“What if there were a way to solve the country’s most intractable social problems—homelessness, crime or inequities in education, for example—without putting taxpayer money at risk? There might be.”
A couple of days ago, the Wall Street Journal published an article that addresses Pay For Success, a new innovative financing tool for social impact. Pay for Success allow government to test initiatives that pay upon outcomes and measured results, and “may have the potential to help governments address some of our nation’s most obstinate problems and score wins for everyone: the private sector, nonprofits, government at the local, state, and federal level, and most important, citizens across the country.”
The article spotlights New Profit’s good friends at Third Sector Capital Partners, as one of the two leading drivers of Pay for Success (the other being Social Finance U.S.). Third Sector launched the “Massachusetts Juvenile Justice Pay for Success Initiative” (MAPFS), which partnered with Roca Inc. – a Boston-based organization that has stunning success helping young men gain skills, placing them in jobs, and keeping them out of jail – as the social-service provider to deliver two years of services. If Roca delivers on its outcomes and the project is a success, those who have skin in the game will be repaid their investment. New Profit is proud to have collaborated with Third Sector Capital Partners in the development of MAPFS and to be a financing partner of this initiative. To view more about how New Profit is involved in the MAPFS, please click here.
New Profit has also been an avid advocate of the expansion of Pay for Success in the public arena; New Profit’s policy arm, America Forward, is working to advance Pay for Success models at the federal level through various legislative initiatives. One of the most exciting updates of America Forward’s work includes its influence in the development of the Workforce Innovation Opportunity Act (WIOA). America Forward worked closely with congressmen across both sides of the political isle to include a Pay for Success provision in the WIOA, which was recently signed into federal law in July. To learn more about America Forward’s work with Pay For Success, click here.
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