Social Impact Bond to Enhance Rahat Students’ Math Achievement

In November 2018, the Israeli Ministry of Education (MOE) and the organization Social Finance Israel (SFI) established a Social Impact Bond of NIS 22 million entitled “Enhancing Math Achievements for Bedouin Youth,” toward advancing math matriculation exam scores among graduating high school students in the Bedouin city of Rahat.

A Social Impact Bond is an innovative approach to financing effective social programs. Capital invested in a specific social service program will be returned to investors by the government, or another stakeholder, if predetermined social outcomes are achieved. This approach presumes that directing resources toward addressing a social issue will ultimately reduce government expenditures by resolving a costly socio-economic problem, but achieving the desired outcome requires significant investment upfront.

For this new bond, the MOE committed to enhance math achievements and Hebrew proficiency among high school students in Rahat and committed funds based on the program’s expected costs plus payments to investors. The MOE and SFI, in consultation with international experts, quantified measures of success for this program. If these predetermined outcomes are achieved, the bond will ensure payment by the MOE to investors for their initial investment plus an expected 6 percent annual return. The program will be implemented via an outside organization to be selected in January.

This new bond addresses two intersecting national priorities: helping students from Rahat attain their academic potential so they have an opportunity to break the cycle of generations of poverty, and increasing the number of Israelis who have the skills needed to work in the high-tech industry. With Rahat students among the most disadvantaged in the country, and an increasing national recognition that Israel’s high-tech sector is facing a labor shortage, this Social Impact Bond has the potential to affect the Israeli economy in more ways than one.

The bond program will operate in all of Rahat’s seven high schools, including work with the students, teachers, parents and the Rahat Municipality staff, with the goal of significantly increasing the number of students matriculating at levels 4 or 5 of math (5 is the highest), as well as improving their level of Hebrew proficiency.

Math Challenges in Rahat

Rahat, the only Bedouin city in Israel, has more than 66,000 residents, constituting over 25 percent of all Negev Bedouin citizens. It is Israel’s poorest city and one of its youngest, with 55 percent of residents under age 19.

According to data by the Ministry of Education, the proportion of Rahat students matriculating at levels 4 and 5 in math is significantly lower than the national average, and even lower than in other Bedouin towns in the Negev:

Aligned with the Ministry of Education’s nationwide efforts to enhance matriculation levels in math, the rationale behind the new Impact Bond is to narrow educational achievement gaps, and thus eventually narrow economic gaps. According to research by the Taub Center from 2015, matriculation with high levels of math has been proven to be not only important for entering the high-tech industry and the “startup nation” economy, but is also directly correlated with income as an adult.

Program outline and expected results

The aim of the new Social Impact Bond is “to increase the number of students achieving levels 4 and 5 in their mathematics ‘Bagrut,’” the Israeli matriculation exam, with a secondary goal “to improve the level of Hebrew among students participating in the project so that they attain higher grades on their Hebrew matriculation exams.” To this end, according to the Ministry of Education, the new Social Impact Bond aims to create a city-wide model in Rahat that would enhance math matriculation levels in all seven high schools in the city. The program will serve as a pilot for future Ministry projects and enable replication of successful components among other disadvantaged communities.

Three grades of high school students will receive this enrichment program, from 10th through 12th grade, totaling five years of intervention aimed at raising the proportion of high school graduates in Rahat matriculating at levels 4 or 5 from the current 15 percent to at least 26 percent. An expected 1,200 students will participate over the coming five years.

The program includes the following interventions:

• Preparatory math summer camp for each cohort (summer between 9th and 10th grade, first one planned for summer of 2019).
• Enrichment activities throughout 10th-12th grades that include learning with technological tools, learning through experience, developing a picture of the future, increasing motivation to STEM, and individual and group study.
• Work with parents including increasing involvement and cooperation in learning processes and building awareness of the significance of STEM studies.
• Work with school staff and principals, including seminars and workshops, and incentives for schools and school competitions.
• Collaborate with Rahat Municipality, including the mayor, the head of the Education Department and the city treasurer. The Municipality is defined as a full partner in the program.

Learn more about this new Social Impact bond on Social Finance Israel’s website.