On a recent winter afternoon, the scene inside Dobrila Hasic-Botic’s preschool classroom in Granite, Utah, seemed typical of a high-quality pre-K. A 4-year-old in a poufy pink skirt recited the first letter of her name. A boy in jeans and a golf shirt drew shapes on a small whiteboard in his lap. And a 3-year-old with an infectious smile did a somersault on the rug.

But preschool in this struggling Utah district is far from ordinary. Granite is the first district in the nation to be financed by private investors who pay upfront for preschool seats, and make a profit if enough of the district’s “at-risk” kids succeed.

“These types of transactions enable private sector companies to be responsive to the requests from local/state government who have limited funding.”

The controversial financing tool, often referred to as a social impact bond, has allowed this cash-strapped district, one of five in the Salt Lake City area, to provide high-quality early education to thousands of poor 3- and 4-year-olds who might have otherwise stayed home.

Taxpayers in Utah favor lean budgets: Even though other states have moved towards state-funded programs, preschool remains a tough sell here.

Read more about the pay-for-success programs by Kyle Spencer at The Hechinger Report