ROCA Selected for New Social Investment Program

One of the state’s most innovative at-risk youth service providers has been selected to participate in a groundbreaking social investment program being implemented right now by the state.

Massachusetts will be the first state to implement the ‘pay for success’ model of social financing through a Juvenile Justice contract and ROCA of Chelsea will help lead the effort with two Social Innovation Financing (SIF) contracted partners.

The Patrick Administration sought to partner with social entrepreneurs to support youth aging out of the juvenile corrections and probation systems so as to assist them in making successful transitions to adulthood. The Juvenile Justice contract will be designed with the specific goal of reducing recidivism and improving education and employment outcomes over a six-year period for a significant segment of the more than 750 youth who exit the juvenile corrections system and the several thousand who exit the probation system annually.

ROCA Executive Director Molly Baldwin told the Record that the new program is very complex and unique – a brand new idea of investing in social services and reaping rewards from positive outcomes.

Baldwin said the good news in all of it is that the state is moving towards putting money in things that are proven to work, something ROCA moved towards several years ago in using data to find out what was needed and what was working.

“I think it is awesome that the state is moving towards outcomes,” said Baldwin. “You have to be able to see if you’re doing something that’s working and makes sense. How can you serve young people better if you don’t know what’s working best for them? We love working with young people and it’s an opportunity to get better at it and help more young people.”

Gov. Deval Patrick announced the initiative after two SIF contractors successfully bid on the state contract – Third Sector and New Profit Inc.

Third Sector Capital Partners is described as a non-profit organization that delivers strategic financial solutions in support of evidence-based programs that serve the nation’s most vulnerable communities. Using a customized and collaborative approach, Third Sector provides advisory services to governments, funders and service providers interested in exploring social innovation financing and nonprofit growth capital services. Third Sector will serve as lead Intermediary, in partnership with New Profit Inc., for the youth recidivism project.

“Our communities deserve to receive the most effective social services available, and innovative financing techniques can help make that happen,” said George Overholser, CEO and Co-Founder of Third Sector Capital Partners. “Third Sector is excited to build collective leadership around this new concept to generate better outcomes for Massachusetts’ most vulnerable populations.”

Social innovation is a new concept and one that isn’t altogether clear in how it will operate as it proceeds into implementation. The bottom line is that private funding partners will invest in certain social service agencies and will seek positive outcomes from those agencies to save the state money and recoup their investment.

A portion of that savings is also supposed to go to the agency, in this case ROCA.

Gov. Patrick said the effort is part of an ongoing effort to improve the way government does business. He said the performance-based investments will spur innovative solutions to social issues, achieve better outcomes and save money.

“These initiatives will help us invest in innovative methods to tackle challenging, long-term social issues,” said Governor Patrick. “Pay for success contracts are another tool to help us change the delivery of state services to both save money and improve program performance.”

The Administration said it hopes to have contracts fully negotiated by this fall. The concept was only approved a funded in the FY 2013 budget that Gov. Patrick signed into law on July 8.

Massachusetts is the first state in the nation to issue a competitive procurement to obtain services using social innovation financing. The state believes performance-based investments will help encourage innovation and tackle challenging social issues. New and innovative programs have potential for success, but often have trouble securing government funding because it can be hard to rigorously prove their effectiveness. Social innovation financing allows the government to partner with innovative service providers and, if necessary, private foundations or other investors willing to cover the upfront costs and assume performance risk to expand promising programs, while assuring that taxpayers will not pay for the programs unless they demonstrate success in achieving the desired outcomes.

ROCA’s nation-leading intervention model has, for 24-years, been successfully helping the most high-risk young people break the destructive cycles of poverty, violence and perpetual incarceration. Using data and performance measures to guide all its efforts, Roca’s model pushes young people to identify, confront and overcome destructive behaviors and learn the skills needed to re-engage and succeed in society, education, and the economy.

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