Governor Quinn Announces Illinois' First Pay for Success Project

CHICAGO - Governor Pat Quinn today announced the state's first Pay for Success (PFS) contract will increase support for at-risk youth who are involved in both the child welfare and juvenile justice systems in Illinois. Also known as Social Impact Bonds, the first contract awarded under this innovative initiative will go to One Hope United, in partnership with the Conscience Community Network (CCN). Today's announcement is part of Governor Quinn's agenda to ensure that all Illinois youth have the opportunity to follow their dreams and reach their full potential.

"The innovative Pay for Success model will generate major investments and improve outcomes for some of our most at-risk youth," Governor Quinn said. "One Hope United and CCN's evidence-based approach will help these youth successfully transition into adulthood."

Governor Quinn launched the PFS program one year ago, aiming to provide critical resources to address community needs while decreasing long-term negative outcomes that are costly for taxpayers. The innovative program invests private dollars into proven social programs, which are then paid back by the state when results are achieved and long-term savings are realized. The state will then see continued savings as benefits accrue after the investments are paid off.

For the state's first PFS project, the program will generate new private investment for support programs targeting at-risk youth, putting them on the right path by reducing their dependence on the state's welfare and criminal justice systems, which will lead to long-term savings for taxpayers. Today's announcement is expected to generate up to $30 million in direct investment into these critical programs. Because success payments by the state are based upon achievement of outcomes, the PFS program will always be cost-neutral to taxpayers.

In September of 2013, the Governor's Office launched a Request for Proposals (RFP) from organizations seeking to partner with the state to fund new opportunities for at-risk youth involved in the child welfare and juvenile justice systems. One Hope United and the Conscience Community Network were selected from six applications submitted in response to the RFP. As part of Governor Quinn's commitment to transparency, Illinois was the first state in the nation to publish responses related to a Pay for Success Request for Information.

"Scars of trauma and pain can lead abused and neglected youth towards criminal behavior as well as a deeper involvement in the child welfare system," Mark McHugh, Executive Director of One Hope United said. "This Pay for Success project will catalyze a comprehensive solution that responds to the unique challenges of dually-involved youth throughout the state. Together with the partners of the Conscience Community Network, we are establishing the foundation for lasting cross-systems change that benefits Illinois' most disadvantaged children and families."

One Hope United will serve as lead provider of the Conscience Community Network. They have proposed a project based on the Crossover Youth Practice Model, a set of proven interventions developed by the Center for Juvenile Justice Reform at Georgetown University. Third Sector Capital Partners is providing financial advisory services to the network.

The Conscience Community Network is a collaboration of seven child welfare and juvenile providers with more than 741 years of collective service in Illinois: Lawrence Hall Youth Services, Maryville Academy, OMNI Youth Services, One Hope United, SGA Youth & Family Services, UCAN and Youth Outreach Services.

The Governor's Office of Management and Budget will be entering into negotiations with One Hope United on a project to improve placement outcomes and reduce re-arrests through evidence-based community alternatives to institutional care. The program will serve approximately 800 youth cared for by Illinois' Department of Children and Family Services with histories of justice-involvement, commonly referred to as dually-involved youth.

In his fiscal year 2015 budget, the Governor committed to growing the state's use of PFS contracts as part of his five-year fiscal stabilization plan.

The Harvard Kennedy School's Social Impact Bond Technical Assistance Lab (SIB Lab), in partnership with the Rockefeller Foundation, received a grant from the Aurora-based Dunham Fund to support the initiative in Illinois. The Rockefeller Foundation has been a leader in helping to bring the PFS model to U.S. and the Dunham Fund is expanding that investment to Illinois. The Harvard SIB Lab is providing technical assistance to 10 state and local governments around the country that are implementing PFS contracts. Innovation Fellow Scott Kleiman is leading the SIB Lab's work in Illinois.

In the PFS model, governments partner with service providers and private and philanthropic investors to scale and fund proven social programs. Investors are repaid by the state from accrued savings only when a rigorous third-party evaluation determines that programs reach specific outcome targets. Because effective programs can help avoid expensive negative outcomes, PFS contracts help avert long-term taxpayer costs. They represent a smarter way for government to do business, furthering transparency and accountability to ensure that taxpayer funds are not spent on ineffective programs.

Illinois is on the leading edge of PFS among states in the U.S., following New York and Massachusetts. The world's first PFS contract was introduced in the U.K. in 2010. Illinois becomes the third state in the country to announce a PFS project and the first to implement PFS towards improving child welfare outcomes, as well as the first to partner with a network of community providers for service delivery.

For more information on Pay for Success in Illinois, please visit payforsuccess.illinois.gov.