No One Should Be A Commodity To Profit Goldman Sachs: Testimony Opposing Pay For Success Finance For Housing

Philadelphia City Council created a “Special Committee on Poverty Reduction and Prevention” on March 28, 2019 (resolution here), and with it the machine of human capital impact investing in our city of deep, deep poverty roared to life.

The purported goal of the committee is to create an action plan to lift 100,000 Philadelphians out of poverty by 2024, though how that will happen given stagnant wages and rising cost of living is unclear. See dismal workforce projections and plans to harness our education system to deliver a ten-dollar-per hour workforce here.

City Council commissioned a white paper, Narrowing the Gap, from HR&A Advisors, a New York real estate and economic development consulting firm, to inform the work. Resolve Philly/Broke In Philly (Solutions Journalism) boosters NBC Philadelphia (Comcast), Billy Penn, Al Dia, and PlanPhilly /WHYY provided, as supportive impact media partners will, expansive coverage of the development.

Three subcommittees have been set up: social safety net, education and workforce, and housing. A kick-off gathering of the full committee was held in October and hearings for each subcommittee are scheduled for November.

Transcript of the October 10, 2019 full committee hearing here.

Transcript of the November 18, 2019 “Safety Net Subcommittee” hearing here.

Below is video of testimony I gave at the November 25, 2019 Housing Subcommittee hearing held at Temple University Medical School. In seven minutes I make make clear my opposition to the poor being surveilled and transformed into data commodities to profit transnational global capital through pay for success contracts. If you are not familiar with pay for success, find out more here.

I express concern about Philadelphia’s municipal ID program, and how it could evolve into a “federated citizen” or digital identity system to track “impact” for the purposes of investors.

I note that we must understand Philadelphia’s deep poverty as the legacy of structural racism and recognize that continued automation of work will lead to a world of increasingly concentrated wealth and power. In this world those at the helm of the finance and technology sectors will rule over the masses through the Internet of Things, Big Data, and predictive analytics.

I state that pay for success finance is already being piloted in Philadelphia by Project Home, and that Sister Mary Scullion gave welcoming remarks at the first Total Impact conference in Philadelphia last year. Omar Woodard of the Green Light Fund was a speaker at this year’s gathering, and. Tayyib Smith, a Green Light Fund board member, serves on the housing subcommittee.

Making the poor jump through hoop after hoop on behavioral pathways to prove their worthiness to earn a right to have their basic needs met won’t fundamentally change our situation. Good behavior on the part of the poor won’t redistribute the resources of billionaires like Jeff Bezos, Mark Zuckerberg, and Bill Gates to those in need. In fact, pay for success finance is designed to enable the rich to make money off the misery of the poor. Dispossession is the raw material of impact investing. It is central to the enterprise.

At the end of my remarks I ask members of the subcommittee if they are familiar with the concept of pay for success. Councilwoman Maria Quinones-Sanches replied, “Yes, we’ve heard the term.” Remember that.

A partner in this initiative is the Reinvestment Fund, lead investor in several “pay for success” deals including the Welcome Home social impact bond in Santa Clara, CA, which I wrote about here, and the Family Stability program in Connecticut, which I wrote about here. The Reinvestment Fund collaborates with Palantir (predictive policing, ICE contracts) in their deal evaluation. See Santa Clara’s Data-Mining Deal With Palantir Draws Scrutiny From Privacy Advocates, covered by SanJoseInside in August of 2018.

I will continue to work on mapping those involved with this effort, but after reading this brief post, Philanthropy represented on new Philadelphia City Council Special Committee on Poverty Reduction and Prevention, there were immediate red flags including the participation of:

Bill Golderer “progressive” pastor of Arch Street Presbyterian Church and relatively new CEO of the United Way of Greater Philadelphia and Southern New Jersey (see collective impact and ALICE here).

Sidney Hargro of the Philanthropy Network, a planning partner in the Federal Reserve’s 2015 Capital for Communities event and stakeholder in the development of the city’s Out-of-School-Time network.

Pedro Ramos CEO of the Philadelphia Foundation, former member of the School Reform Commission, and advisor to ImpactPHL, an accelerator of the “impact economy.”

Andrew Frishkoff head of Philadelphia LISC, an initiative of the Ford Foundation spun off facilitate the redevelopment of distressed communities in the late 1970s. Note the Ford Foundation set aside a billion dollars of its endowment for impact investing in 2017.

Kristin Romens former program innovator for Big Brothers, Big Sisters who consulted for Bridgespan (Bain Capital’s non-profit impact investing consultancy) and now runs the Pew Fund, which is pouring money into pre-k, child mental health, and out-of-school-time learning-all impact investment sectors.

The final hearing, which will discuss education and workforce, is December 5, 2019 from 4 to 6pm at Dobbins High School, 2150 West Lehigh Avenue Philadelphia, PA 19132. To testify, you will need to email Andre Delvalle, Legislative Assistant to Councilmember Quinones-Sanchez, at andre.delvalle@phila.gov.

Below are the members of the Education and Workforce Subcommittee. Members of the full committee include Superintendent William Hite, formerly affiliated with merchant bank Ridge Lane, LP; Otis Hackney of the Mayor’s Office of Education to whom I protested about pay for success previously; and Dr. Donald Guy Generals, head of the Community College of Philadelphia a pilot for Digital On-Ramp human capital management programs described here.

JOBS AND EDUCATION SUBCOMMITTEE MEMBERS

Jessica Cunningham Akoto, KIPP Philadelphia Schools
Rafael Arismendi, Congreso
Steven Scott Bradley, The African-American Chamber of Commerce of PA, NJ, and DE
Malik Brown, Graduate Philadelphia
Rev. Bonnie Camarda, The Salvation Army
Katherine Clupper, The PFM Group
Carol de Fries, Community College of Philadelphia
Pedro Ramos, Philadelphia Foundation
Jennifer Rodriguez, Hispanic Chamber of Commerce
Esteban Vera, Jr., The Laborers’ International Union of North America Local Union #57
Rhonda Willingham, Menz Fit
Tara Williams, PA Department of Human Services
H. Patrick Clancy, Philadelphia Works Inc.
Otis Hackney, Mayor’s Office of Education
Yvette Nunez, The Chamber of Commerce of Greater Philadelphia
Alexandrea “Ali” Robinson-Rogers, The School District of Philadelphia

One thought on “No One Should Be A Commodity To Profit Goldman Sachs: Testimony Opposing Pay For Success Finance For Housing”

  1. Every community should have an advocate as savvy as you are, or an organized group to stop these financial windfalls for corporate interests. I do not know how you do it all.

    Big praise is on the way to you from Cincinnati, where the City Council is being sold a bill of goods on Tax Increment Financing districts that will advantage developers and diminish the tax base for public services, including public schools. This is not a new scheme, but new to our city. https://blog.iasb.com/2015/09/school-districts-can-be-harmed-by-bad.html

    Like

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