Submitted by TBorelli on Thu, 05/01/2014 - 1:39pm
Leaders, Projects Selected for California Pay for Success Initiative
SAN FRANCISCO – May 5 2014 – Five projects, organized by leaders exploring the Pay for Success model for funding social services, have been selected by Nonprofit Finance Fund to be part of the California Pay for Success Initiative.
The California Pay for Success Initiative, a new initiative from Nonprofit Finance Fund and The James Irvine Foundation, is designed to make the Pay for Success model a reality in California. The Initiative provides flexible funding and technical assistance with the goal of helping nonprofit and government leaders structure Pay for Success agreements in California over the next two years. Participants will form an active learning cohort to share their experiences, challenges and results in this work.
The January launch of the California Pay for Success Initiative was met with a high level of interest. City and county governments and social service providers applied for support for 38 different projects.
The five selected projects were chosen for their states of readiness and likelihood of closing an agreement during the next two years. They include projects that highlight promising interventions, as well as projects designed for governments to better explore the Pay for Success model, perform responsible and strategic due diligence and understand the implications of the model. They are:
- Center for Employment Opportunities (CEO) and REDF
Support from the Initiative will fund cost/benefit and program impact analyses in San Diego County
CEO and REDF are working to reduce recidivism and improve employment outcomes for formerly incarcerated individuals in San Diego County. Using life skills training, transitional work programs, job-placement assistance, and post-placement job counseling among high-risk probationers in San Diego County, CEO’s intervention targets the highest risk men and women coming home from incarceration to help with work entry. Already engaged as the service provider on a Pay for Success project in New York, CEO looks to scale its programs and leverage REDF’s expertise in social enterprise and workforce development within the state.
- County of Los Angeles
Subject to Board of Supervisor approval, Initiative funding would support the development of a County Blueprint for use by Los Angeles County Supervisors and executives in assessing and implementing potential Pay for Success opportunities
The County of Los Angeles is developing a blueprint that will serve as a roadmap for County executives in the selection of high-impact interventions. It will address administrative and contracting issues, highlight potential risk and mitigating factors as well as financial considerations that need to be addressed prior to launching any Pay for Success project.
- City and County of San Francisco
Support from the Initiative will go towards feasibility and cost-benefit analyses, as well as capacity-building within City and County government in San Francisco
The City and County of San Francisco is analyzing how the Pay for Success model could enable greater focus on preventative services that is aligned with the Mayor’s strategic priorities in workforce development, housing, public health and human services. Pay for Success presents an opportunity to address these key issues in an even more efficient way, reduce a portion of the higher costs of remediation services and provide better outcomes to individuals and communities. Jointly led by the Office of the Mayor and the Controller’s Office of Public Finance, this project has secured the support of several partner agencies within the City and County, local community partners and technical assistance providers.
- County of Santa Clara
Support from the Initiative will fund program design, deal structuring, evaluation, and capacity-building of participating service providers in Santa Clara County
The County of Santa Clara is pursuing two projects to reduce suffering and increase wellness for vulnerable populations—the chronically homeless and the acutely mentally ill. The program for the County’s chronically homeless population aims to provide 100 units of permanent supportive housing and supportive care over the next six years. The program for those with acute mental illness is geared toward providing quality care in a timely and effective manner. The County is in an advanced stage of project readiness, having already completed initial feasibility studies and landscape and cost-benefit analyses focused on how private financing can be leveraged to effectively utilize tax dollars and deliver significant social outcomes.
- Nurse-Family Partnership (NFP)
Support from the Initiative will fund an analysis of return on investment at the county level, as well as convening government and other stakeholders to scale its home visitation program in multiple Bay Area and Orange County locations
NFP is an evidence-based program that supports first-time mothers living in poverty by pairing them with a nurse who provides home visits from early in pregnancy until the child’s second birthday. The goal of the program is to improve pregnancy outcomes, child health and development, and life course development for the clients and their families. Drawing upon over a decade of field implementation and a national presence, NFP has demonstrated the ability to achieve improved pregnancy, child health and development, and family self-sufficiency outcomes, as well as significant government savings by supporting parents’ instincts to protect their children.
“We were impressed by the number of high-quality, outcomes-oriented projects underway across California where Pay for Success financing is being considered,” said Antony Bugg-Levine, CEO of Nonprofit Finance Fund. “Efforts to scale effective programs that address long standing social challenges, attract private financing to the social sector, and enable more effective use of tax dollars need and deserve support.”
Pay for Success is an approach to funding social services to both improve outcomes and ultimately reduce costs. In a Pay for Success agreement, private investors provide funding for preventative or interventional services up-front, and government reimburses these investors with a return on their investment, only if results are achieved. In doing so, private investors take on initial risk, governments only pay for outcomes, and cost-saving programs with demonstrated effectiveness have access to new funding from private sources. While Pay for Success projects are underway in a few other states, there are none yet launched in California.
“This initiative has unearthed tremendous interest among California leaders to experiment with Pay for Success,” said Don Howard, Interim CEO of the James Irvine Foundation. “These awards will support five of the most advanced efforts, helping those leaders hammer out agreements and test this innovative financing mechanism with the potential to scale high-quality, evidence-based, prevention programs.”
The $2.5 million grant from the James Irvine Foundation to Nonprofit Finance Fund provides flexible funding and expert support to help selected leaders structure Pay for Success agreements in California over the next two years. It additionally supports the creation of a learning community for these leaders, the regional and national technical assistance experts and intermediaries that will be engaged to explore Pay for Success opportunities, and philanthropically-minded investors and foundation leaders to share knowledge gained through these efforts with others across the state and country. For more information on the California Pay for Success Initiative, visit: www.nff.org/californiapfs. To learn more about Pay for Success, visit NFF’s PFS Learning Hub: www.payforsuccess.org.
About Nonprofit Finance Fund
Nonprofit Finance Fund (NFF) unlocks the potential of mission-driven organizations through tailored investments, strategic advice and accessible insights. Founded in 1980, NFF helps organizations connect money to mission effectively, and supports innovations such as growth capital campaigns, cross-sector economic recovery initiatives and impact investing. A leading community development financial institution with over $80 million in assets, NFF has provided over $300 million in loans and access to additional financing via grants, tax credits and capital in support of over $1.4 billion in projects for thousands of organizations nationwide. NFF is headquartered in New York City and serves clients from five offices across the country, including in Los Angeles and San Francisco.
About The James Irvine Foundation
The James Irvine Foundation is a private, nonprofit grantmaking foundation dedicated to expanding opportunity for the people of California to participate in a vibrant, successful and inclusive society. The Foundation’s grantmaking focuses on three program areas: Arts, California Democracy and Youth. Since 1937 the Foundation has provided over $1.3 billion in grants to more than 3,500 nonprofit organizations throughout California. With about $1.8 billion in assets, the Foundation made grants of $69 million in 2013 for the people of California.