Pay for Success Pioneers: Lessons from Launching Multiple Projects (Nonprofit Finance Fund)

NFF: Congratulations on reaching contract with two projects that are going to make a significant difference in the lives of those in need in Salt Lake County.

Third Sector: Thank you! In developing its new Pay for Success Initiative, Salt Lake County took the unique step to concurrently address two complex issues with a profound, negative impact on the community. Launching the Criminal Justice PFS Project (R.E.A.C.H) and the Homelessness (Homes Not Jail) PFS Project in tandem, the County is changing the way it approaches these two highly inter-related issues. The two PFS projects will shift resources to where they are needed and where they can have the biggest impact. If successful, the County will minimize the service burden currently faced by the jail and emergency shelter, and in doing so will help more than 500 underserved, vulnerable individuals.

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EDF and TNC partner on new Environmental Impact Bond to fund coastal restoration (Environmental Defense Fund)

This week, EDF begins work to develop the nation’s second Environmental Impact Bond, with support from NatureVest’s new Conservation Investment Accelerator Program, the conservation investing unit of The Nature Conservancy. In collaboration with our partners, Quantified Ventures and Louisiana’s Coastal Protection and Restoration Authority, EDF will bring public, private and non-profit resources together to accelerate Louisiana’s coastal restoration and resiliency plans through a new Louisiana Coastal Wetland Restoration and Resilience Environmental Impact Bond.

Coastal wetlands are a form of “natural infrastructure” that provide storm protection by attenuating wave energy. Continual loss reduces these protective services, potentially increasing damage from a single storm by as much as $138 billion and generating an additional $53 billion in lost economic output from storm disruptions. If no actions are taken to restore and protect the coast, Louisiana could lose an additional 1,750 square miles of wetlands by 2060, posing a direct risk to as much as $3.6 billion in assets that support $7.6 billion in economic activity each year.

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Oklahoma governor praises efforts to reduce female incarceration (News OK)

Fallin praised the efforts of Women in Recovery, a Tulsa project of the George Kaiser Family Foundation and Family and Children's Services that provides intensive outpatient support for nonviolent offenders.

Oklahoma recently partnered with Women in Recovery through the Pay for Success plan, in which the state pays for every woman who successfully completes the program and stays out of Corrections Department custody.

The nonprofit is eligible to receive up to four payments of $5,646 per client if they stay out of trouble for 4.5 years after starting the program.

"We know in the state of Oklahoma, it costs around $30,000 a year to incarcerate a woman, but when you put them through (a program), it is a lot less because they come out in a shorter period of time and it's less expensive," Fallin told the audience.

Because the initiative is so new, there have not yet been any payments.

By keeping women out of prison and with their families, Fallin said, she hopes it will break the cycle of inter-generational incarceration. Studies show children with a parent in prison are five times more likely to end up behind bars.

"We believe it actually improves public safety because you're helping someone get back on their feet," Fallin said of diversion programs.

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Innovations in Pay for Success: Outcomes Rate Cards (Living Cities)

It’s been five years since the first Pay for Success transaction closed in the U.S. At Living Cities, we’ve been asking ourselves: “Five years later, what has Pay for Success (PFS) achieved and what does its future look like?” Our blog series will share reflections from us and our partners on new directions in PFS. Today we are featuring Social Finance. Follow our Pay for Success Newsletter for updates!

Social Finance has worked to develop and launch Pay for Success (PFS) projects since 2011, and during that time we’ve learned and evolved our work as we help to build the PFS field. One such evolution began several years ago when we became interested in the use of “outcomes rate cards.” The U.K. central government was using outcomes rate cards—an outcomes-based procurement method—to simultaneously launch many PFS projects. We believe that outcomes rate cards will play an important role in helping to scale PFS principles, and we have recently commenced technical assistance in Riverside County, CA and Connecticut via a national competition to develop the first outcomes rate cards in the U.S. We enter into this work excited about the potential of outcomes rate cards to improve outcomes for communities, but mindful of aspects of outcomes rate card development that will require thoughtful decision-making and collaboration across project stakeholders.

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Future of PFS: Bringing rate cards to the United States (Urban Institute)

Rate cards, due to their potential to standardize, simplify, and speed project development, may be appealing given the slow growth of the pay for success field in the United States: only 15 PFS projects have fully launched in the U.S. since 2013. Recent developments, such as the Outcome Rate Card Development Competition from Social Finance US, supported by Social Innovation Fund interest and investment, should spur work on how to apply rate cards in the US.

We’ve written about the possible advantages and limitations of the rate card model. Because the approach sidesteps rigorous evaluation, projects using rate cards may have difficulty concluding whether the results achieved happened because of the intervention or if they would have happened anyway. Another risk of the rate card includes “cream skimming,” where providers might focus recruitment on participants most likely to achieve the desired outcomes (and meet rate card targets) rather than work with populations that might need help the most. Potential rate card advantages include greater public clarity, a shorter development timeline, a less resource-intensive evaluation, and the potential to serve more people and launch multiple projects from one request for proposal (RFP).

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Richmond gets grant to help combat asthma issues in the area (WRIC)

By Mark Tenia

VIDEO INTERVIEW LINK

A federal program called the ‘Pay for Success Project’ awarded RCHD $350,000 to work with hospitals, researchers and local school systems to study and develop effective solutions to problems with asthma.

“Going to the emergency room or the hospital should be reserved for a situation of last resort,” Avula said.

A 2015 study found Richmond to be the second most challenging city in the country to live with asthma. Doctors say this grant could change that.

“Asthma can actually be controlled,” Avula said. “These kids can lead fairly normal lives if they’re just on the right medication and avoiding triggers and so that really takes everybody. That takes the schools, the families, the pediatricians out in the community and the folks at the hospitals.”

Dr. Avula says they’ll start rolling out plans within the next few months.

Environmental impact bonds: Next big thing for green investments? (Environmental Defense Fund)

The next big EIB project in the United States could take place in the Mississippi River Delta in Louisiana, where wetlands are disappearing at an alarming rate.

Louisiana’s $50 billion Coastal Master Plan includes natural infrastructure solutions, such as wetland restoration, as a central component to help address the state’s catastrophic land loss challenge. But the state is looking at a funding gap of potentially tens of billions of dollars.

We think EIB’s could be an important part of the solution: The Nature Conservancy just awarded a grant to Environmental Defense Fund to design an EIB to finance a coastal wetland restoration project in Louisiana, which could be a blueprint for other Gulf states and regions. 

The timing for such sustainable finance strategies looks good.

While still representing less than 1 percent of global investment assets, the impact investing sector is expected to grow tenfold from $77 billion to about $700 billion by 2020.

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Morgan Lewis Advises Jewish Vocational Service in Creation of Pay for Success Initiative (City Biz List)

Morgan Lewis partners Mark Stein, Carl Valenstein, and Anne Bandes and associate Rob Intile provided pro bono services for the Jewish Vocational Service (JVS), who, in conjunction with the Baker-Polito Administration and Social Finance, recently created the Massachusetts Pathways to Economic Advancement Project. The project is a Pay for Success (PFS) initiative that will help limited English speakers in Greater Boston make successful transitions to employment, higher wage jobs, and higher education.

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Public-private partnerships for ending poverty (South End News)

In Massachusetts, Gov. Charlie Baker continued his predecessor Deval Patrick's "pay-for-success" initiative by striking a deal with the local organization Jewish Vocational Service to provide educational services to immigrants and refugees. Under the terms, a group of philanthropic funders will front the cost of the program and if Jewish Vocational Service fulfills its goal of ensuring its students move into jobs with higher salaries within three years, the state will reimburse the investors and tack on additional funds so that they yield a profit. Should the program fail, investors absorb the loss at no cost to the taxpayer. As the Boston Globe recently editorialized, pay-for-success deals are "an innovative approach to paying for social-service projects that might otherwise languish amid tight state budgets."

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Reorienting government to achieve systems change (Urban Institute)

On June 22nd and 23rd, 2017, the Pay for Success Initiative hosted a National Symposium on the Future of Pay for Success in Washington, D.C. The invite-only Symposium brought together leaders from government, nonprofits, and organizations active in pay for success to consider the big questions facing the field, as well as highlight lessons for engaging in PFS efforts. More information on the Symposium can be found here.

Over the next several months, the Initiative will be releasing a series of blogs highlighting important conversations, themes, and questions that arose during the Symposium. To join the conversation, visit pfs.urban.org, follow @UrbanPFSI on Twitter, and subscribe to our monthly newsletter.

This is the third blog in the series.

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