Capital is one of the biggest hurdles
By Greg Keesling
Addressing societal issues is both a moral and fiscal imperative for our country. High recidivism rates, low educational attainment, and high incidents of preventable diseases are just a few of the harmful and costly issues communities face nationwide. Though governments bear the brunt of these problems by having to allocate an ever-increasing share of taxpayer funds for remediation, businesses increasingly feel the effects.
By Greg Keesling
Addressing societal issues is both a moral and fiscal imperative for our country. High recidivism rates, low educational attainment, and high incidents of preventable diseases are just a few of the harmful and costly issues communities face nationwide. Though governments bear the brunt of these problems by having to allocate an ever-increasing share of taxpayer funds for remediation, businesses increasingly feel the effects.
Areas
with high levels of crime or an undertrained or unhealthy workforce are
unattractive places to conduct business. When public sector resources are
stretched thinner and thinner, the fiscal burden is often passed along to
business owners in the form of tax increases.
It's worth noting that while
governments are usually responsible for remedying the harmful effects of
societal issues, it is the private sector that often has the dynamism and
dexterity needed to address their root causes.
Our
nonprofit, RecycleForce, is a social enterprise providing life-changing
employment and workforce training to formerly incarcerated individuals by
offering some of the most comprehensive and innovative recycling services in
Indiana.
We are pleased that our recycling provides much of our nonprofits
revenue each year, but because our model is heavy on training and counseling
costs, the revenue from the recycling operation does not cover all of our
costs.
Every year presents a new challenge to identify and cobble together
various grants, government contracts and philanthropic support to fill that
funding gap and advance our mission. Every minute that we spend seeking
additional funds is a minute we are not serving our employees and our
community.
One
especially exciting idea to address the way we, as a society, respond to these
problems is the creation of social impact bonds (SIBs). SIBs are innovative,
results-focused financial instruments that create public-private partnerships
to address some of our nation's most intractable and pressing social
challenges. SIBs present an opportunity for governments to address root causes
of societal issues by scaling up preventative social and public health
interventions.
Under
a traditional SIB structure, private investors provide operating capital to
social service providers with the proven capacity to achieve measurable
improvements in costly social problems, such as high rates of recidivism, or
chronic homelessness. Only when the targeted improvements are achieved does the
government repay the project's initial investors, plus a rate of return.
Rep.
Todd Young, a Republican from my home state of Indiana, has teamed up with Rep.
John Delaney, a Democrat from Maryland, to reintroduce the Social Impact
Partnerships Act (H.R. 1336) in Congress.
Meanwhile Sen. Orrin Hatch (Utah),
the Republican Chairman of the Senate Finance Committee, and Democratic Sen.
Michael Bennet of Colorado have introduced companion legislation in the Senate
(S. 1089). This bill would provide the Federal government with $300 million to
support social impact project proposals from State and local governments
throughout the country.
Shifting
the focus from inputs employed to outcomes achieved presents a cost-effective
method to address long-standing societal issues. By using the Pay-For-Success
financial model, SIBs can provide governments with enormous cost-avoidance
savings while stabilizing the communities they serve.
RecycleForce
believes that SIBs have the potential to transform our nation's efforts to
confront challenging social problems by fusing the resources of both public and
private entities. As a business owner dedicated to improving the community in
which I operate, I enthusiastically support the Social Impact Partnership Act.
Keesling
is president of RecycleForce, a social enterprise that delivers recycling
services while providing workforce training to formerly incarcerated
individuals.