In January 2014, the Commonwealth of Massachusetts announced its juvenile justice Pay for Success (PFS) initiative aimed at reducing recidivism rates among youth. In doing so, it became one of the first jurisdictions in the U.S. to launch a PFS initiative, also called a Social Impact Bond.
To learn more, we’re joined by one of the leading experts on Pay for Success approaches, George Overholser (@goverholser). He’s the CEO and co-founder of Third Sector Capital. He’s a co-author of two recent reports about the Massachusetts project, including a project brief and a summary of lessons learned so far. He’s also the co-author of the lead chapter of the issue of Community Development Investment Review that focuses on PFS financing.
As background, the Massachusetts PFS initiative is a partnership between the Commonwealth, the service provider (Roca, Inc.), the intermediary (Third Sector Capital Partners) and commercial and philanthropic funders. If the initiative proves to be successful based on an independent, rigorous evaluation, success payments will come from the Commonwealth, which has committed up to $27 million for this seven-year project, and from the U.S. Department of Labor, which awarded the Commonwealth a first-of-its-kind PFS grant of $11.7 million in 2013.