This is a summary. To read the whole story subscribe to BostonGlobe.com
Goldman Sachs, the New-York based investment firm known for managing the money of sovereign nations and millionaires, is betting on Roca, a Chelsea nonprofit that tries to keep young men out of jail.
Goldman Sachs, along with five local and national foundations are investing $18 million as part of an experiment in financing social services known as “social impact bonds.” If Roca meets its goals in reducing recidivism — the rate in which released offenders return to jail — the state will pay back these investors, plus a modest return.
If the nonprofit fails, the investors will lose nearly all their money. “This is a change in the way government does business for the better,” said Glen Shor, state secretary of Administration and Finance