Massachusetts announced 'Pay for Success' social service program
August 03, 2012
As the first state to take the innovative approach to fundraising, Massachusetts recently announced that two initial areas will be funded through "Pay for Success" models. This means that both public and private investors will have the opportunity to fund programs they believe will be successful. To begin with, the state is looking to address chronic homelessness and juvenile justice.
"We need to invest in innovative ideas and strategies to tackle challenging, long-term social issues," said Governor Deval Patrick. "The results-oriented nature of Social Innovation Financing contracts will help us improve services and build a better Commonwealth for the next generation."
The Executive Office of Health and Human Service and the Department of Housing and Community Development have collaborated with the Executive Office for Administration and Finance (A&F) to begin negotiations with interested investors, such as Third Sector Capital Partners and New Profit, Roca and Youth Option Unlimited and United Way of Massachusetts Bay and Merrimack Valley. Following negotiations, the organizations hope to forge contracts in the fall.
As new and increasingly effective fundraising methods emerge, nonprofit organizations might realize they can use fund accounting
software to demonstrate their success with investments.