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Social Impact Bond Launches in U.S. Backed By Goldman Sachs, Mike Bloomberg Billionaires See Profit in Prisons, But It's a Good Thing This Time

The money men at Goldman Sachs join NYC's Billionaire-in-Chief to use creative finance for good. The Social Impact Bond has come to America!


Goldman Sachs is making an unusual loan: $9.6 million to help young men stay out of New York City jail. And they could earn millions on the deal. But it's taxpayers more than shareholders who should be pleased with the plan.

New York City Mayor Michael Bloomberg proudly announced a new kind of City spending yesterday. "As the first city in the nation to launch a Social Impact Bond, we are taking our efforts to new levels and we are eager to see the outcome of this groundbreaking initiative,” he said in a statement. As Bloomberg and Goldman go, expect other banks and mayors to follow.

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New York City's Dirty 10,000 Get Paid To Clean Up

One percent of the city's buildings spew more soot than all its cars. Now New York has motivated banks to lend to landlords so they can clean up.


In America's largest city, buildings pollute more than cars. It's not a matter of numbers though, it's a matter of clean fuel, or the lack of it.

Just one percent of buildings in New York still burn heavy forms of heating oil, but those 10,000 polluters spew more soot than all the vehicle traffic in the whole city. "Upgrading these buildings to cleaner heating fuel is the single largest step New Yorkers can take to solve local air pollution,” Fred Krupp, president of Environmental Defense Fund, said in a statement.

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Should Fighting Hunger Be a Franchise Business?

Despite the occasional controversy, two social enterprises are using the Coca-Cola model to fight hunger in Africa.

A child in El Salvador holding a Plumpy’nut meal

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Women Funding Women Opens the Door to Responsible Investing

A new impact investment fund targets women and lowers the financial burden of making responsible investments—a WIN-WIN.

Maggie works at Cake Love, a business that has benefited from the Calvert Foundation's impact investing.

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Micro-Bias: If You Want a Kiva Loan, It Helps to Be Pretty and Light-Skinned

Micro-lending sites like Kiva are an important development tool, but bias is affecting lending choices. Here's how to fix it.

Want to cash in on the surge in online peer-to-peer lending? As with many things in life, it helps to have a pretty smile. Sadly, it also helps to have lighter skin.

People who lend on Kiva.com tend to favor attractive, light-skinned females, according to an analysis set to be released by researchers at Nanyang Technological University in Singapore. To receive a loan online, it’s better to be pretty than ugly, female than male, skinny than fat and, yes, light-skinned than dark-skinned, the researchers found. “So, basically if you have any of these characteristics, you will get your money more quickly on Kiva.com,” says Walter Theseira, the lead author of the study.

Kiva allows internet users to browse candidates for charitable microloans around the world, sort by country or type of project, and then—while viewing a picture of the potential borrower—click a few buttons to lend to a microfinance agency supporting that individual. Kiva recently launched a pilot that allows users to lend directly to borrowers without the middleman, but the study focused exclusively on the main Kiva site.

Theseira conducted the study with Christina Jenq at the University of Chicago’s Booth School of Business and Jessica Pan at the National University of Singapore. The researchers used a skin color scale used in research on bias against new immigrants and found conclusively that lighter-skinned borrowers got loans faster. Being attractive was even more helpful.

“This is why [NGOs] spend so much time choosing just the right photographs to illicit donations,” Theseira says. People respond more, and with donations, to pretty, smiling faces. But “as for why people do that... it’s a bit hard to say,” he cautions. “Our hypothesis is this is probably more a form of implicit discrimination than people acting on explicit bias.”

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Can Anyone Make A 'Netflix for Baby Clothes' Work?

Collaborative consumption business models meet their test in the hyper-competitive baby clothing sector.

Sharing isn’t a simple way to earn a living, and barter is a tricky business, but one cute little market—baby clothes—turns out to to be a tough proving ground for collaborative consumption business models. Now a new company, GoodKarma, is entering the tot market with high hopes.

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