Federal Reserve Bank of San Francisco

Community Development

Rikers Island: The First Social Impact Bond in the United States

Author(s): John Olson and Andrea Phillips, Goldman Sachs

April 2013

Community Development Investment Review

In August 2012, Goldman Sachs Bank’s Urban Investment Group (UIG) announced the first social impact bond (SIB) in the United States, a $9.6 million loan it would make to support the delivery of therapeutic services to 16- to 18-year-olds incarcerated on Rikers Island. The loan will be repaid based on the actual and projected cost savings realized by the New York City Department of Correction as a result of the expected decrease in recidivism. This unique public-private partnership between the City of New York, MDRC, the Osborne Association, Bloomberg Philanthropies, and Goldman Sachs leverages high-quality nonprofit capacity, private-sector capital, and philanthropic support to address a pressing community challenge.

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