first year of a Goldman Sachs-funded program that's the first US effort to lure private investors to finance public social programs.

Nonprofit research group MDRC, the program's administrator, said today its met many of its first-year goals as it aims to counsel more than 9,000 youths over the next four years under a novel approach to social welfare, called a social impact bond: let companies foot the bill and profit if the program is a success.

Goldman Sachs stands to make a profit on its USD 9.6 million investment if MDRC's behavioural therapy program prevents enough 16-, 17- and 18-year-olds in the city's notorious Rikers Island jail complex from reoffending.

More than 3,100 adolescent inmates were admitted into Department of Correction custody on Rikers in 2010, the most recent year for which figures are available. The DOC says nearly half return within a year of being discharged.

If the recidivism rate declines by at least 10 percent, officials said, the project will be considered a success and the Department Of Correction will pay back the USD 9.6 million loan. Goldman stands to make a USD 2.4 million profit if an independent review of recidivism data finds the reoffending rate of the 1,500 young people in the first group declined more than 9 percent in the first year after their release. Goldman could make even more if they stay out of jail for a second year.

The program must also serve 9,240 participants within four years for Goldman to get paid. If rates don't fall low enough, the city won't make any payouts.

"It's important for people to understand what a huge undertaking this is," said Susan Gottesfeld, the associate executive director of The Osborne Association, one of the groups implementing the behavior therapy, called Adolescent Behavioral Learning Experience, or ABLE.

ABLE gives the young people Moral Reconation Therapy, a research-based 12-step curriculum that helps teens improve their thinking so that they make better choices in how they react to life's situations.