PFS Watch: Key Grantees Named for Federal Pay-for-Success Venture

The Corporation for National and Community Service (CNCS) has released a list of grantees that will work on pay-for-success projects with the lead entities selected by the agency last year.

Pay-for-success (PFS) projects shift the burden of social investment off the government and onto 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.

Many of the PFS projects being explored through the CNCS grants involve child welfare, juvenile justice and family health. Following is a list of the grantees selected to work with the lead entities:

The Corporation for Supportive Housing (CSH)
CSH received a $750,000 grant to support communities nationwide implementing supportive housing PFS projects. The projects will focus specifically on high-cost, vulnerable populations – homeless individuals, youth and families, and disabled residents of health care institutions who prefer to live in the community.

CSH will hold an open competition to identify up to 12 communities across the country who want to implement pay-for-success-financed supportive housing.

Grantees announced:

  • Ending Community Homelessness Coalition, Austin, Texas
  • New York State Department of Health, Albany
  • San Diego Housing Commission
  • State of New Mexico Human Services Department, Santa Fe
  • Volunteers of America Delaware Valley, Collingswood, N.J.
  • Washington State Health Care Authority, Olympia

Green & Healthy Homes Initiative (GHHI)
Green & Healthy Homes Initiative (formerly known as the Coalition to End Childhood Lead Poisoning) received a grant of $1 million to assess the feasibility of asthma-related PFS projects benefitting low-income children who suffer from the disease. GHHI is already engaged in this work through a partnership with the Calvert Foundation and a large local health system in Baltimore.

In 2015, GHHI will conduct a nationwide, open competition for healthcare organizations and nonprofit service providers that are constructing asthma-related PFS projects. One health care entity, acting as a private investor, and one service provider will be selected in five U.S. cities, for a total of 10 sub-recipients. Those selected will receive technical assistance from GHHI to advance their project.

Grantees announced:

  • Baystate Health in Springfield, Massachusetts, is a not-for-profit health care provider.
  • Le Bonheur Children’s Hospital in Memphis is a pediatric hospital serving the Mid-South region of Tennessee.
  • Spectrum Health Systems in Grand Rapids is a west Michigan integrated delivery system composed of an 1150-physician multi-specialty medical group (Spectrum Health Medical Group), 11 hospitals, including Helen DeVos Children’s Hospital, a community services organization (Healthier Communities) as well as other healthcare services.
  • University of Utah Health Plans is anacademic medical center, focusing on population management and that seeks to manage cost and quality of health care.
  • Monroe Plan for Medical Care in Pittsford, New York, is a not-for-profit entity founded in Rochester, NY, as a risk-bearing Independent Practice Association (IPA).  Monroe Plan will start assessing a project in the Buffalo area, with the possibility of expanding this project to the Rochester area in the future.

Harvard Kennedy School Social Impact Bond Lab
The SIB Lab will use its $1.93 million grant to provide technical assistance to ten local and state governments to build their capacity to pursue PFS projects. Two of the six grantees will be assessing the feasibility of an early childhood education PFS project.

Grantees announced:

  • State of Nevada, in partnership with Clark County and City of Las Vegas will explore innovative methods to provide children with early education. The three jurisdictions will engage in a feasibility study that will explore how an early childhood education PFS project can increase outcomes such as kindergarten readiness and third grade literacy as well as reduce public school special education and remedial education expenditures (in conjunction with Third Sector Capital Partners).
  • Commonwealth of Pennsylvania will explore a variety of possible areas for a PFS project, one of which is early childhood care and education.

Institute for Child Success (ICS)
ICS will use their $782,412 grant to provide support to organizations who are implementing early childhood PFS projects. The Institute has been a leader in this field. In 2014, ICS organized the first national conference on PFS early childhood programs. They also conducted a nine-month feasibility study in South Carolina examining Nurse-Family Partnerships.

With the CNCS grant, ICS will hold another conference in 2015. Participants for the conference will be chosen through an open competition. ICS will then choose twelve grantees to provide technical assistance over three years to develop their early childhood PFS project.

Grantees announced:

  • The City of Spartanburg, South Carolina will explore increasing access to high quality early care and education for children from birth to age five in low-income communities. The goal is to increase the number of children who are ready for kindergarten, increase the levels of reading and math proficiency, and also increase high school and post-secondary graduation rates, while (as a result) reducing expenses paid on remediation, including special education services.
  • Sonoma County, California will explore expanding access to high quality preschool (for a largely rural population) toward the end of reducing grade retention, absenteeism, and the need for special education. The county is also planning to expand Nurse-Family Partnership (NFP) programs, this initiative will explore outcomes such as reductions in child abuse and neglect, reductions in child arrests, and reductions in behavioral and intellectual problems at age six.
  • State of Connecticut’s Office of Early Childhood will explore the expansion and implementation of the Positive Parenting Program (Triple P) across the entire state. The feasibility study will assess if the expansion is likely to prevent problems in early childhood such as maltreatment, and enhance the well-being of children.
  • The State of North Carolina is seeking to expand the Nurse-Family Partnership (NFP) program and Reach Out and Read program, with the goal of improving wellness outcomes for children and families and improving literacy development.
  • Washington State Department of Early Learning and Thrive Washington will focus on scaling Home Visiting programs across the state such that a higher number of at-risk families could be served (in conjunction with Third Sector Capital Partners).

National Council on Crime and Delinquency (NCCD)
NCCD was awarded $863,959 to assess the feasibility of pay-for-success projects in jurisdictions from states with the highest rates of racial and ethnic disparities. Those states are Wisconsin, California, New Jersey, Massachusetts, Connecticut, Illinois, Pennsylvania, New York, Minnesota, Rhode Island, Nebraska and Washington, D.C.

As The Chronicle reported earlier this year, NCCD is currently involved in two other PFS projects in California, along with co-SIF grantee Third Sector Capital Partners. They are conducting a feasibility study to assess the possibility of Sector Capital Partners’ two PFS projects, one focusing on restorative justice and the other focusing on prevention services for child welfare-involved youth to prevent juvenile justice system cross-over.

Grantees announced:

  • YouthStat, a program that identifies New Haven’s most at-risk students and brings together representatives from local agencies to help create a unique plan for them. Mayor Toni Harp initiated YouthStat after the shooting deaths of two teenagers last April. YouthStat has already identified 365 youths and received consent from guardians to craft plans for them.
  • Alternatives to Detention and Placement, operated by The Children’s Initiative in San Diego. The establishment of community alternatives was a major recommendation in the 2008 plan for counteracting juvenile disproportionate minority contact, which was published jointly by the Initiative and San Diego County.
  • One Summer Plus, run by Milwaukee nonprofit Community Advocates. The nonprofit established a pilot version of this violence-prevention project after visiting the original One Summer Plus in Chicago last summer.

Nonprofit Finance Fund (NFP)
NFP has received $3.6 million to advance late-stage PFS projects in a variety of geographic locations and social issues. NFP will work with governments and organizations that have near-term opportunities to implement pay-for-success projects that have already been deemed viable through feasibility assessments.

NFP is the only organization contributing to PFS projects in the later stages of implementation.

No grantees announced yet.

Third Sector Capital Partners
Third Sector Capital Partners, a PFS advisory firm, has received $1.9 million to provide states and local governments with technical assistance to implement PFS projects that focus on economic opportunity, healthy futures, and youth development.

In the coming months, Third Sector will hold an open competition to select approximately 10 sub-recipients across two cohorts to receive services valued at a minimum of $50,000.

Third Sector is currently partnered with NCCD to conduct feasibility studies in two California counties.

Grantees announced:

  • Austin/Travis County, Texas Health and Human Services Department proposes to focus on determining the feasibility of PFS for reducing teen pregnancies among Hispanic youth and improving birth outcomes among African Americans.
  • Center for Evidence-based Policy at Oregon Health & Science University, Marion and Multnomah Counties, and the national non profit Friends of the Children will work with Third Sector on three feasibility projects in the area of youth development and success, specifically early childhood and disengaged youth in the county and state justice systems.
  • Children and Families Commission of Orange County, California has received an accelerating pay-for-success technical assistance award to assess the expansion of the Bridges Maternal Child Health Network to achieve improved health outcomes for children and families.
  • State of Nevada, in partnership with Clark County, NV and City of Las Vegas will work to explore the use of pay-for-success in creating innovative strategies to improve social outcomes in early childhood education. Specifically, the three jurisdictions will engage in feasibility studies that explore how an early childhood education PFS project can increase outcomes such as kindergarten readiness and third grade literacy as well as reduce public school special education and remedial education expenditures.
  • Virginia Pay for Success Council (Virginia PFS) and Virginia Department of Health to explore PFS feasibility of prenatal home-visiting programs with the potential to improve medical, social and educational outcomes.
  • Washington State Department of Early Learning and Thrive Washington will work with Third Sector Capital Partners to conduct a feasibility study focused on scaling Home Visiting programs across the state focusing on at-risk families.
  • Year Up, Inc. in Boston, Massachusetts, will explore the PFS feasibility of the Professional Training Corps (PTC) Model for workforce development, which serves young adults who are disconnected from school and work.

University of Utah, David Eccles School of Business PFS Lab
The University received $1.15 million to expand their PFS lab within the James Lee Sorenson Center for Global Impact Investing at the University of Utah’s Business School. The lab will work with sub-grantees to build the PFS field in the western U.S., with an initial focus on the intermountain west. The grant will be used to expand,and increase awareness around PFS financing models.

No grantees announced yet.

Pay-for-Success Watch is mostly written by Chronicle Editor John Kelly and Money & Business Editor Judith Fenlon.

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John Kelly is editor-in-chief of The Chronicle of Social Change.