Patrick backs social innovation financing

Focus will be on homelessness, juvenile crime

The Patrick administration said today it is pushing ahead with plans to use so-called social innovation financing to tackle chronic homelessness and reduce recidivism among juveniles transitioning out of the corrections and probation systems.

The financing, the focus of a What Works piece last summer in CommonWealth, would reward social service providers financially if they achieve agreed-upon goals. A press release issued by the Patrick administration said providers would be given “pay for success” contracts that would require taxpayers to pay up only if the providers “demonstrate success in achieving the desired outcomes.”

“It’s a creative idea based on a simple premise – have government pay for demonstrated success rather than the promise of success,” said Jay Gonzalez, the governor’s secretary of administration and finance, in a statement.

Administration officials said the contracts would be funded through government grants or through social impact bonds issued to investors. President Obama is also pushing federal funding for “pay for success” projects around the country.