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Public-private partnerships show new way to pay for success

Posted by Chad O'Connor  February 5, 2014 06:00 AM

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Ralph Bonano was living a life of crime on the streets of Chelsea. A high school dropout who was selling drugs, robbing people and participating actively in gang life, he had been arrested five times by the time he turned 17.

Ralph’s situation isn’t unique. In Boston and other cities around the country, repeat arrests and prison sentences (known as “recidivism”) for young-men are a singularly destructive challenge facing low-income communities. Only 35 percent of young men are able to find a job within a year of being released from jail in Massachusetts. Sixty-four percent of them go back to jail within five years. Their average sentence is close to two and a-half years, costing taxpayers more than $112,000 per inmate.

Recidivism is such a rusty gear in the poverty cycle that few entities have had the will, the resources, and the fortitude to confront it, particularly in an era of tight public budgets. Young ex-offenders simply disappear into the margins of society, where they find few opportunities and lots of negative temptation.

Fortunately, a small movement is afoot to address this issue, and Massachusetts is leading the way. Ralph is in the midst of a remarkable transformation thanks to Roca, a Boston-based nonprofit which has a strong track record fighting recidivism. Of the 115 high-risk young men who were in the advanced stages of Roca’s programming last year, 89 percent had no new arrests and 69 percent retained employment.

Expanding promising programs like Roca’s to scale is a critical bridge to long-term change, and last week, Governor Deval Patrick stepped forward and announced that the Commonwealth of Massachusetts and a group of private sector collaborators will use an innovative approach to doing just that with Roca.

With Ralph Bonanno by his side, Governor Patrick unveiled the Massachusetts Juvenile Justice Pay for Success Initiative, a seven-year, $27 million effort to expand Roca’s services that will be backed by Third Sector Capital Partners, Goldman Sachs, The Kresge Foundation, Living Cities, The Boston Foundation and, my organization, New Profit Inc.

The impact potential of this initiative is real and significant, and the “Pay for Success” angle is unique. This approach involves a fundamental change in the way we finance social service programs, which are under huge stress in this era of tight budgets. In the case of Massachusetts, the organizations above came to the table in response to a call from Governor Patrick with a funding proposal for expanding Roca’s services that took the upfront risk for funding the program out of the hands of the government, with reimbursement from the Commonwealth contingent upon the program meeting explicit goals.

This completely flips the script on social service funding and programming, and opens the door to even bigger innovation in the future. Not only do Roca’s young adults have a lot to gain here, but taxpayers and policymakers here and across the country do too. At the project’s target impact of a 40 percent reduction in days in jail, the project would generate $21.8M in budgetary savings to the Commonwealth.

Now is the time to be thinking differently about social innovation in this country. In the mainstream philanthropic and business communities there is more impatience than ever to make real sustainable progress. There is a demand to do better, faster. It is no longer enough to focus on effort and intentions. Our principal concern must be outcomes. With governments, like ours in Massachusetts, taking greater advantage of shifting the risk of making social change from the taxpayers to the private sector, together we are ready to make a difference.

We’ll let Ralph speak to the ultimate payoff of the Massachusetts initiative and the Pay for Success approach. In his remarks at the launch event last week, he said, “These days life seems to be going so well for me that sometimes it’s hard for me to believe. Two years ago if you asked me what my life would have been like in the future I would have never predicted the things I’ve been able to accomplish today.”

Tripp Jones is the Managing Director of New Profit Inc. , a nonprofit venture philanthropy and social innovation organization that provides funding and strategic support to help the most promising social enterprises increase their impact.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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