Bank of America embraces social impact bonds
Goldman Sachs put social impact bonds on the front burner earlier this year when it announced the one of the nation's first social-impact bond program.
It will work with New York City to provide a $10 million loan to a nonprofit that will implement an education and counseling program at the Rikers Island jail. If recidivism falls by 10 percent, the New York City government will pay the non-profit, which will in turn pay back Goldman. If recidivism falls further, the bond investors would make a profit.
The announcement puts Goldman Sachs in a position to do what it can to bring down recidivism. Massachusetts is also moving toward use of social impact bonds. Other banks may be thinking about jumping on the bandwagon.
The Charlotte Observer notes that Bank of America "has applied for a trademark on the phrase 'Anything a Society Truly Wants Can be Financed and Achieved.' Its trademark application goes on to say that it pertains to social impact bonds or 'project financing for socially beneficial programs.' "
As of right now, the U.K has embraced the concept to greater degree and Canada also has plans to develop the idea. In the U.S., the federal government has indicated its desire to expand such programs greatly in the near-term, though nothing concrete has been established.
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Goldman Sachs to issue "social bonds" for NYC