New York State Releases Pay for Success RFP

Last Thursday, Adrian Bordone called attention to the Rockefeller Foundation’s and Harvard Kennedy School’s national SIB Lab competition, the Hudson Institute’s panel on benefits and concerns surrounding Social Impact Bonds, and Social Solution’s webinar on the developing Massachusetts Pay for Success contract. Today, Adrian shares a new Pay for Success (PFS) opportunity, as well as provides updates on last week’s discussions and a bit of context for PFS at the federal level.

Thanks Patrick – it really feels like things are getting moving on this Pay For Success effort.  For public sector program directors and for human services providers that can demonstrate their effectiveness, now is the time to be paying attention to Pay for Success initiatives. States such as Massachusetts, Minnesota, Connecticut, New Jersey, and most recently, New York, have all announced Pay for Success initiatives (some have already announced their chosen recipients). Providers such as Roca are well-positioned to seize this fantastic opportunity to prove the cost-savings that preventative human services program can create for public sector funders by helping individuals in need before that need results in more extensive, expensive services.

Public sector leaders should be setting the bar and scanning the landscape for high-performing human services providers who can predictably deliver on outcome targets.  If you use a PFS model, there is little downside risk to strengthening that relationship. If they don’t succeed, you don’t pay! The private sector bears the bulk of the risk when it comes to funding services until results are proven—with the expectation that the results will be proven, the provider will succeed, and they (the private sector investor) will receive the pay-out for reducing recidivism, homelessness, cases of asthma, etc. In the PFS model, you can report that you have expended taxpayer dollars exclusively on effective programming.

New York State RFP

On Tuesday, in New York State, this movement took another step forward when Governor Cuomo announced his plan to set aside 100 million dollars for health, education, juvenile justice and public safety programs to be funded by the PFS model. While New York City has already announced the recipients and begun outlining the details of its Social Impact Bond-style initiative, this is the first public step taken by New York State (beyond the initial RFI). I am eager to see how state and local PFS initiatives develop, as I and my colleagues at Social Solutions continue to assist government agencies, intermediaries, service providers and investors to identify, track and improve the outcomes that matter most to the individuals and families they serve.

Federal Opportunities

The momentum Pay for Success has gained at the state and local level is all the more impressive because of the attention it has received at the federal level. PFS is actually only one part of the Administration’s emphasis on utilizing evidence-based practice, measuring outcomes and managing performance through diligent use of relevant client data. For government agencies looking for a piece of the federal pay-for-performance pie, you’ve already missed your opportunity to participate in the first wave of DOL PFS funding via the Workforce Innovation Fund—but it’s not too late to apply for a Second Chance Act grant through the DOJ (deadline March 11).  Ten awards of up to $750,000 each will go to state and local governments, territories and tribes that can incorporate a PFS model into their reentry projects. These two grants represent a fraction of the nearly $110 million dollars requested in the 2013 Budget for PFS initiatives. I’ll continue to report on these funding opportunities here, so keep your eyes peeled for updates.

Helpful Resources

  • The DOJ has released a helpful FAQ for those interested in the BJA Second Chance Act grant mentioned above.
  • The Center for American Progress released an informative Social Impact Bond FAQ of its own late last year.
  • The recording of the Hudson Institute’s panel on Social Impact Bonds is now available on YouTube. The transcript should be available next week.
  • Social Solutions’ recent webinar with Roca, Nonprofit Finance Fund and Third Sector Capital Partners, and supporting resources, is now available.

I welcome any questions or comments you may have about Social Impact Bond/Pay for Success-style initiatives at demonstrating.outcomes –at- socialsolutions –dot- com.

Adrian Bordone, Social Solutions

This entry was posted in Pay for Success. Bookmark the permalink.