What We’re Reading: Nicholas Kristof and Sheryl WuDunn on the Power of Early Intervention

In a  New York Times Sunday Review article on September 14, Nicholas Kristof and Sheryl WuDunn explore “the way to beat poverty” – through good parenting and early intervention, “ideally in the first year or two of life or even before a child is born.” They highlight the work of Nurse-Family Partnership (NFP), which “dispatches nurses to visit low-income, disadvantaged families and offer counseling on child-rearing.”

As Kristof and WuDunn point out, Nurse Family Partnership’s mission is grounded in the power of early intervention. By working with expectant mothers through the child’s second birthday, NFP prevents problems from emerging and thus improves long-term life outcomes for mother and baby. Rigorous studies repeatedly show NFP’s ability to deliver measurable results, such as more healthy, full-term births, and fewer developmental delays. At the same time, the program generates a positive return on investment by eliminating the need for costly remediation services, such as NICU and special education expenses.

So it is indeed “infuriating” (as expressed by the authors) that NFP is only able to serve 2-3% of first-time mothers on Medicaid. Like most nonprofit service providers, NFP has traditionally relied on government and philanthropy to fund its work, but these sources are increasingly inadequate in an era of scarce resources and soaring need. Emerging models to tap the capital markets have great potential to complement these traditional funding sources.

This is where Social Impact Bonds (SIBs) come in. SIBs are public-private partnerships that mobilize investment capital to scale up the work of evidence-based nonprofits like NFP. SIB financing offers the potential to unlock new sources of capital, drive long term, flexible resources to what works, and allow service providers to focus on their core mission rather than fundraising. SIBs are being actively explored in red and blue states; at the federal level, bipartisan bills in support of SIBs were recently introduced in both the House and Senate.

These diverse partnerships are challenging to structure and maintain, so Social Finance is a nonprofit intermediary that helps to bring stakeholders together, and design and manage these projects. We are honored to be partnering with NFP to develop SIBs in South Carolina, New York and California that will fund NFP’s expanded reach. SIBs cannot solve all our social challenges, but they can play an important role in enabling high-performing organizations like NFP to make lives better for the youngest and most vulnerable of Americans.

Entry by Jane Hughes, Director of Knowledge Management 

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