News of another webinar and some discussion of anti-recidivism SIBs today alongside an interesting discussion of the Indian SIB situation. It will be interesting to see how the economic reformist (and deregulating) government of newly elected PM Narendra Modi will approach SIBs. Certainly his credentials championing the free market suggest the Pay For Success model could be used to help Indian growth in what we can only hope is an era for a new Version 2.0 of the Hindu rate of growth on an altogether higher plane than the original slogan which suggested stagnation. After all Mr Modi while leading Gujarat state for more than a decade has achieved a rather breathtaking annual 10% growth rate…
Roca “Pay For Success” Program Under Way In Hampden County To Reduce Prison Terms, Boost Employment
Stephanie Barry – mass live
Roca is barely three months into their public and privately funded Pay-for-Success initiative in Hampden County, and is undaunted that their “commodities” have been largely rooted in failure.
Men 17 to 24 years old; multiple incarcerations or heading that way; substance abuse histories; domestic rancor – they are dealing with the highest of the high-risk, organizers admit. In fact, this is their wheelhouse. They embrace it and the goal of keeping these men from jail and prison.
“We’re built for being told to bug off,” said Roca founder and CEO Molly Baldwin, who began doing street outreach with gang members in Chelsea 26 years ago. “I don’t think most young people want to go to jail for the rest of their lives. I don’t think they want to die young.”
The pay for success model is part of a fledgling “social-impact bond” movement that has drawn the likes of the Goldman Sachs Group., other private investors, grants and state and federal funds totaling about $38 million for the Roca effort. However, Roca will not get paid unless their goals are met five years out. In the meantime, Roca has had to borrow against their predicted success, aiming to fund-raise $4.7 million on its own.
Neither Roca nor the taxpayers assume any of the risk. That falls to the investors.
The initial success of SIBs in India will require someone to play the role of bringing key stakeholders together; Investors with the appropriate risk appetite, Government Bodies with the right understanding to participate, and willing and progressive Service Providers (NGO) who can see through the effort to make it work. This role should be played by a financial intermediary with a long-term commitment to development, a DNA of ‘innovation’ and a capability to structure such a complex transaction.
While it may take time initially to convince the Government, SIBs clearly have immense relevance in this country and India may well go on to become the lead issuer of such Bonds once the process is established. This disruptive innovation can be given a big thumbs-up though local adaption to reduce costs of launching the Bond will remain key for its success in India.
A social impact bond (SIB), also known as a “Pay for Success” bond, is an innovative funding method that involves the collaboration of public, private, and nonprofit sectors to achieve cost savings and improve social outcomes. This webinar will discuss how SIBs work, early lessons learned from SIB projects in the UK and the US, and how SIBs can be used to help improve outcomes among youth involved with the juvenile justice system.
Date: May 27, 2014
Time: 1:00–2:00 p.m. ET
To register for this webinar, click here.
To learn more about social impact bonds, click here.
John K. Roman, Ph.D., Senior Fellow, Justice Policy Center, the Urban Institute