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Salt Lake City – United Way of Salt Lake (UWSL) has announced the creation of the country’s first-ever results-based financing vehicle designed to expand access to early childhood education for at-risk children in Utah. The investment deal, in which Goldman Sachs and J.B. Pritzker commit several million dollars in private-sector investment, could potentially benefit up to 3,700 children over multiple years and save state and local government millions of additional dollars.
“Access to early education gives children a foundation they will build upon throughout their education and beyond,” said Lloyd C. Blankfein, chairman and CEO of Goldman Sachs. “Through this innovative financing, we are pleased to partner with J.B. Pritzker and United Way of Salt Lake to provide the opportunity to thousands of children who otherwise may not have been able to attend preschool.”
In 2010, Voices for Utah Children, Granite School District, and UWSL began laying the groundwork for the transaction through a multi-year study of academic results and cost savings. The education program uses a locally-designed, structured curriculum to better prepare children for kindergarten, close the achievement gap and help them remain on track to complete high school, while decreasing the use of special education and remedial services in elementary school – resulting in cost savings for local communities, the state and the school district.
To date, Granite and Park City School Districts have implemented the program, yet many children do not have the opportunity to participate.
“We are committed to solving our community’s most complex social problems,” said Deborah Bayle, president and CEO of UWSL. “Without high quality, early education opportunities, it will not be possible to achieve our state’s goals of 90 percent proficiency in core subjects, 90 percent high school graduation, and 66 percent of Utahns with a post-secondary education. That is why United Way of Salt Lake is proud to be part of this groundbreaking financing model.”
In a longitudinal study conducted between 2006 and 2009, the Granite School District preschool program demonstrated that 33 percent of low-income students would likely have needed special education services. After participating in the program, 95 percent of those children no longer needed special education, allowing the state to save an estimated $2,607 a year per child for 12 years.
“If we believe that every child deserves the chance to climb the ladder of success and achieve their full potential, we need to make sure they can at least get to the first rung on the ladder,” said Karen Crompton, president and CEO of Voices for Utah Children. “We are pleased to work with UWSL and the other partners on this initiative to ensure a brighter future for children.”
“Investing early and intelligently in the development of infants, toddlers and preschoolers significantly improves educational outcomes,” said J.B. Pritzker, president of the J.B. and M.K. Pritzker Family Foundation. “Early learning reduces social and economic inequality and builds a better workforce and a stronger nation.”
The partnership demonstrates the availability of willing investors and the overall results-based financing structure contained in legislation (SB71) proposed by Sen. Aaron Osmond and Rep. Greg Hughes during the 2013 Legislative Session. The initial phase of investment of up to $1 million is being made as a “proof-of-concept,” with the potential for subsequent investment as public entities that realize cost savings as a result of the program join this unique partnership.
Salt Lake County Mayor Ben McAdams has proposed that the county consider a public/private partnership to advance the preschool expansion.
“In other states where rigorous standards and a high-quality curriculum have been used to offer preschool to economically-disadvantaged children, the return on investment has been 7 to 1 – that is a $7 benefit to the local budget – money not needed for special education, crime or public assistance as well as higher wages for consumer spending – for each dollar invested. It’s the right thing to do for children, and the fiscally responsible course for taxpayers,” said McAdams.