The San Diego County Board of Supervisors unanimously directed staff to evaluate a philanthropic model to raise private funding for public health and safety programs.
The “Pay for Success” model gets private investors to provide upfront financing to community organizations and local governments that are willing to try new approaches to delivering services to the public.
“If these new approaches are successful in helping people, the investors may recover their capital or reinvest it back into the program,” Supervisor Greg Cox said. “It’s a way to leverage philanthropic dollars while minimizing risk to the public and saving taxpayers dollars.”
If a new way of providing a service works, the government will pay back the investors with a small amount of interest, according to a staff report.
Cox said the model has been successful in Massachusetts, New York and Utah, and is being tried in other places. The White House is providing technical assistance, he said.
Supervisor Ron Roberts called Pay for Success an “exciting new tool” for the county.
“We can use it to encourage new approaches to longstanding problems like juvenile delinquency and homelessness,” Roberts said.
“Typically, government contracts out services with the intent of garnering beneficial outcomes with a limited guarantee of results,” Roberts said. “The Pay for Success model removes the risk of funding of failure, or of marginal success. Only if the arrangement meets predetermined outcomes will tax dollars be spent.”
The staff report said Pay for Success has been used for early-childhood education and programs to rehabilitate ex-cons.
—City News Service
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