Massachusetts Gov. Deval Patrick on Wednesday announced what his administration is calling the biggest pay-for-success effort in the country to date, using private financing for a program to reduce recidivism among ex-convicts, Boston public radio WBUR reports.
Goldman Sachs and five other supporters will invest $18-million in the program led by Roca, a Chelsea, Mass., nonprofit that works to keep young male offenders from returning to jail, as nearly two-thirds now do. Pay-for-success efforts, also called social-impact bonds, use private money to test innovative social-service efforts, with investors promised a return if the programs meet data-driven goals.
Massachusetts has committed $27-million for repayments for the seven-year project and received an $11.7-million federal grant for the effort. The effort "will allow us to marry smart financial solutions with programs proven successful in helping high-risk youth become employed, stay employed, and break the cycle of violence," Mr. Patrick said.
Read a Chronicle of Philanthropy article about pay-for-success expanding to California.