SANTA CLARA COUNTY, CALIF -- Today, the County of Santa Clara Board of Supervisors approved the selection of Abode Services, one of the Bay Area’s largest and most effective providers of housing services, as the lead service provider for an innovative project to address chronic homelessness. Through this new program, some of the most vulnerable individuals experiencing homelessness in the county will be provided with housing and supportive services. Unlike traditional government-funded programs, however, this effort will employ a “Pay for Success” model under which the County pays for services if and when Abode delivers results – in this case, the stability and wellness of homeless clients.
“Authorizing the administration to negotiate with Abode Services brings the County a step closer to our goal of eliminating chronic homelessness,” said Supervisor Dave Cortese, County of Santa Clara Board of Supervisors, who initially recommended that the County examine the feasibility of Pay for Success. “I believe the Pay for Success model offers a lot of promise for governments seeking to address complex challenges while connecting payments for services to results.”
The project is the County’s first Pay for Success initiative. As the lead service provider, Abode Services will receive funding from philanthropic and/or commercial lenders to pay for the up-front cost of service delivery. When Abode delivers the successful outcomes set forth in its agreement with the County, the investors will recover their capital with moderate interest, or can reinvest it in the program. If Abode Services does not deliver those outcomes, the investors, rather than taxpayers, will bear the costs.
A key goal of the Pay for Success model is to encourage partners in government programs to focus on outcomes – such as housing stability and wellness – rather than units of service, as with more traditional funding structures. The Pay for Success model is intended to increase successful outcomes, enhance service providers’ ability to measure that success, improve knowledge of what approaches to social problems work, and create roadmaps for other communities to follow.
“This is a major milestone in the County’s efforts to ensure all County programs are cost-effective and deliver the successful outcomes they are intended to achieve,” said Gary Graves, Chief Operating Officer, County of Santa Clara. “Abode Services has a record of achieving results and we believe they will be a committed partner in our effort to effectively address chronic homelessness.”
“Abode Services is honored and energized by this opportunity,” said Louis Chicoine, Executive Director. “We believe that our track record in addressing homelessness using a data-driven, evidence-based approach has given us a strong foundation for this program. This Pay for Success opportunity will allow us to significantly expand our efforts to help get people who are homeless off the street and into permanent, stable housing that meets their needs.”
The County and Abode Services will now begin a multi-month deal construction process to finalize the parameters of the Pay for Success project, including the selection of target outcomes, an evaluation plan, and the engagement of private investors.
The chronic homelessness in Santa Clara County is defined as a group not only living on the street for long periods, but also having co-occurring serious mental health concerns or physical disabilities. On any given night, 2,509 individuals are chronically homeless in the county. This project will provide affordable housing and an array of supportive services, a combination that has been shown to significantly improve quality of life among vulnerable individuals who are chronically homeless, and to reduce reliance on very costly government-funded services, such as emergency room care. The County is also pursuing a second Pay for Success initiative that will target the most frequent and costly users of the County’s in-patient psychiatric facilities.
Founded in 1989, Abode Services has developed and implemented an array of innovative programs to end homelessness. It serves adults and children throughout the Bay Area, improving the lives of more than 4,000 individuals a year. Abode Services operates over 30 supportive housing programs that keep close to 1,000 households in housing on any given night. A national leader in its field, Abode has consulted widely about permanent housing solutions, and its senior staff have been recruited to present nationally about its success in implementing housing strategies. It has received prestigious grants from the Charles and Helen Schwab Foundation, the U.S. Department of Housing and Urban Development, and the U.S. Department of Veterans Affairs, among many others. Abode Services also plays a critical role in 12 formal collaborative partnerships with more than 40 other public and private entities.
Santa Clara County’s efforts to investigate and pursue Pay for Success initiatives has been supported by Third Sector Capital Partners, Inc., a nonprofit organization dedicated to accelerating America’s transition to a performance-driven social sector. These efforts were initiated through a grant from Step Up Silicon Valley, a project of Catholic Charities of Santa Clara County, and by The Health Trust. The Sobrato Family Foundation, the Silicon Valley Community Foundation, provided critical support. The California Pay for Success Initiative, administered by the Nonprofit Finance Fund and funded by The James Irvine Foundation, has also provided critical philanthropic support.
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