Last week, the U.S. Department of Labor announced two grant awards from the Workforce Innovation Fund to increase employment and reduce recidivism among formerly incarcerated individuals. The winning states are New York and Massachusetts, where a total of $24 million will be put to use in pilot pay-for-success programs.
I’ve blogged about pay-for-success, or social impact bonds (SIBs) before. This innovative financial structure is one way public, nonprofit, and private sectors can adapt to the new economic climate and collaborate to provide sustainable solutions with a measurable impact on society.
In the case of the New York and Massachusetts bonds, two great programs – the Center for Employment Opportunities (CEO) and Roca respectively – generate a financial return for private investors only once projects demonstrate they have achieved the targeted outcomes. Rigorous evaluation will determine if outcomes are met, while at the same time expanding the body of knowledge on what works to increase employment for greater numbers of people who are court involved, as well as demonstrating the feasibility and viability of this innovative finance model.
We hope these high profile pilots will pave the way for other states and localities to test their own versions of innovative financing for social and environmental services. There is a strong set of SIB deals already in the pipeline across the U.S., but most cities and states are starting from the basics. The infographic below is an easy way to get that conversation going, and Rockefeller Foundation grantees – like the Nonprofit Finance Fund – provide many of the much needed resources to carry that conversation forward. We look forward to seeing how this innovative concept spreads and greatly increases the reach and quality of critical services for our nation.
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InnovationFrom transportation to education, healthcare to tech-enabled ventures, here's where you think innovative finance can have the most impact.
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InnovationDay two of SOCAP continued in the spirit of great ideas and fascinating conversations on the future of innovative finance.
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