Note: This story was updated on June 4
Third Sector Capital Partners, a major intermediary for pay-for-success projects in the United States, has named two co-presidents from within its ranks to assist founder and CEO George Overholser.
Caroline Whistler helped Overholser found the organization, fresh off a Fulbright Fellowship in Brazil, in 2011. John Grossman worked in Massachusetts government for 15 years, 12 of them with the Office of the Attorney General.
Pay-for-success (PFS) projects shift the burden of social investment off the government and to private investors. Private sector investors front the capital for organizations to implement social programs.
The government only pays the initial investor back, with interest, if a specific set of outcomes are met. So, in essence, the government is now paying for outcomes and not services rendered.
Third Sector is involved in several of the seven PFS projects underway in the U.S. Among them: a project in Massachusetts to lower the re-incarceration rate of juvenile offenders in the state; and a project in Cuyahoga County (Cleveland) to lower foster care placements by providing support services to homeless parents.
Last year, Third Sector received $1.9 million from the Corporation for National and Community Service to provide states and local governments with technical assistance to implement PFS projects.
John Kelly is an editor for The Chronicle of Social Change.