Nonprofit Quarterly provides a prickly view of SIBs based on a notion that apparently government is massively functional. Not living in America I cannot comment in depth at first hand but it is certainly not the case in the multiple other nations I have lived in – hence with funds running out, it is clear why there is bipartisan support for Pay for Success structures: or as our second article puts it: “Washington’s lack of focus on results, as much as anything, explains why our nation’s social programs have not made further progress in addressing perennial challenges that face low-income and at-risk Americans.”
Social Impact Bonds: Phantom Of The Nonprofit Sector
Rick Cohen – Nonprofit Quarterly
What issue could bring Senator Ted Cruz (R-TX) and Senator Al Franken (D-MN) into bipartisan partnership? Social impact bonds (SIBs)—or pay-for-success (PFS), depending on one’s preferred terminology. Both legislators have been effusive about the reauthorization of the Workforce Innovation and Opportunity Act (WIOA), and Franken seems to have made workforce development one of his top priority issues. A core component of WIOA noted by many of its supporters was the legislation’s $300 million commitment to pay-for-success programming aimed boosting effective, evidence-based efforts in job training.
For the two senators and most of the U.S. Congress, SIBs are real, immediate, substantive, and promising—enough to justify devoting hundreds of millions of dollars to pay-for-success programming on a range of social issues. For others, they are a public policy phantom, largely unproven but highly touted by some academics, a number of private foundations, and a bevy of consultants, and broadly endorsed by Republicans and Democrats, nonprofit service providers and for-profit entrepreneurs. As this issue of the Cohen Report explores, this potentially phantom program is getting serious consideration at the federal government level and in a variety of states.
A Safety Net That Works
Todd Young & John Delaney – The Washington Times
Every American can agree that too many government social programs fail citizens they are intended to serve. However, efforts to improve delivery of social services regularly degenerate into partisan arguments about funding levels.
The right accuses the left of spending inefficiently, while the left shoots back that the right doesn’t care enough to spend more. For generations, politicians of every political stripe have measured compassion by inputs into our social safety net, rather than gauging the outcomes of those Americans who have become trapped in it.
Washington’s lack of focus on results, as much as anything, explains why our nation’s social programs have not made further progress in addressing perennial challenges that face low-income and at-risk Americans — challenges such as chronic homelessness, recidivism, reintegrating the long-term unemployed into the workforce, and myriad public health issues. Today, we have an opportunity to recalibrate our focus on successful outcomes, while simultaneously driving more resources to these challenges and saving taxpayer money.
It might sound far-fetched, even a bit contradictory — how do you spend more and save more at the same time? Through the development of a new policy innovation called a social-impact bond, it’s possible.
First developed in the United Kingdom within the past decade, social-impact bonds are now widely used in that country. Slowly, they are being adopted at the state and local level in the United States. A few weeks ago, we introduced — with broad bipartisan support — the first detailed legislative proposal to adapt social-impact bonds for use at the federal level: the Social Impact Bond Act.