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In Chicago, preschool expansion via ‘social impact’ bonds

A group of investors is betting $17 million that getting more of Chicago’s children into quality early learning programs will generate bigger savings in the long term.

The investors will make a loan to the city so that 2,600 additional children can take part in half-day pre-school programs in the distirct’s much-lauded child-parent centers over the next four years, city officials announced Tuesday.

The city expects to repay the investors – including the Goldman Sachs Social Impact Fund, Northern Trust and the JB and MK Pritzker Family Foundation –with interest from the cost savings generated down the road in reduced special education services. If CPS doesn’t save money, the lenders won’t get repaid.

“Too often we think of the bottom line in these companies in dollars and cents,” said Mayor Rahm Emanuel during a press conference at the Velma Thomas Early Learning Center in McKinley Park. “The social impact bond changes that conversation […]. What happens in these rooms matters to the future of the city and that is all of our bottom line.”

Read the full story on Catalyst.

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