Also known as social innovation bonds, this funding can be used by governments to define a social outcome that it wants accomplished i.e. reduce recidivism for discharged person and pay the organization responsible for an outcome when it is achieved. For the first time, social innovation funds are being supported in the United States by President Barack Obama.
President Obama, Massachusetts Governor Deval Patrick, and New York City Mayor Michael Bloomberg all have plans to use these Pay-for-Success bonds as a means to address serious and expensive social issues. Patrick plans to use this unique funding source as a means to decrease chronic homelessness and support youth exiting the juvenile justice system?
The White House recently announced that the Department of Justice and the Department of Labor will support Pay for Success (PFS) pilots through 2012 funding competitions. The Department of Justice will consider programs that incorporate a Pay For Success model under their 2012 Second Chance Act grant solicitation process. Also, the Department of Labor will make up to $20 million available through the Workforce Innovation Fund for PFS programs that focus on employment and training. You can read details about this funding commitment in the White House Blog Post Here.
We know what we can do to end chronic homelessness in New Jersey – create more supportive housing and identify the most frequent users of emergency services to house in these units. Could New Jersey follow Massachusetts’ lead and issue social innovation funds to fund these initiatives?
Quoting the article:
In a world of tight budgets, it is more important than ever to make sure that taxpayer dollars are directed toward accomplishing outcomes rather than just funding activities. That is exactly what pay-for-success bonds ensure.