According to United States Census figures, over 46 million Americans, including 16 million children, live in poverty. The most recent analysis of relative poverty from the United Nations Children’s Fund (UNICEF) rated the United States as having the highest child poverty rate in the industrialized world.
Poverty impacts all of us but it especially affects children. How can a child learn effectively if he or she is hungry and malnourished or lacking treatment for a chronic illness? We have a special responsibility to foster children, yet according to the Child Welfare League of America, in a national survey, 25% of foster youth reported being homeless at least one night two-and-a-half to four years after leaving foster care and only 54% of former foster youth had completed high school. These are just a few of the many hardships American children in poverty suffer every day. This is a crisis that strikes at the very fabric of our nation and its future success.
GRACE is committed to reducing child poverty in America. This is an achievable goal. The United States has shown that together, with the help of government, poverty can be substantially reduced. Working with partners in government, non-profit and faith based organizations, business, academic institutions and service providers, GRACE will seek to identify and reach consensus on cost-effective measures in areas such as education, health care, mental health, housing, homelessness, foster care, hunger and other areas that have a direct impact on improving the lives of people living in poverty.
One example of a cost-effective measure that could provide much needed financing for social programs is through the use of Social Impact Partnerships, also known as social impact bonds, which have been successfully used in the UK and are now being adopted in New York City and Massachusetts. Social Impact Partnerships are a new financing mechanism whereby a government agency contracts with a non-government organization (NGO) to meet a specific goal with a defined population in a set time frame. The NGO provides the up-front funding for the program either from its own resources or from investors. If the NGO meets the goals, the government reimburses it for the cost of the service along with an agreed upon rate of financial return. If the NGO does not meet the goals, the government pays nothing. With the use of social impact partnerships, government only pays for successful programs and the private sector is incentivized to use its innovation to address societal problems.
GRACE is sponsoring two pieces of Legislation in California – Senate Bill 593 (Lieu) and Assembly Bill 438 (Mitchell) which would authorize the use of social impact partnerships in California.
Through continued research and collaboration, GRACE will work to adopt the most effective measures to reduce child poverty in America.