Austin-Travis County selected for potential 'Pay For Success' social funding model (Impact Newspaper)

by Joe Lanane 

Can federal government-issued bond money help impact social change?

That is what Austin and the rest of Travis County intends to learn as part of a federally funded grant that examines the potential benefits of “Pay For Success” funding models, which are bonds that only pay back private investors if the social programs they support deliver positive outcomes. That ensures tax dollars are only being spent on social programs that deliver results, said Matt Kouri, CEO of Greenlights, a nonprofit advocacy group that works with other social groups to create positive changes in Austin.

“This is huge for our community,” Kouri said in a statement. “As our recent research on Austin’s nonprofit community revealed, solving our region’s most complex social problems will take unprecedented, cross-sector collaboration and innovative new business models, both of which are exemplified beautifully in this Pay for Success model.”

Third Sector Capital Partners Inc., a nonprofit firm that works with government entities to address social needs, selected the Austin-Travis County area, as well as six other communities nationwide, to conduct a feasibility study to see if this area can support Pay For Success.

The Austin/Travis County Health and Human Services Department partnered with United Way for Greater Austin, Travis County Health and Human Services and Veteran Service, Central Health and Greenlights to lobby for the Third Sector study. United Way initiated the effort by forming a task force that explores innovative ways to address social issues in Austin, according to Leah Newkirk Meunier, United Way vice president of strategic programs.

“We are thrilled that this partnership of nonprofits and government agencies was selected to work with Third Sector, and we look forward to exploring the opportunity of advancing Pay for Success to reduce teen pregnancy and improve birth outcomes in our under-served communities,” Newkirk said in a statement.

The Austin-Travis County study will focus on whether a Pay For Success model could effectively scale existing programs that attempt to reduce teen pregnancies among Hispanic youth and another that seeks to improve birth outcomes among African-Americans.

A third Pay For Success feasibility study grant was received by Ending Community Homeless Coalition Inc., or ECHO, to consider expanding efforts to house vulnerable Austin populations. ECHO was one of six recipients nationally to receive grant money for a Pay For Success feasibility study through the Corporation for Supportive Housing.

“I am thrilled to hear that the Austin/Travis County Health and Human Services Department and its partners are recipients of this highly competitive Pay for Success feasibility study grant,” Austin Mayor Steve Adler said in a statement. “This is a step in the right direction to determine how our local government and philanthropic leaders can work together to improve social outcomes while saving tax dollars for the entire community. I look forward to supporting this initiative any way that I can.”

Feasibility studies typically take six to nine months, according to Kouri, who estimated partnering organizations receive somewhere between $250,000–$500,000 in grant money.