Pay For Success: New Capital For Evidence Based Programming / Justice Center, Council of the States

Pay for Success: New Capital for Evidence-Based Programming December 2, 2014 John K. Roman, Ph.D. Senior Fellow, Jus:ce Policy Center, Urban Ins:tute Jennifer Stoff, MPP Senior Program Officer, Social Innova:on Fund Corpora:on for Na:onal and Community Service Deirdre O’Connor, LCSW Senior Program Specialist, Na:onal Council on Crime and Delinquency Stephanie Mercier, M.S.W, M.B.A. Senior Program Manager, Corpora:on for Suppor:ve Housing Angela Tolosa, J.D. Deputy Program Director, Na:onal Reentry Reentry Resource Center, Council of State Governments Jus:ce Center Today’s PresentaDon Overview 1. Introduc:on to CSG Jus:ce Center 2. Speaker Introduc:ons 3. Overview of Social Impact Bonds/Pay for Success 4. Overview of Social Innova:on Fund (SIF) program 5. Na:onal Council on Crime and Delinquency’s SIF project 6. Corpora:on for Suppor:ve Housing SIF’s project 7. Ques:ons & Answers Council of State Governments Jus:ce Center 2  Council of State Governments JusDce Center • Na:onalnon-profit,non-par:sanmembershipassocia:onofstate government officials • Engagesmembersofallthreebranchesofstategovernment • Jus:ceCenterprovidesprac:cal,nonpar:sanadviceinformedby the best available evidence Council of State Governments Justice Center  The NaDonal Reentry Resource Center • The NRRC is a project of the CSG Jus:ce Center and is supported by the Bureau of Jus:ce Assistance. • NRRC staff have worked with nearly 600 SCA grantees, including 40 state correc:ons agencies. • The NRRC provides individualized, intensive, and targeted technical assistance training and distance learning to support SCA grantees. hep://csgjus:cecenter.org/nrrc/ ü Please register for the monthly NRRC newsleeer at: hep://csgjus:cecenter.org/subscribe/ ü Please share this link with others in your networks that are interested in reentry! Council of State Governments Jus:ce Center 4 Council of State Governments Justice Center 4  Pay for Success: New Capital for Evidence-Based Programming Presenters: John K. Roman, Ph.D. Senior Fellow, Jus:ce Policy Center Urban Ins:tute Jennifer Stoff, MPP Senior Program Officer, Social Innova:on Fund, Corpora:on for Na:onal and Community Service Deirdre O’Connor, LCSW Senior Program Specialist Na:onal Council on Crime and Delinquency Council of State Governments Jus:ce Center 5  Pay for Success: New Capital for Evidence-Based Programming Presenters: Stephanie Mercier, M.S.W, M.B.A. Senior Program Manager, Corpora:on for Suppor:ve Housing Moderator: Angela Tolosa, J.D. Deputy Program Director, Na:onal Reentry Resource Center, Council of State Governments Jus:ce Center Council of State Governments Jus:ce Center 6  Next: Social Impact Bonds/Pay for Success Overview John K. Roman, Jus<ce Policy Center, Urban Ins<tute 1. Introduc:on to CSG Jus:ce Center 2. Speaker Introduc:ons 3. Social Impact Bonds/Pay for Success Overview 4. Social Innova:on Fund (SIF) Program Overview 5. Na:onal Council on Crime and Delinquency’s SIF project 6. Corpora:on for Suppor:ve Housing’s SIF project 7. Ques:ons & Answers Council of State Governments Jus:ce Center 7  What is Pay for Success? • New financial instrument to support discre:onary social programming – Brings evidence-based programs to the necessary scale • Can support programs that: – Involve significant start-up costs but long-term savings – Serve large popula:ons – Involve poli:cal or programma:c risks • PFS addresses these programs with private capital – Offers an investment return if the program meets performance goals – Government only pays for successful outcomes • Some:mes called “social impact bonds” – PFS does not operate like a bond Council of State Governments Jus:ce Center 8  How Does Pay for Success Work? • An intermediary selects an evidence-based program • The program is supported with private capital solicited by the intermediary • The intermediary: – Oversees program implementa:on – Ensures model fidelity • Anindependentevaluatordeterminesiftheprogramhas met performance targets • Governmentpaystheintermediaryforsuccessfuloutcome 9  The Structure of Pay for Success Intermediary 10  Pay for Success: OpportuniDes in JusDce • Pre-Trial Processing – Pre-trial risk assessments can save money by diver:ng low risk offenders from jail – Upfront investment is needed to train officials on assessment tools • Reentry – The therapeu:c community programs can have beneficial effects on recidivism and substance abuse ü Start-up requires developing counseling, employment, and job training services 11  Pay for Success: OpportuniDes in the Adult JusDce System • Proba:on – Electronic monitoring can save money and reduce vic:miza:ons ü Implementa:on infrastructure (equipment, IT support, etc.) is costly • Adult Diversion programs – Drug courts and community supervision can preserve public safety while reducing costly secure confinement ü The training, addi:onal technical assistance, and staff required to effec:vely implement diversion programs has significant upfront costs 12  Pay for Success: OpportuniDes in Juvenile JusDce • Juvenile Jus:ce – Family-based interven:on and preven:on programs can prevent delinquent conduct and reduce recidivism ü Implemen:ng these programs requires start-up investment to train local staff • Adolescent Diversion – Adolescent diversion from secure confinement has been found to have a very large cost-benefit ra:o ü Training and project implementa:on impose significant upfront costs 13  Pay for Success: Advantages and Drawbacks Advantages Drawbacks • Government transfers risk • Local service networks are developed or scaled • Addresses the “wrong pockets” problem • Allows agencies to pool resources and knowledge • Significant flexibility to deploy programs across jurisdic:ons or regions • Requires significant exper:se from mul:ple fields • Complex to execute • Could limit non-profit innova:on by focusing on programs with a proven track record • May simply reallocate exis:ng impact and philanthropic capital rather than drawing new capital 14  Pay for Success: Strategic Planning • PFS relies on good strategic planning to maximize cost effec:veness • Before star:ng a program jurisdic:ons should: – Iden:fy popula:on and cost drivers – Iden:fy the problems that generate these drivers – Find evidence-based solu:ons to the problem – Determine if the evidence-based solu:on is PFS-compa:ble • Government should iden:fy a research partner to assist with this process • Jus:ce program databases can inform implementa:on: – OJP’s Crime Solu:ons – WISIPP – Vanderbilt University Peabody Research Ins:tute – Blueprints for Violence Preven:on – The Urban Ins:tute’s Meta CBA analyses for DCPI – Na:onal Reentry Resource Center’s What Works in Reentry Clearinghouse 15  Building PFS in 5 Steps • PFS projects should target jus:ce system “inefficiencies” – Example:prisonpopula:ondrivers • Once drivers are iden:fied, PFS is developed in 5 steps: Strategic Planning Price the Develop Evaluate the Product Infrastructure Program 12345 Make the Deal Deliver Service and TTA 16  Step 1: Price the Product • Use cost-benefit analysis (CBA) to determine: – Serviceinfrastructureandcapitalneeds – Performancetargets – Probabilityofprogramsuccess ü Return rates – Governmentsavings(recoverableandnon- recoverable) • Meta-CBA provides the best es:mates – Uncertainty deters investors, risk does not – Meta-CBAModels: ü Urban’s DCPI model ü The Washington State Ins:tute of Public Policy (WSIPP) model ü Pew’s Results First 17  Step 2: Make the Deal • Iden:fy investors, providers, and government partner • Determine if sufficient infrastructure exists to deliver the interven:on – Non-profits are open key jus:ce system service providers • Determine project management and incen:ve structure – Get all partners to sign onto contract 18  Step 3: Develop Infrastructure • Coordinate direct service – Develop service infrastructure (staff knowledge, IT, etc.) – May require building new infrastructure or enhancing exis:ng infrastructure • Determine technical assistance needs 19  Step 4: Deliver Service and TTA • Deliver TTA and service to the target popula:on • TTA helps providers sustain services past the life of the project • The intermediary ensures program model fidelity • The PFS contracts provide safeguards so that PFS does not interrupt service delivery 20  Step 5: Evaluate the Program • Evaluate the program and determine success – Determine if local organiza:ons can perform the evalua:on – Find ways to promote evalua:on transparency • For ini:al evalua:ons RCT is the best design – RCTs build knowledge about what works in criminal jus:ce – Evalua:on costs are primarily a func:on of data availability, not evalua:on design 21  Future of Pay for Success • PFS efficacy depends on maintaining a research emphasis • Broad adop:on of PFS will be a learning process – Governments, for-profits, and non-profits learn how to collaborate – PFS offers a new instrument for sharing resources and benefits 22  Social Impact Bond Resource Center • Urban Ins:tute created a roadmap of tools for helping governments implement pay for success projects. Visit hep://www.urban.org/socialimpactbonds/ – Find execu:ve summary at hep://www.urban.org/publica:ons/ 413149.html – Find overview presenta:on at hep://www.urban.org/publica:ons/413151.html Council of State Governments Jus:ce Center 23  Next: Social InnovaBon Fund Program Overview Jennifer Stoff, Social Innova:on Fund, Corpora:on for Na:onal and Community Service 1. Introduc:on to CSG Jus:ce Center 2. Speaker Introduc:ons 3. Social Impact Bonds /Pay for Success Overview 4. Social Innova:on Fund (SIF) Program Overview 5. Na:onal Council on Crime and Delinquency’s SIF project 6. Corpora:on for Suppor:ve Housing’s SIF project 7. Ques:ons & Answers Council of State Governments Jus:ce Center 24  Social Innova<on Fund Program Overview Jennifer Stoff, Social Innova:on Fund, Corpora:on for Na:onal and Community Service As part of the President’s vision for building a smarter, more effec:ve government, Pay for Success (PFS) has emerged as an approach for government to partner with the private sector to fund proven and promising prac:ces. PFS is an innova:ve contrac:ng and financing model that leverages philanthropic and private dollars to fund services up front, with the government paying aper they generate results. This strategy has gained strong bi-par:san support in Congress as a strategy for increasing return on taxpayer dollars while improving the quality of services provided in our communi:es. Council of State Governments Jus:ce Center 25  The Social InnovaDon Fund Pay for Success Program aims to: • Strengthen and diversify the pipeline of governments and nonprofit organiza:ons that are prepared to engage in PFS projects • Assess the poten:al of PFS to address a variety of social issues rela:ng to diverse popula:ons in diverse geographic contexts • Aeract capital to high-performing ins:tu:ons seeking to strengthen, grow, and sustain effec:ve solu:ons for challenges facing low-income communi:es Through two approaches: 1) Provide Technical Assistance to Assess Feasibility and Develop PFS Capacity 2) Structure PFS Transac:ons. These ac:vi:es will contribute to the infrastructure necessary to implement future PFS projects. Council of State Governments Jus:ce Center 26  2014 Social InnovaDon Fund Pay for Success grantees • CSH (Corpora:on for Suppor:ve Housing) • Green & Healthy Homes Ini:a:ve • Harvard Kennedy School Social Impact Bond Lab • Ins:tute For Child Success, Inc. • Na:onal Council on Crime and Delinquency • Nonprofit Finance Fund • Third Sector Capital Partners, Inc. • University of Utah David Eccles School of Business PFS Lab Grantees will be releasing compe<<ons between November 2014 – March 2015 Council of State Governments Jus:ce Center 27  Next: NaBonal Council on Crime and Delinquency’s SIF Pay For Success Project Deirdre O’Connor, Na:onal Council on Crime and Delinquency 1. Introduc:on to CSG Jus:ce Center 2. Speaker Introduc:ons 3. Social Impact Bonds/Pay for Success Overview 4. Social Innova:on Fund (SIF) Program Overview 5. Na:onal Council on Crime and Delinquency’s SIF project 6. Corpora:on for Suppor:ve Housing’s SIF project 7. Ques:ons & Answers Council of State Governments Jus:ce Center 28  NaBonal Council on Crime and Delinquency NCCD promotes just and equitable social systems for individuals, families and communi:es through research, public policy and prac:ce. Oakland, CA Madison, WI Washington D.C. Council of State Governments Jus:ce Center 29  Racial Disparity in Child Welfare and Juvenile JusDce • Na:onwide, African Americans are more than twice as likely to enter foster care as white children • Data demonstrates disparity for youth of color at every decision point in the juvenile jus:ce system • Youth who experience foster care or juvenile jus:ce systems also experience higher raters of nega:ve life outcomes Council of State Governments Jus:ce Center 30  NCCD’s Pay for Success Opportunity • One of eight Social Innova:on Fund PFS grantees • Three jurisdic:ons will be selected • PFS feasibility assessment technical assistance • Posi:ve youth development interven:on • Goal of reducing racial disparity Council of State Governments Jus:ce Center 31  Timeline for NCCD’s RFP PFS Feasibility Assessment TA Council of State Governments Jus:ce Center 32  Eligible state, local and tribal governments and non-profits CA, CT, DC, IL, MA, MN NE NJ, NY, PA, RI WI Council of State Governments Jus:ce Center 33  Thank you! For more informa:on Deirdre O’Connor doconnor@nccdglobal.org www.nccdglobal.org  Next: CorporaBon of SupporBve Housing SIF project Stephanie Mercier, Corpora:on for Suppor:ve Housing 1. Introduc:on to CSG Jus:ce Center 2. Speaker Introduc:ons 3. Social Impact Bonds/Pay for Success Overview 4. Social Innova:on Fund (SIF) Program Overview 5. Na:onal Council on Crime and Delinquency’s SIF project 6. Corpora:on for Suppor:ve Housing’s SIF project 7. Ques:ons & Answers Council of State Governments Jus:ce Center 35  CorporaDon for SupporDve Housing (CSH) CSH advances solu:ons that use housing as a platorm for services to improve the lives of the most vulnerable people, maximize public resources and build healthy communi:es. Council of State Governments Jus:ce Center  SupporDve Housing: An IntervenDon that Works • Targets households with barriers to housing and/or employment • Is affordable • Provides tenants with leases • Engages tenants in flexible and voluntary services • Coordinates among key partners • Supports tenants in connec:ng with the community Council of State Governments Jus:ce Center  Evidence for SupporDve Housing • 79% to 83% stay housed one year or more • 41% to 67% decrease in Medicaid costs • 40% reduc:on in jail days • Reentry suppor:ve housing pilot with Ohio Department of Rehabilita:on and Correc:on (ODRC): – 60% less likely to be reincarcerated – 40% less likely to be rearrested for any crime. • Study in Denver among chronically homeless individuals: – 76% reduc:on in the number of days spent in jail. Council of State Governments Jus:ce Center  CSH and the SIF Pay for Success Program Awarded $750,000 from CNCS over three years Selecting up to 12 grantees Focused on jurisdictions interested in exploring feasibility of a PFS initiative focused on supportive housing and vulnerable populations Will select 4-6 Sub-Recipients in First Round Government and/or non-profit organizations are eligible to apply Anticipated application release : December 2014 Anticipated application due date: February 2015 Council of State Governments Jus:ce Center  Feasibility Technical Assistance Convene multiple cross-department stakeholders Collect and analyze data to understand status quo costs Outline the structure for quality supportive housing Select housing and service providers Develop a financial model and framework Define project success with all stakeholders Create, publicize and issue RFPs Council of State Governments Jus:ce Center  Questions & Answers Council of State Governments Jus:ce Center 41  Thank you! The webinar recording and PowerPoint presenta:on will be available on www.csgjus:cecenter.org within a week. This material was developed by the presenters for this webinar. Presenta<ons are not externally reviewed for form or content and as such, the statements within reflect the views of the authors and should not be considered the official posi<on of the Bureau of Jus<ce Assistance, Jus<ce Center, the members of the Council of State Governments, or funding agencies suppor<ng the work. To receive newsleTers and other announcements, please visit our website: www.csgjus<cecenter.org/subscribe Council of State Governments Jus:ce Center 42 Council of State Governments Justice Center 42