Social impact bonds, a relatively new type of philanthropic investment is coming into vogue, allowing donors to put money in social impact programs, which have specific and tangible goals, and make money back only if those goals are met.
Its biggest test just launched in Massachusetts…
Social impact bonds are a relatively new type of philanthropy where donors put money in social impact programs, which have specific and tangible goals and make money back (paid by the state of Massachusetts, which has received $11.7 million in funding for the project from the U.S. Department of Labor) only if those goals are met. In this case, Roca is participating in a randomized trial to see how its efforts in keeping young men out of prison compare to the norm.
The funding, which comes from loans and grants provided by organizations including the Goldman Sachs Social Impact Fund, Living Cities, and New Profit, will allow Roca to help 929 at-risk young men between 17 to 23, all of whom are either exiting the juvenile justice system or are in the probation system currently. Nonprofit advisory firm Third Sector Capital Partners organized the effort.
Roca’s model uses “data and research and real-time information and a whole lot of tenacity,” says founder Molly Baldwin. The program consists of two years of intensive support, followed by two years of followup. It is successful because of its relentless outreach and intensive case management model in which one youth worker is assigned to provide two years of intensive support to 25 young people. Roca also provides programming for life skills, education, and employment, and focuses on engaging institutions that are or should be supporting its participants.
“This is a group of young men in the country that we leave on the street, are heading to prison, or dying young,” says Baldwin. “The highest risk here is them and their lives. We are painfully aware of that.”
The model seems to work. Out of 115 young men participating in the final two years of the four-year program:
- 89% have had no new arrests
- 69% retained employment for at least three months, and
- 95% had no new technical law violations.
This article originally appeared as The Biggest Social Impact Bond In The U.S. Will Keep At-Risk Young Men In Jobs And Out Of Prison | Co.Exist | ideas + impact by Ariel Schwartz – Senior Editor at Co.Exist. She has contributed to SF Weekly, Popular Science, Inhabitat, Greenbiz, NBC Bay Area, GOOD Magazine and more. For story ideas: ariel[at]fastcompany.com