'Social impact bonds' can transform education

February 22, 2011

In "Private money, public good" (Feb. 14) Gadi Dechter's discussion of the "social impact bonds" proposed by the Obama administration draws attention to a market-driven solution that may address at least two challenges in the public, or social, sector. First, too many non-profit organizations lack sufficient rigor to be held accountable for results. Second, philanthropists and capital investors need a new framework for engagement in the big social problems of our time, especially in finding solutions to the crisis in public education.

Recently, the results of a national test indicated that 12 percent of black fourth-grade boys were proficient in reading versus 38 percent of white fourth-grade boys. As the developer and organizer of a charter school project in Baltimore City, I am anxious to see an audacious new approach to funding educational projects that show great potential to impact the achievement gap in Maryland. I wonder aloud why we shouldn't invest more dollars in "educational reform" projects where the innovators are held rigorously accountable for the results.

It is well known fact that Maryland and other states allocate more public dollars to incarcerate an individual in a prison cell rather than educate a child in a well-resourced, well-funded public school classroom. Incarceration has a social cost; education has a social and economic benefit. Real impact in public education could be sustained, for instance, if philanthropists and investors (in partnership with the government) made substantial capital investment in education reform that would intervene in the lives of children who should be headed to college rather than jail.

My proposal would be for Maryland to move with all deliberate speed to create its own "social impact bonds" in education. If we have the political will and resources from the political, non-profit and private sector to create fundamental changes in public education through the "social impact bonds," let's do whatever it takes to develop productive citizens through innovation and excellence in public education.

Jack J. Pannell Jr., Baltimore

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