Private investors would profit if recidivism goes down (Ventura County Star)

By Kathleen Wilson of the Ventura County Star

Private investors will profit if a Ventura County program aimed at reducing recidivism succeeds but lose their money if it fails.

Under what's called the "Pay for Success" model, investors will pay most of the cost of a $3 million program that will test treatment strategies for hundreds of adult offenders on probation. The investors would be repaid from public funds, but only if the program works, an official said.

"It eliminates the financial risk of government participation in these programs," said Christy Madden, senior deputy executive officer for the Ventura County government.

The county applied for and received a $1.5 million grant from the Board of State and Community Corrections. It's to be placed in a separate fund for the repayment to the investors. Along with Los Angeles and Alameda, Ventura was one of three counties in California to get the award.

On Tuesday, the Ventura County Board of Supervisors accepted the grant, which is being matched with $1.5 million in county funds. With the financing secured, county officials expect to start the five-year program in November.

The rate at which the 400 probationers in the program commit new crimes must be at least 10 percent lower than in a control group of the same size for the investors to recoup their money. The investors will get back their investment of roughly $2.6 million plus a profit of close to $260,000 if optimal results are achieved.

The recidivism program is designed for people who have been placed under formal probation because of the seriousness of their crimes. Probation officials said they could be people with convictions for theft, drug crimes or manslaughter connected with drunken driving; individuals convicted of sex offenses or domestic violence crimes are excluded.

These individuals have been sentenced in the county and are not offenders who have been released from state prison under Gov. Jerry Brown's corrections shift. The program, though, will incorporate strategies that have succeeded in a pilot program with the prison group.

Officials expect to contract with Social Finance, a nonprofit organization headquartered in Boston, to raise the money from private sources for the program. The investors could include banks, philanthropic organizations and investment pools, Madden said.

Interface Children & Family Services, a nonprofit agency based in Camarillo, is charged with delivering the services. Probationers who agree to participate will be offered a variety of strategies backed by research and that can be customized for each individual, county officials said. Most clients will receive help from caseworkers plus behavioral therapy designed to help them change their thinking patterns and attitudes, officials said.

The Pay for Success model has only begun to be tried in the United States, said Erik Sternad, executive director of Interface. If the venture succeeds, it will pay off for the probationers, their families and the public, he said.

County officials hope to save almost $4 million in costs for incarceration, supervision, court procedures and losses for victims over the life of the project.

About Kathleen Wilson

Kathleen Wilson covers county government and does investigative projects.