How Goldman Sachs Can Get Paid to Keep People Out of Jail

Goldman Sachs is investing $9 million in an effort to reduce crime in Massachusetts, using a financial product called a social-impact bond. If young men in the program — drawn from a pool of men the state believes are at "high risk" of incarceration — spend less time in jail than their peers, then Goldman stands to profit off its investment. If many of the men still end up behind bars, the bank will lose nearly everything it ventured. How the program works:

Published May 8, 2014

Sources: Roca Inc., Third Sector Capital Partners, Massachusetts Department of Administration and Finance, Harvard Kennedy School Social Impact Bond Lab