The NCAA and Gender Equality: Less-Than-Perfect

For this installment of the Key Elements Group’s March Madness coverage, we turn to women’s sports, asking several questions: How well does the NCAA balance its responsibilities between men’s and women’s collegiate athletics? How does the organization lives up to its responsibilities under Title IX? And – ultimately – does its actual commitment to gender equality line up with its mission statement?

The promotion of women’s sports is a foundational strategy for improving women’s rights across the globe. A recent UN report underscores just how valuable athletics are for breaking gender stereotypes, teaching teamwork and problem solving skills to young girls, and bringing women out of the shadows in repressive countries.

In this particular area, the United States outshines most of the world. According to the Independent, the United States – home to five of the top ten highest paid female athletes – is the single best nation for women’s sports. U.S. female athletes have gained world-renown in sports including golf, tennis, and soccer. The cultural shift that opened up this pathway stems largely from the implementation of Title IX in the 1970s.

Title IX – a portion of the Education Amendments of 1972 – stipulates that:

No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving federal financial assistance.

The provision applies broadly to any institution of higher learning that receives federal funding, mandating that women receive the same opportunities as men. This includes everything from scholarships, access to university services, and the opportunity to participate in extracurricular activities, including sports. As more and more high school girls train in the hopes of receiving sports scholarships, the relative success of Title IX emerges; in 1971, only 294,000 female high school students played sports, as opposed to nearly 3.2 million in 2011.

Over the years, Title IX has been subject to controversy, with opponents labeling the provision as overly politically correct, divisive, and divorced from the reality of collegiate athletics. Certain men’s sports – including many soccer, wrestling, and baseball – have indeed struggled in the post-Title IX era. Daily Caller columnist Eric McErlain remarks that Title IX is directly responsible for this, arguing that the gender quota system causes “profound damage” to men’s sports.

But cuts in men’s programs have more to do with Byzantine scholarship requirements set by the NCAA. Writing for ESPNW, Peter Keating discusses how universities scapegoat Title IX instead of addressing the real culprit behind cash-starved sports programs. NCAA Division I bylaws place limits on the number of scholarships that athletes from a particular sport can receive, giving preferential treatment to the two top money-making sports – men’s basketball and football. Keating writes:

Put simply, scholarship limits protect and promote revenue sports. The NCAA allows individual schools to fund specific men’s sports only to the degree that those sports make money nationally. That means LSU — or any other school — can’t give out more than 11.7 [the max set by NCAA bylaws] baseball scholarships, even if it were willing to shift grants from its basketball or football or golf teams.

The scholarship limits for non-profitable sports are arbitrary and are applied to all NCAA member schools. There is no correlation between the number of scholarships offered and the general popularity of a sport. This hurts the image of women’s athletics, as Title IX opponents point to the proliferation of unpopular women’s sports with low participation as proof of the law’s ineffectiveness and its detriment to male athletes. If schools did not have random limits imposed by the NCAA, they could offer scholarships that reflect actual interest levels, and do so equally for men and women.

There are a number of other telling facts that paint a less-than-rosy picture of gender equality in collegiate athletics. The Women’s Sports Foundation – a nonprofit founded by tennis legend Billie Jean King – reveals how women still lag behind men in athletic opportunity: female high school athletes receive 1.3 million fewer opportunities to play sports than male students; women have 63,000 fewer opportunities in athletics at NCAA institutions than men; and women receive $183 million less in NCAA athletic scholarships than their male counterparts.

These numbers speak for themselves. The NCAA is failing to promote academic excellence through athletics equally for men and women. The business of collegiate sports once again supersedes the importance of the NCAA’s nonprofit mission. Women are ideal recipients of athletic scholarships, and not only because of the inherent justness of gender equality; women are exemplary of the mythic student-athlete celebrated by the NCAA, often performing better academically than their male counterparts.

The ever-growing focus on the business of collegiate sports is also adversely affecting women coaches. During the advent of Title IX, about 90 percent of female teams had women coaches. Now, that number is down to 43 percent. Even in women’s collegiate basketball – which has historically been dominated by female coaches – men are making inroads, due in part to more money flowing into the game. This trend is chiefly alarming because women simply do not have the same opportunity to coach men’s sports. While the San Antonio Spurs hiring last year of former WNBA player Becky Hammon as the NBA’s first-ever female assistant coach is a step in the right direction, men still appear to benefit from the prevailing system, enjoying greater consideration for top positions than women.

Taken together, there is still much to be done. The NCAA’s failure to live up to its responsibilities to women athletes is in part due to the broken policies that privilege big schools with big money-making basketball and football teams. But with an unequal distribution of scholarships and the systemic advantage men have in procuring top jobs in college sports, the organization evidently needs a holistic strategy for pursuing greater gender equality.

A Look Into the NCAA Nonprofit Mission

(Check back this month for continued Key Elements Group coverage on this issue)

As discussed in the previous installment of this month’s March Madness series, the NCAA’s purported mission is to foster academic achievement through athletics. In the process, the tax-exempt organization generates revenue for universities, which can be used to improve campuses and offer scholarships.

On paper, the organization is a financial powerhouse, towering over the stature and resources of many nonprofit groups. According to the 2013 NCAA 990 tax form, the organization holds just under $800 million in assets. The widespread popularity of the top money-making sports – football and basketball – evidently pays off big, with ticket sales and media rights propping up such a resource-rich organization.

These sizable earnings are contingent on the players themselves, designated by the NCAA as “student-athletes.” While many top tier athletes receive scholarships in compensation for their efforts – reenforcing the NCAA’s narrative that it supports scholarly pursuits through sports – players receive little else, as illuminated by Shabazz Napier’s comments last year that there were “hungry nights” in which he was unable to purchase food.

The NCAA’s “student-athlete” categorization undergirds the legal barrier that prevents players from receiving compensation. This was codified in the 1950s, when Ray Dennison – player for the the Fort Lewis A&M Aggies in Colorado – died after sustaining a head injury on the field. The university fought his widow’s attempt to secure workers’ comp. The case ended up in the Colorado Supreme Court, which agreed with the school’s argument that Dennison was a “student-athlete” and not an employee eligible for benefits, further stating that Fort Lewis A&M did not have to pay because it was “not in the football business.”

Over time, however, universities have increasingly appeared immersed in the sports business. The media rights for the 2013 March Madness tournament went to CBS for $10.8 billion. Ads sold for an average of $150,000 per second. In 40 out of 50 states, the single highest paid public employee is a university coach, the average pay being $2.1 million and reaching as high – in the case of Nick Saban of Alabama – as $7 million. Writing for The Atlantic, Taylor Branch uncovered tax forms that confirmed that the NCAA spent $1 million chartering private jets in 2006. In 2013, NCAA President Mark Emmert made $1.7 million.

While collegiate sports generate immense wealth, any attempt by players to capitalize on their stardom results in suspension and other penalties. Take for example the case of A.J. Green – a wide-reviewer for Georgia during the 2010 season. Green sold his own jersey from the previous season in order to raise money for a spring break trip. The NCAA suspended Green for this minor transaction, all while replica jerseys emblazoned his number still sold in the team’s swag shops (some earnings of which go to the handsomely compensated coaches).

These rules do more than keep cash-strapped players from enjoying spring break to the fullest. Kent Waldrep was a Texas Christian University running back until he was paralyzed below the neck by a gruesome tackle in 1974. The school paid for hospital bills for just under a year and abandoned Waldrep’s scholarship. Bound to a wheelchair, Waldrep brought forth a lawsuit in the 90s through which he hoped to receive workers’ comp for the high medical costs. Under the “student-athlete” defense, the case was ruled in the university’s favor in 2000.

Considering how stringent the NCAA is with regard to athletes’ legal status and how committed it is to preventing financial benefits for players, it would be paramount for the core mission – that of promoting academic achievement – to actualize through real results. The benefits, however, are murky.

Top-tier athletes spend up to 60 hours a week training, leaving very little room for academics. The NCAA’s maintains a 1-year scholarship rule, leaving it up to coaches to choose who to keep after each season. In the event of injury that renders their value as money-making athletes null, players can easily lose scholarships and thus their sole means of acquiring a degree.

NCAA guidelines require schools to use earnings from collegiate sports to tutor athletes. In the 2006-2007 school year, the NCAA distributed $19.8 million out of its Academic Enhancement Fund to Division I schools for the explicit purpose of schooling athletes. Nonetheless, many schools have players who literally cannot read and write, and many universities go to great (and illegal) extents in order to ensure player grade eligibility. This was evidenced by the recent University of North Carolina scandal in which the school employed summer “paper classes” to artificially inflate players’ grades. Indeed, two former athletes are suing the NCAA and the University of North Carolina because they were deprived a quality education because of this deceptive system.

Many individuals have simply become habituated to these practices, with players in Florida providing self-incriminating evidence during an NCAA investigation because they figured that everything was approved on account of the pervasiveness of grade-gauging and cheating.

Considering that fewer than 2 percent of athletes proceed to professional sports leagues following university, this track record is poor and makes the continued privation of student-athletes difficult to justify. While offering salaries for players is not likely the best solution, other proposals have come up. Steve Spurrier of South Carolina, for example, has proposed stipends for players.

The discussion is gaining more and more traction, with even President Obama weighing in. The NCAA is not pursuing its mission. As an op-ed in the Boston Globe states, the organization can’t have it both ways. It either needs to calibrate its practices to better serve its stated purpose, or it needs to rebrand itself.

Has the NCAA Veered off Course?

(Check back this month for continued Key Elements Group coverage on this issue)

March Madness is here again. The annual month-long tournament is one of the biggest in U.S. sports. As the 68 team bracket whittles down over the course of the month, millions of fans tune in across the country. The final between the University of Kentucky and the University of Connecticut last year alone attracted 21.2 million TV viewers.

The tournament brings together players’ dreams of athletic greatness and the United States’ unshakeable enthusiasm for college basketball. Not to mention broadcasters’ unshakeable enthusiasm for big profits.

Over the course of March, 2014 tournament ad revenues nearly exceeded the entirety of the NFL postseason that year. This, of course, includes the Superbowl, which hawks 30-second spots for $4.5 million, or about $150,000 a second. Between 1981 and 2011, the price of March Madness broadcast rights multiplied by 50. The 2014 tournament cost a gargantuan $10.8 billion, which CBS and Turner Broadcasting were more than willing to pay considering the lucrative returns.

The $10.8 billion went to the NCAA (the National Collegiate Athletic Association), a group that regulates collegiate athletics and controls media rights to college sports events.

On-and-off, the NCAA is the target of scrutiny, largely due to the fact that it is a registered 501.c.3 nonprofit. The organization’s stated purpose is to promote academic excellence and achievement through athletics. This mission – no matter how worthy it sounds – is at best marginally pursued, and at worst used as an altruistic-sounding cover for the group’s lack of transparency, its deleterious effect on general student populations, and its exploitive profiteering of student labor. This poses the question: if a nonprofit is not pursuing its mission, what exactly is it doing?

Last year, Shabazz Napier – the exceptional UConn point guard – famously opened up about his difficult college experience, informing reporters, “We’re definitely blessed to get a scholarship to our universities, but at the end of the day that doesn’t cover everything. We do have hungry nights that we don’t have enough money to get food . . . but I still got to play up to my capabilities.”

On a deeper look, it is rather shocking that a key participant – whose labor makes the tournament possible – literally went nights without food while nonprofit executives and publicly-employed coaches enjoyed multi-million dollar paychecks. Napier is now a pro, playing with the Miami Heat, and is therefore in a much more secure position. But few players have that luxury – fewer than 2 percent of NCAA athletes from the two money makers (Basketball and Football) wind up in professional leagues. For hundreds of struggling players, there is no silver-lining at the end of their college careers, especially considering that tough training regimens often prevent students from receiving meaningful educations.

This month, Key Elements Group will peer into the NCAA, providing analysis on how its practices and operations contribute to athlete’s careers – both in sports and education – ultimately assessing just how well the association follows its purported goals, and asking the question: what does it mean when nonprofits veer off course?

Philanthropy Saves Monuments, How About Infrastructure?

There’s one thing everyone can agree on: the United States’ infrastructure needs an overhaul.

While a contentious debate over funding rages on, there is a demonstrable consensus that cracking roads, neglected bridges, and outdated technology not only pose a threat to the country’s economic viability, but also to the physical wellbeing of its people.

Another country is facing similar issues involving rote maintenance and the elusive funding necessary to pursue it. To account for the difference between the two cases, just trade a power grids for aqueducts.

Italy has had difficulty paying for the conservation and refurbishment of its extensive catalog of amphitheaters, churches, and various artifacts from its long and storied history. Along with many of its southern European peers, Italy has been slow to emerge from the recession. The country has sizable public debts, and Rome officials oscillate back and forth between filing the city for bankruptcy. In this cash-strapped climate, channeling public resources to highly expensive historical conservation is exceedingly difficult.

Tourism is an essential component of Italy’s economy, and state officials needed a solution. They turned to one area of the Italian economy that has weathered the last decade’s downturn – the fashion and luxury industry.

A variety of high-grossing corporations have stepped in to ensure the maintenance of Italy’s national patrimony. Tod’s, an Italian fashion company, is paying to refurbish the iconic colosseum. The company Fendi has shelled out $4 million to restore the Trevi Fountain. Bulgari has donated $2 million for revitalization efforts for the Spanish Steps.

Dario Franceschini, Italy’s culture minister, discussed the public-private partnerships that are currently shaking up the country’s funding system:

Our doors are wide open for all the philanthropists and donors who want to tie their name to an Italian monument. We have a long list, as our heritage offers endless options, from small countryside churches to the Colosseum. Just pick.

Many Italians find Franceschini’s words troubling. While finding the necessary funding for such a trove of priceless artifacts and buildings is important, there are nonetheless a host of ethical questions for the Mediterranean nation. Will these partnerships usher in the commercialization of publicly held assets? Will good intention give way to future privatizations? Are these practices here to stay?

Italy is new to the corporate philanthropy scene. Public-private relationships of this nature are more common in the United States, which has an entrenched tradition of business philanthropy. Indeed, the United States has seen its share of philanthropists propping up national landmarks.

In 2012, David Rubenstein – the billionaire head of the Carlyle Group – donated $7.5 million to restore the Washington Monument in the country’s capital. After the famous obelisk sustained damages from an earthquake, the National Parks Service struggled to secure the funding necessary to repair the structure and to reenforce it against similar calamities in the future. Rubinstein – who has also contributed to the Smithsonian and the U.S. panda reproduction program – stepped in to front the cost.

As unfortunate as it may be that national symbols such as the Washington Monument in the United States and the Colosseum in Italy require private support, they may nonetheless carry a lesson for how the philanthropy sector can fill some of the gaps in infrastructure funding created by government inaction. By marrying art and infrastructure, private-public relationships can formulate and execute fundable projects. A provincial bridge does not carry the same import as the Lincoln memorial, but in recognizing the value of public art and its fundamental relationship with public infrastructure, creative philanthropic thinking can find solutions to these pressing issues.

ISIS Destruction of Art Reminder of Nonprofits Mission

ISIS (also known as IS, or ISIL), has dominated headlines for over a year now. The ultra-radical militant group has occupied an astonishing amount of territory, stretching across northern Iraq and into into Syria, with outposts along the Euphrates. As Libya continues to slide into chaos, it has seen an uptick in ISIS-aligned fighters, raising fears of yet another country losing territory to what has quickly become the most visible standard-bearer for radical jihadism.

The group’s success has in part come at the expense of other Islamic radical groups, such as al-Qaeda, which lack a flair for social media and 21st century technologies. Young recruits have flocked to take up arms in the pseudo-state, and according to analysts this is due in part to aggressive online marketing campaigns. From featuring a Canadian recruit playing ice hockey to memes that reference popular violent games, ISIS propagandists create videos and communications that appeal to youth sensibilities. These ploys – combined with filmed beheadings and immolations – are part of a larger effort to catch the world’s eye.

The most recent propaganda effort? The destruction of art.

International institutions such as UNESCO and various NGOs are struggling to come up with meaningful solutions to protect world heritage artifacts in the wake of the highly publicized destruction of ancient Greco-Roman and ancient Mesopotamian artifacts at an antiquities museum in Mosul – the northern Iraq city currently held by ISIS militants. Underscoring the often contradictory blend of radical ideology and self-serving pragmatism, ISIS militants obliterated priceless statues while purportedly carting off others to traffic on the black market.

Pending deputy ambassador to the Libyan delegation at UNESCO Hafed Walda has called for the fortification of museums in Libya. Al-Gailani Werr, a London-based archeologist, remarks on the global nature of this cultural violence: “These things are part of the history of humanity . . . If you destroy them, you’re destroying the history of everyone.”

For violent political groups, the destruction of art is a forceable way of annihilating perceived threats to cultural hegemony and legitimacy. From the Khmer Rouge in Cambodia to Nazi Germany, obliterating cultural artifacts was part and parcel with a greater authoritarian design for control and discrimination.

Indeed, the mere fact that ISIS went out of its way to destroy material objects it construed as fundamental threats to its fragile world-view underscores the democratic nature and resilience of art. This is why a guarantee of protection for cultural rights is enshrined in the UN’s Universal Declaration of Human Rights, and why so many nonprofits the world-over dedicate so much time and so many resources to ensure that everyone the world over has his/her cultural privileges upheld.

As the turmoil rages on and more lives and cultural heritages are lost to ISIS’ extremism, arts nonprofits should feel emboldened in their pursuit of universal accessibility to cultural artifacts and experience. As Irina Bokova, director general of UNESCO, states:

When culture is under attack, we must respond with more knowledge, and with ever greater effort to work to explain the importance of humanity’s shared heritage. This is why we appeal to all cultural institutions, museums, journalists, professors, and scientists to share knowledge widely about the Mesopotamian civilization. We need to remind all of the history of this land which led the Islamic golden age.

Nonprofits possess a fundamental role in Ms. Bokova’s call-to-action. In the face of nihilistic destruction and violence, the celebration and protection of culture is part of the remedy for peace.

Nonprofits Should Celebrate Net Neutrality Rules

In good news for nonprofits and the continued viability of their online fundraising operations, the Federal Communications Commission (FCC) passed new rules supporting net neutrality, scuttling telecom businesses’ plans to implement a tiered system which would have directly harmed startups and charities unable to pay for the “fast lane” service touted by industry lobbyists.

About a dozen internet service providers (ISPs) – including AT&T, Comcast, Cox, and Verizon – sought control over how users access content online, arguing that they should have the ability to privilege certain content and data, as well as provide faster and more secure connections for businesses or content providers willing and able to pay a premium price.

After previous FCC rules were tossed out in 2014, net neutrality – or, in layman’s terms, an open internet in which ISPs provide access to content on an equal basis – was in doubt. Arguing that rules prohibiting a tiered system prevent “innovation” in the industry, telecom corporations aggressively pursued a rule change that would grant them greater control to award certain businesses and organizations with an optimum service. In this scenario, for example, a large and established news organization would receive faster upload speeds than a small nonprofit news site.

The new rules designate telecom businesses as “common providers,” thereby categorizing the internet as a utility, such as electricity. Like with other important utilities, providers cannot selectively deliver their essential services to particular areas or businesses to the detriment of others with less spending capacity.

Many big-time tech companies and content providers – including Google, Apple, and Facebook –  joined in the debate, citing net neutrality as the catalyst for innovation that enabled them and other enterprises to launch out of garages and climb to the top bracket of profitability in the world economy.

If the net neutrality rules did not pass, nonprofits would have suffered a significant loss. Many services that have nonprofit parallels to the private sector would have been at a competitive disadvantage. From independent investigative journalism groups to credit unions, organizations would have faced sizable hurdles in providing their services at a same level as their for-profit peers. Online fundraising – which, as evidenced by the 2014 #GivingTuesday, is more important than ever – would also have likely lost some of its efficiency.

Nonprofits are major content providers. Relaying their message, mission, and goals to prospective donors, nonprofits generate a massive amount of important online content sustained by accessibility to sound digital dissemination. Under the telecom corporations’ scheme, troves of nonprofit communications would likely have been relegated to the “slow track,” with for-profit, salable content flying along the privileged track.

While the rules will most certainly face industry lawsuits, the victory reflects a codification of the democratic ideals of the internet, in which creative minds find even-footing with those of the establishment, guaranteeing a fair platform for organizations to make their case and grow.

Social Impact Bonds Could Influence Nonprofit Fundraising

(Part one in a three part series on social impact bonds)

A pioneering system for enacting social change yielded its first results late last year, answering few questions as to its efficacy, cost-effectiveness, and future import.

Social Impact Bonds (SIBs) – a transatlantic phenomenon with enthusiastic support in both the United States and Great Britain – first emerged on the philanthropy scene in 2010. Writing for Harvard Magazine at the time, Ashley Pettus describes SIBs a means to “offer governments a risk-free way of pursuing creative social programs.”

The “risk-free” nature refers to the use of private investment for social spending, thereby eliminating the public’s financial liability in the event of the project’s failure.

In theory, this is how an SIB functions: it involves an intricate arrangement, spanning government, nonprofit, and private sectors. First a government defines a social issue and policy objective, replete with a measurable outcome and a timeline for the project. The government then contacts a nonprofit intermediary whose job is to secure investors for the project. With funding secured, the intermediary then employs and manages front-line service nonprofits to pursue the project’s objectives.

The contract delineates the terms of success. If the project meets or exceeds its goals, a predetermined metric dictates the return-on-investment for the project’s backers. This means that – in the event of success – the government guarantees the upfront investment, paying it back in full, and additionally rewards the investors for sparing the government future social spending costs. If the project fails, the investors suffer losses and the public is (theoretically) off the hook.

According to supporters, the appeal is manifold – SIBs limit the taxpayer’s risk in social spending, encourage innovation in solving social issues, and also incentivize investment in pro-social causes by rewarding investors for successes.

In the United States, the enthusiasm and intellectual backing for SIBs stems largely from the faculty at Harvard. Jeffrey Liebman – Malcolm Wiener professor of public policy at Harvard and former acting deputy director for policy of the Office of Management and Budget for the Obama Administration – released a report in conjunction the Center of America Progress in 2011 that extolled the virtues of SIBs. Liebman went on to found the Harvard Social Impact Bond Technical Assistance Lab, funded by the Rockefeller Foundation. The institute pairs government agencies with Harvard fellows who assess agency capacity for implementing SIBs.

The model has broad political support, with the Obama Administration (the president himself a Harvard alum) budgeting $300 million for future SIB-related projects. A bipartisan group of Representatives introduced the Social Impact Bond Act, which would implement the president’s SIB allotment.

If SIBs take hold, there are huge implications for the nonprofit sector, according to Key Elements Group President and CEO Lynette Zimmerman. “This has the potential to become a major shift in the way non-profits provide programs and leverage public grant dollars,” Zimmerman explains. “Over the past several years public dollars available to non-profits have decreased. Monies set aside for SIBs could be a new funding source for organizations quick to position themselves.”

Currently, the national value of SIB investments in United States is small. There are approved or pending projects in 16 states, plus Washington, DC. New York and Massachusetts have pursued the model most aggressively. The city of New York struck a $9.6 million deal in 2012 with Goldman Sachs and the nonprofit MDRC to reduce youth recidivism at Riker’s Island. Gov. Deval Patrick of Massachusetts introduced the nation’s first competitive bidding program for SIBs in 2012.

For all of the enthusiasm and slow-but-steady proliferation of projects, there are virtually no results available in order to access the model’s effectiveness. The only available results are from the very first SIB, initiated in the UK, which had its first review in August 2014.

The results were inconclusive. The project is sponsored by the Ministry of Justice, with funding from the national lottery. Social Finance UK – intermediary SIB booster funded by big philanthropies such as the Rockefeller foundation and the Omidyar Network – raised 5 million pounds from private individuals and hired two nonprofits with the goal of reducing recidivism at the Pertersborough prison in East England by 7.5 percent by 2016. If the rate fell by 10 percent by late 2014, the investors would enjoy a first round of payments.

Recidivism rates fell short at 8.4 percent. If the project continues at this rate, however, investors will receive their money back by the end of the program, with an additional 13 percent profit.

These modest gains were deemed insufficient by government officials, who cancelled the third trial group for the project. The individuals that would have been in the program will instead be a part of a national program that functions similarly to an SIB except for one major component – it will not have any investors anticipating financial rewards. These sort of policy shifts are one of the chief dangers that analysts predict could curtail the effectiveness of SIBs, which are data-driven projects that accumulate actionable information over time.

There are other criticisms. Some specialists argue that the projects do not actually save or free up public money, since the amount raised by investors is budgeted and set aside by the government. Additionally, the metric for deciding returns on investment could pose steep loses for taxpayers and arbitrary earnings for investors. Budget analyst Kyle McKay testified about Massachusetts SIBs before the Senate Budget Committee that while private backers are providing only $12 million in SIB funding, the state is on the hook for $27 million in payments.

Lastly, if SIBs become a dominant means for funding social spending, investors could use data to cherrypick projects that are likely to succeed, thus neglecting the very pressing and more challenging social issues that the model was designed to address.

This is all speculation, however. With only one data set describing only a portion of a long contract, the Peterborough project does inspire concrete conclusions. What is for certain is that with bipartisan support, intrigued investors, and groups such as Bloomberg Philanthropies willing to backstop loses on some SIB projects, the model will be around for the foreseeable future. We’ll stay up-to-date on the issues, looking at what the growth and mutation of SIBs means for nonprofits.

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