Partnering for Family Success

$5M Ohio 'Pay For Success' Targets Homelessness And Child Welfare Anne Field Anne Field Contributor Entrepreneurs This article is more than 2 years old. Cuyahoga County in Ohio, which encompasses the greater Cleveland area, spends about $50 million a year in foster care payments—the single largest area of the human services budget. That doesn’t even include staff and other support costs. Making a dent in those costs--and creating a more-effective way to help reunite children in foster care with their parents, while helping those formerly homeless families find housing—are the goals of a new Pay for Success (PFS) project just announced at a meeting held by the White House Office of Social Innovation and Civic Participation in Chicago. Also called Social Impact Bonds (SIBs), these financing mechanisms target longstanding social problems through a partnership between government, philanthropies, nonprofits, and private investors aimed at achieving measurable outcomes related to an intransigent issue, like recidivism or homelessness. Called The Partnering for Family Success Program, this new PFS project is all about improving the lives of children and families by reducing the time children of homeless parents spend in out-of-home foster care. The five-year, $5 million project is funded by a variety of private investors and philanthropies, including The Reinvestment Fund, The George Gund Foundation, The Cleveland Foundation, Sisters of Charity Foundation of Cleveland and Nonprofit Finance Fund. For each day of reduced out-of-home care, the county will pay back funders $75, which represents savings from the foster care system. FrontLine children FrontLine Service kids (photo credit: Barbara Pennington) The total amount to be paid back will be capped at $5 million. Ultimately, organizers expect to have a 25% reduction in costs. The services meant to help accomplish this goal will be provided by FrontLine Service, an Ohio nonprofit. Researchers from Case Western Reserve University will evaluate the outcomes. Today In: Entrepreneurs The sixth Pay for Success program in the U.S., this one is the first county-level initiative and first one focusing on homelessness and child welfare. FrontLine Service is basing the program on its Critical Time Intervention, which helps people with mental illness following discharge from hospitals, shelters, prisons and other institutions. In this case, FrontLine will work with mothers who have been in homeless shelters and have been identified by the Division of Children and Family Services as fitting the parameters of the program. PROMOTED Impact Partners BRANDVOICE | Paid Program Using The Right Tools For The Job UNICEF USA BRANDVOICE | Paid Program Fighting Ebola With Road Shows And Radio Spots In Burundi The Lenovo Smart Display Is On Sale For $169 More about the intervention: Before getting the child involved, FrontLine first works with mothers to find housing, apply for benefits and learn what is called “daily living skills”. To that end, the Cuyahoga Metropolitan Housing Authority will give the women what Liya Shuster, senior associate of Third Sector Capital Partners, which is acting as a government advisor and transaction coordinator, calls a “high priority preference” for two and three bedroom apartments. That’s vitally important, since kids aren’t allowed to go back to their families unless they’re living in a home. Then they work with the whole family to help to repair their relationship. Ultimately, for the whole thing to work, “The mothers have to feel there is someone they can trust and who can guide them,” says Susan Nerth, FrontLine’s executive director. For now, the effort is in the early phases of a 15- month pilot. It includes 18 families with 10 more in the process of signing on. The full-fledged program is due to start up in January with 135 families. Another 135 will receive the standard services and serve as a control group. (I know which cohort I’d rather be in). More about PFS (or SIBs), which I’ve written about before here and here. They’re a way for private investors to work with governments and nongovernmental organizations or other service providers addressing deeply rooted problems among low-income or vulnerable populations. The Pay for Success name relates to the fact that, if the project reaches its goal as determined by a third-party evaluator, the government pays back donors with a small profit. If those objectives aren’t reached, there’s no return. It’s also a lot less confusing than the term Social Impact Bond, since these babies aren’t really bonds. Ultimately, the program could have other, more lasting impact, by forging new relationships among nonprofits, government agencies and private funders. Says Mark McDermott, vice president and Ohio Market leader at Enterprise Community Partners, a national affordable housing nonprofit organization that is acting as the program’s project manager and fiscal agent: “That will be as important in the long-run as the financing mechanism.” Anne Field Anne Field I'm an award-winning journalist with a particular interest in for-profit social enterprise, as well as entrepreneurship and small business in general. I've covered those... Read More