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A Sustainable Financing Model: High Quality Preschool for At-risk Children

A Sustainable Financing Model: High Quality Preschool for At-risk Children. Karen Crompton, President and CEO Voices for Utah Children June 25, 2013. Utah Education Initiatives. Governor’s Education Excellence Commission

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A Sustainable Financing Model: High Quality Preschool for At-risk Children

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  1. A Sustainable Financing Model: High Quality Preschool for At-risk Children Karen Crompton, President and CEO Voices for Utah Children June 25, 2013

  2. Utah Education Initiatives Governor’s Education Excellence Commission • Ensure our children achieve reading proficiency by the end of 3rd Grade • Increase the number of High School students completing post-secondary courses • Align educational training to meet the workforce demands of the marketplace

  3. Utah Education Initiatives Prosperity 2020 – An effort to strengthen Utah’s economy by improving education 66% of Utahns with post-secondary certificates or degrees 90% of elementary students proficient in reading and math STEM Top 10 Center for technology, job and business United Way of Salt Lake – Community Learning Centers

  4. Getting Started Three big questions: • Could we identify high quality preschool programs within Utah? • Could we get data about outcomes? • Could we get the research project funded? YES!

  5. High Quality Preschool in Utah • The Granite School District (GSD) Preschool Program serves approximately 3,000 students per year in regular and special education settings in 45 schools • Title 1 funding used to support preschool in 15 schools • Early Reading First grant in 2005 • GSD Designated a “Center of Excellence” by U.S. Department of Education

  6. Preschool Data

  7. Sustainable Financing Model Cost avoidance strategy • Reinvest savings from reductions in special education utilization into high quality ECE programs for at-risk children • As more children are served, more money is saved, which in turn allows the school district to serve more ECE children who are at risk for school failure • Financing strategy is sustainable and scalable

  8. Other Partners

  9. 2010 Longitudinal Study • Expanded the GSD study to additional cohorts of at-risk 3 and 4 year olds • Results demonstrated that nearly 33% of low-income 3 year olds would likely end up in special education without significant intervention • For those that attended GSD preschool, 95% avoided special education • Results have now held for 5 years

  10. Social Impact Investment Opportunity Finding a champion – State Senator Aaron Osmond • 2012 legislation: High Quality Preschool Project (SB226) • 2013 legislation: Results Based Financing for Early Childhood (SB71) • Results-Based Financing is a partnership in which private capital funds the upfront cost of voluntary early childhood education for at-risk children and state government only pays if the program is successful in meeting performance targets.

  11. SB71 Results Based Financing • Establishes the Result-based Early Education Board • The director of the Division of Workforce Services, the state treasurer, the superintendent of public instruction, an attorney with expertise in financial contracts, a child development expert, two representatives of nonprofit entities that study or advocate for early childhood education appointed by the governor. • The Board may contract with private capital to fund a high quality preschool program in a Local Educational Agency (LEA) or a home-based educational technology program for early literacy and numeracy for eligible children

  12. SB71 Results Based Financing • $1,000,000 in ongoing funds from the General Fund appropriated to the Results-based Early Education Restricted Account • The Board pays the investor if performance targets, outlined in the contract, are met • The legislation requires the program to be independently monitored and evaluated to assess if performance targets have been met • “Right from the Start” Video

  13. Proof of Concept • Letter of Commitment signed June 11, 2013 • Creation of a Performance Trust – UWSL will provide $1 million to serve as the repayment fund for the first year cohort • Social Impact Loan – Goldman Sachs and the J.B. Pritzker Foundation will make a loan of $800,000 to be subgranted to expand preschool for 450 three and four year-olds • Intermediary – UWSL

  14. Proof of Concept Terms • UWSL will pay back the investors’ principal, plus 5% interest if specific performance targets are met • “Success Payments” if larger numbers of children are kept out of special education • All principal, interest and success payments are capped at the total amount in the performance account • Additional funders to the performance account are being sought to expand the number of children

  15. Next Steps • Salt Lake County is considering participation in the proof of concept • Proof of concept will simulate SB71 for one year to demonstrate the availability of willing investors, the role of the intermediary and independent evaluator, the overall “pay for performance financial structure” • Legislation will be reintroduced in 2014

  16. A Sustainable Financing Model:High Quality Preschool for At-risk Children Voices for Utah Children 747 E. South Temple, Ste.100 Salt Lake City, UT 84102 801-364-1182 www.utahchildren.org

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