Communities, with the aid of public and private resources, have long endeavored to overcome complex social problems such as homelessness, hunger, and lack of access to health care, among many others. These problems not only affect the lives of countless individuals and families, they erode our social fabric.
While the negative effects of these social problems on individuals and families is well-documented, what is less well known is their underlying financial cost. Overcoming challenges like homelessness require substantial funding, and all too-often, cash-strapped public agencies can do little more than plug holes in a perpetually leaky framework, never getting ahead of the problem.
What if local governments and nonprofits could receive upfront investments for innovative solutions that proactively address these challenges, use data to make smart choices, and stay accountable for results?
Salt Lake County’s Pay for Success program, in partnership with the Community Foundation of Utah, does just that. Targeting the interconnected issues of homelessness and recidivism, private and philanthropic funding is deployed to nonprofit service providers to implement data-driven solutions.
If the nonprofits reach program goals, as determined by an independent evaluator, Salt Lake County pays back the private investors in a “triple win” scenario: nonprofits receive the real funding they need to make headway on solutions, private investors get their money back, and government (and, by extension, taxpayers) saves money over the long-term as the need for social services decreases.
While the program is ongoing, initial signs are promising, as program participants have spent half as many days incarcerated and nearly half as many months without emergency shelter compared to individuals not participating in the program.
As a testament to the program’s innovative leadership, and philanthropy’s critical role in furthering effective solutions, the Community Foundation of Utah received the 2019 Secretary’s Award for Public-Philanthropic Partnerships from the U.S. Department of Housing and Urban Development for its role in Pay for Success, joining the likes of the California Community Foundation, Cleveland Community Foundation, and seven other leaders in philanthropy.
The inspiration behind Pay for Success comes from the commitment to overcoming social challenges more effectively and efficiently, creating a world where they are drastically diminished. Pay for Success serves as a hopeful message that through an infusion of creative thinking, aligned incentives and data-driven approaches, we can solve critical problems for the benefit of all.
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