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Pay for Success

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Updated on: 9/25/2014 2:36 PM

FOR IMMEDIATE RELEASE            

April 30, 2014

 

Contact:  Gwendolyn Mitchell/Laurel Anderson               

             Office of Public Affairs                                

             408-299-5119                                            

 

County of Santa Clara Releases Request For Proposals for

Groundbreaking “Pay for Success” Project to Address Chronic Homelessness

Innovative project seeks agency to lead efforts to improve outcomes for homeless individuals while ensuring public dollars are spent efficiently and effectively

 

SANTA CLARA COUNTY, CALIF. – On April 21, 2014, the County of Santa Clara released a Request for Proposals (“RFP”) to identify the organization that will lead a pioneering effort to provide housing and supportive services to some of the neediest homeless individuals in the County.  Unlike traditional social service programs, this effort will employ a “Pay for Success” model under which the County pays for services if and when they deliver results – in this case the stability and wellness of homeless clients.  This multimillion-dollar Pay for Success initiative is the very first of its kind in California, and puts the County on the cutting edge of a national movement towards performance-based contracting for social services.

“The release of this RFP is a major milestone in our effort to direct County resources to programs that will deliver demonstrably better outcomes for the chronically homeless,” said Gary Graves, the County’s Chief Operating Officer. “It is our responsibility as a community to pursue new models that can help meet our most pressing social needs.”

Pay For Success contracts, sometimes called Social Impact Bonds, bring together nonprofit expertise in addressing social issues, private sector funding, and rigorous evaluation to transform the way governments respond to chronic social problems such as homelessness.  In a Pay for Success project, private funders assume financial risk by initially paying the providers to deliver services. Taxpayers may eventually pay for the program in the form of government “success payments” only if and when a third party evaluator determines that the initiative has achieved the desired outcomes.

This Project focuses on the chronically homelessness population in the County, a group that is defined not only by long periods living on the street, but also by serious mental illness or physical disability. On any given night, 7,631 people are homeless in the County, of whom 2,509 can be classified as chronically homeless.  This project will provide chronically homeless individuals with a combination of affordable housing and an array of supportive services, a combination that has been shown to significantly improve quality of life and to reduce reliance on very costly government-funded services such as emergency room care.

“This innovative effort brings together two key goals for the County – addressing homelessness, and ensuring that taxpayer dollars are spent on highly efficient and effective programs,” said County Board of Supervisors President Mike Wasserman.  “The businesses and nonprofits in our County are leaders in innovation.” 

Through this RFP, the County plans to identify a lead agency to lead, shape, and manage the project. 

“The County is approaching this effort strategically,” said Supervisor Dave Cortese, who advocated for the Pay for Success model. “We know there are organizations out there with the capacity to provide the comprehensive services the project will require.”

Proposals responding to the RFP are due on June 20th.  A Pre-bid Conference will be held on Thursday, May 1, from 3:00 p.m. to 5:00 p.m. The County will also be seeking private investors and philanthropic contributions to support this effort.  The full RFP, including Pre-bid Conference location, is available through BidSync, the County’s online procurement service, at http://bit.ly/1iFTJ6r.

 

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