Improving social and economic conditions |
Greetings!
Information for you in this issue of Progress Through Business
December 2015 Vol 66
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We are launching an exciting new online daily news source dedicated to measurable impact made through businesses. The online periodical is called ProgressDaily.com. This new website offers articles and graphics highlighting businesses and business practices that have significant impact on healthcare, international development, employee ownership, financial education and the environment.
As part of our new format, you will find "ACT NOW" links in the articles that will empower readers to translate newly found knowledge into meaningful action by providing guidance on how users can best learn, do, or contribute. We hope that you will visit the site regularly to stay up to date on social enterprise and to take advantage of the opportunity to make a difference! Visit Progress Daily
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 'Pay for Success' - When Government, Private
and Community Interests Align
John Hoffmire and Richard Payne
Not all government policies are as effective as intended. This can happen for a variety of reasons, including failure to thoroughly research a policy's consequences or a misunderstanding about which people will be affected. Often policies are proposed based on stories and anecdotes rather than data, or no measurable goals are proposed to accompany a policy. In the last few years, innovative "pay for success" programs are transforming the way in which government develops and implements policy in various places around the country, including Salt Lake City.
What is a "pay for success" program? It is a program initially funded by investors through which, if successful, as determined by an independent third party, the government pays said investors a pre-specified return. If the policy is unsuccessful, the investors can lose some or all of their investment. This is good for citizens and government since taxpayers' dollars are only spent on policies that actually deliver results. The organizations that implement work also often receive upfront monies and do not have to fundraise on a yearly basis to provide the services which are contracted.
So what is an example of a problem that can be addressed through a pay for success program? Children who are not prepared for kindergarten often perform more poorly in school than their peers. Consequently, special education programs have been developed to assist these students. However, catching up these students is more difficult than preparing them prior to kindergarten.
To better help children succeed in school, as well as reduce costs, Salt Lake City began a pay for success pilot program in 2013 for preschool kids. The goal was to provide a high quality preschool education that would better prepare kids for kindergarten and reduce the number of students who need to utilize special education.
In the pilot program, nearly 600 children were placed in a high quality preschool funded by Goldman Sachs and J.B. Pritzker. Of the 600 children who enrolled in the preschool, 110 were identified as likely to need special education services. In the first year of kindergarten, only one of the 110 at-risk children utilized special education services. The initial investors receive a percentage of the money that is saved from special education expenses as a return.
But who would invest in initial pay for success programs, especially when there may be little or no knowledge on whether or not the program will be successful? Click here to read the rest of the article. |
 Many Potential College Students are Not Going to University Partly Because of Fear of Debt.
John Hoffmire and Mario Alejandro Mercado Mendoza
Clearly, there can be problems when students and their families take on too much debt to pay for school. But the pendulum has swung too far. Many potential college students are not going to university, forever hindering themselves, partly because of fear of debt.
Here is the headline news that is now discouraging students from going to college. According to the Wall Street Journal, the 2015 college graduating class took on the highest average debt per borrower ever. With up to $33,000 to repay on average, about 40 million Americans owe close to $1.2 trillion in college debt. With these kinds of figures, it is understandable that many decide not to pursue a college degree.
Figures collected by the Bureau of Labor Statistics show that the median pay for a job as a server, bartender, or cashier rarely exceeds $20,000 per year. Even one of the highest paid jobs for non-graduates, which is that of a flight attendant, has a median salary of $37,240 per year.
On the other hand, the graduating class of 2014, armed with their college degrees, made a median of $45,478 per year as a starting salary, according to Time magazine. Moreover, the Federal Reserve Bank of San Francisco states that, even after making conservative assumptions, "the college graduate would have made about $830,800 more than a high school graduate" by the time the graduate retires at the age of 67. Clearly, $830,800 is far more than the $33,000 plus interest that a student may borrow and owe.
What is more, the Pew Research Center states that the unemployment rate is three times higher for people with a high school diploma than for those with a college degree. Furthermore, the center goes on to say that the share of people living in poverty is more than three times higher for high school graduates, and the salary gap between college and high school graduates is growing larger each year. Click here to read more. |
 BYU and U. Get Along - Students Jump into Impact Investing
John Hoffmire and Sydney Croft Brigham Young University finance student Aaron Cragun was hoping to find an opportunity to both refine the analytical, strategic and presentation skills needed to succeed in his career and utilize his abilities and resources to make a positive change in society. When he discovered an internship opportunity at the James Lee Sorenson Global Impact Investing Center (SGII Center), Cragun realized that he could do both.
Impact investing is the active placement of capital into businesses and funds that generate social and environmental benefit while simultaneously generating financial returns.
Rather than separating the financial and philanthropic worlds, impact investing merges the best practices from traditional asset management, private equity and venture capital investing, business development, international economic development and environmental innovation to support enterprises that maximize both financial returns and social good.
The SGII Center is one of the world's first student-run impact investing firms. The center began through a partnership between Brigham Young University's Ballard Center for Economic Self-Reliance and the University of Utah's Eccles School of Business. Entrepreneur, business leader and societal innovator James Sorenson and global impact investor Geoff Woolley established the center with the aim of creating opportunities for college students to experience an immersion in the impact investing space.
The mission and purposes of the SGII Center are to accelerate and advance the understanding and application of principles of free enterprise to create scalable and sustainable global societal change.
Student associates at the SGII Center conduct projects and research for leading impact investment funds, entrepreneurs, nonprofit organizations and program-related investment foundations. The services are provided for free or at a low cost in order to form long-term relationships throughout the impact investing world. Upon raising a fund, the SGII Center can leverage the partnerships to co-invest along with top social investment funds. Investment research includes both fact gathering and an analysis of the information. Each project is customized based on the needs and time constraints of the client.
The analysis performed by the student associates is extensive in both breadth and depth. Among the fields of their research are a market sizing analysis, a company positioning analysis and an impact analysis in which students evaluate potential investments based on social metrics, environmental metrics, social return on investment, societal concerns and attitudes and a livelihood analysis. Please click here to continue reading. |
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