Private capital for public outcomes
Innovative partnerships for social impact
Earlier this year, we partnered with Living Cities to develop an infographic showcasing The Massachusetts Juvenile Justice Pay For Success Initiative. Carried out by Roca, a nonprofit that helps former offenders through education and training, the program aims to reduce recidivism among high-risk young men on probation in Boston and surrounding communities. The initiative brings together the Commonwealth of Massachusetts, Third Sector Capital Partners, Goldman Sach, Living Cities and other private and philanthropic funders. At $27 million over a 7 year period, the program is the largest investment of its kind.
What is Pay for Success?
Pay for Success programs, sometimes called Social Impact Bonds (SIBs), are an approach to leveraging capital to address longstanding social problems while reducing risk for government. The “bond” is a contract with the public sector that requires the government to only reimburse initiatives that achieve specific social outcomes. At its core, the SIB is a way for government to test new approaches to persistent social problems without taking on the risk that can come with innovation.
What makes PFS an innovative approach?
We’ve written before about the benefits of multidisciplinary thinking and effective cross-sector collaboration for GAIN. The PFS model is designed to bring together public and private sector groups around a common goal with specific social benefits. In the case of The Massachusetts Juvenile Justice Initiative, Roca will use the investment to provide services to approximately 924 high-risk young men formerly involved in the justice system. Traditional government contracts with service providers have focused on outputs like clients serviced and centers built.
Under the PFS model, success is measured in terms of outcomes. Roca projects that the PFS investment will reduce recidivism rate among their clients by 45%. This amounts to over 200,000 days of incarceration avoided, increased accountability on the part of Roca for their services and significant improvement in quality of life for Roca clients.
To learn more about the Pay for Success Initiative and why reducing recidivism is so important for communities, check out the infographic on Living Cities’ blog, The Catalyst!
