Home Visitation Program May Be Extended 6 Months

Posted on March 18, 2015 by Patrick Lester

Rep. Charles Boustany (R-LA) announced March 17 that he has cosponsored legislation along with Rep. Dave Reichert (R-WA) that would extend authorization for the Maternal, Infant, and Early Childhood Home Visiting program (MIECHV) through September 30. The extension, if adopted, would give Congress more time to approve a longer term reauthorization.

The bill (H.R. 1372) was introduced as a back up. An extension has also been included in related legislation that would address payments to physicians under the Medicare program, but the fate of that bill is uncertain. MIECHV is currently slated to expire on March 31.

“The MIECHV program uses evidence-based models to achieve real results,” said Boustany in a statement. “This is an approach we should take with more social programs across the federal government to determine whether they actually work.”

“The MIECHV program was designed based on evidence, and it is currently being evaluated to see whether it’s working as intended. We need to make sure more of our federal programs operate this way, and we look forward to working with our Democrat and Republican colleagues to do just that.”

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Posted in Children and Families, Home Visiting

House Hearing on Evidence and Social Policy Influenced By Partisan Budget Divisions

Posted on March 17, 2015 by Patrick Lester

A bipartisan congressional hearing devoted to increasing the use of evidence in social policy appeared to be influenced by partisanship elsewhere on Capitol Hill Tuesday, as congressional Republicans released a new budget proposal that drew immediate criticism from Democrats.

The House Ways and Means Human Resources Subcommittee Chairman Charles Boustany (R-LA) opened the hearing (video) by focusing on areas of agreement.

“Low income individuals and taxpayers alike deserve programs that are effective at promoting opportunity and helping people improve their lives,” he said. ”This is not about ideology or cutting spending. It’s about doing what’s right.”

Rep. Lloyd Doggett (D-TX), the subcommittee’s ranking Democrat, began his remarks by welcoming the panel’s review of evidence-based policy, but he cautioned that evidence was too often overshadowed by ideology. “We aren’t lacking evidence, we are lacking political will to overcome ideology and act on the evidence,” he said.

He also warned against attempts to shift responsibility for social programs from the federal to the state level. “If you send federal funds to the state of Texas,” he said, “and you have no federal guidelines and no meaningful requirements that Texas use those dollars to accomplish the intended purpose, the state will simply use the funds to fill its budget gaps and provide corporate tax breaks.”

Witness Testimony

The hearing’s first witness was John Bridgeland, a former director of the White House Domestic Policy Council under President George W. Bush and senior advisor to Results for America, a bipartisan coalition that supports the increased use of evidence in federal programs.

In his testimony, Bridgeland made six recommendations that mirrored those he made last year with Ron Haskins, a senior fellow at the Brookings Institution. They included:

  • Setting aside 1 percent of program funds for evaluation at each federal department and agency.
  • Creating comprehensive, easy-to-use “What Works” clearinghouses at each department and agency.
  • Encouraging the use of rapid, low-cost tools to determine impact, including promoting access to federal administrative data.
  • Investing limited tax dollars in what works, including through tiered evidence programs such as the i3 and Social Innovation Fund programs.
  • Directing funds away from programs that consistently fail to achieve outcomes, and
  • Promoting innovation and continuous learning, rather than using evaluation to justify premature funding cuts, citing the elimination of the Youth Opportunity Grants program as an example.

Bridgeland concluded his remarks by announcing that the Results for America coalition had endorsed an evidence commission that Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA) are expected to introduce in legislation later this year. He also announced that it endorsed social impact bond legislation recently introduced by Reps. Todd Young (R-IN) and John Delaney (D-MD).

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Posted in Evidence

SIF Pay-for-Success Intermediaries Announce First Cohort of Projects

Posted on March 11, 2015 by Patrick Lester

The Social Innovation Fund (SIF) today announced that five of its eight pay-for-success intermediary grantees have selected a first round of 27 subgrantees to receive technical assistance funding for pay-for-success transactions.

Today’s announcement covers only a fraction of the projects that are likely to be leveraged through SIF funds. Announcements from the other three intermediaries (National Council on Crime and Delinquency, Nonprofit Finance Fund, and University of Utah Policy Innovation Lab) are still outstanding. Moreover, several of the five that announced today (perhaps all) may announce further rounds of subgrants later this year or next. (Additional information can be found in SIRC’s report, released late last year).

SIF is also expected to announce another competition for intermediaries in addition to the current eight later this year. It received funding from Congress to do so in December.

SIF is supporting its pay-for-success grantees through a learning community that is sharing best practices and lessons learned. All grantees receive direct support from an assigned program officer, according to Samantha Jo Warfield, a spokesperson for SIF.

In addition to the SIF-funded projects, as much as $300 million in workforce-related projects may begin to come online soon under legislation enacted by Congress last year. Congress may also soon move separate, stand-alone legislation in the House and Senate.  The House bill was introduced last week.

The five SIF-funded organizations announcing projects today include:

Update

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Posted in Social Impact Bonds / Pay for Success, Social Innovation Fund

Social Impact Investing: Still Small, But Growing

Posted on March 7, 2015 by Patrick Lester

Social impact investing is continuing to grow, according to a report in yesterday’s New York Times.

This growth in socially-minded investment may increase the working capital available for social impact bonds. According to the story:

Certain areas are growing rapidly, like green bonds. Since 2007, about $60 billion worth of green bonds have been sold, according to Marilyn Ceci, a managing director and the head of green bonds at JPMorgan Chase. But $37 billion of that came in 2014. One prediction at a U.S. Trust conference on Wednesday put that amount at more than $100 billion this year.

Why do people invest in an area that does good but can be complicated to understand and has a reputation of modest returns? The reasons are varied.

Banks make these investments because they help fulfill the requirements of the Community Reinvestment Act of 1977, which requires them to meet a range of credit needs, “with the added bonus of qualifying for great P.R.,” said Robert T. Esposito, a lawyer at Orrick, Herrington & Sutcliffe. “If you’re a foundation, you can meet your 5 percent distribution” of assets as required by law, he said. “Or if you’re an impact investor, you must be willing to trade off some returns.”

But Andy M. Sieg, head of global wealth and retirement solutions for Bank of America Merrill Lynch, views this as a chance for retail investors to drive the creation of a new investment category. “We’re in the early stages of an innovation cycle,” he said. “Client demand emerges. Advisers become stimulated by this demand. It drives product creation. It’s happened again and again, and it’s taking place in the era of impact investing.”

He said Merrill Lynch now has $9 billion in social impact investments, compared with $6.4 billion last year. (Over all, the firm has more than $2 trillion in assets.)

For more, see the full article.

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Posted in Social Impact Investing

Social Impact Bond Legislation Introduced in the House

Posted on March 5, 2015 by Patrick Lester

Reps. Todd Young (R-IN) and John Delaney (D-MD) yesterday introduced legislation in the House (H.R. 1336) that would establish a $300 million federal fund for state and local initiatives that base their payments on results.

“Too often, Washington focuses on inputs instead of outcomes,” said Young in a statement. “We spend too much time talking about how much or how little to spend on social safety net programs, and not enough time talking about whether or not we’re improving lives.”

“This bipartisan legislation offers a new solution that improves government services, helps those in need and reduces taxpayer costs,” said Delaney.

Companion legislation is expected soon in the Senate. “Chairman Hatch plans to introduce a similar bill this Congress,” said Aaron Forbes, press secretary for Sen. Orrin Hatch (R-UT).

Sen. Michael Bennet (D-CO) is expected to be a cosponsor. “These public-private partnerships represent a shift to a model of government where results matter and where we pay for competence,” said Bennet. “Supporting targeted early interventions will help improve outcomes in health care, education, job training, child care, and a range of other government services.”

The Obama administration has also supported a similar proposal in its proposed budget for FY 2016, released last month.

As introduced, the bill:

  • Authorizes $300 million through a one-time mandatory appropriation for states and/or local governments that launch pay-for-performance initiatives.
  • Specifies 21 types of allowable projects, including increasing work and earnings, increasing high school graduation rates, and reducing rates of asthma, diabetes, or other preventable diseases.
  • Authorizes payments only if agreed upon outcomes are verified by independent evaluations “using random assignment or other research methodologies that allow for the strongest evidence of effectiveness possible.” Savings to the federal, state and local government are among the factors that must be considered when approving local partnerships.
  • Establishes a Federal Interagency Council on Social Impact Partnerships to oversee the initiative and issue related regulations. The Council would be composed of one designee from 10 agencies or departments, including the Department of Health and Human Services and the Department of the Treasury. It would be chaired by the Director of the White House Office of Management and Budget (OMB).
  • Authorizes OMB to spend up to $2 million each year for federal technical assistance in the development or support of social impact partnerships and $10 million to cover up to half of the cost of state/local feasibility studies. The bill reserves up to $45 million (15% of all funds) for evaluations.
  • Permits bank investments in social impact partnerships to be considered as part of the bank’s requirement under the Community Reinvestment Act (CRA) to help meet the credit needs in their communities.
  • Sunsets after 10 years.

The bill is somewhat different from previous proposals (bill text).  It uses the term “social impact partnerships” to describe pay-for-performance agreements commonly referred to as social impact bonds or “pay-for-success” by the Obama administration. It also assigns oversight and payment authority to OMB, whereas the similar Obama administration proposal assigns such authority to the Treasury Department.

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Posted in Social Impact Bonds / Pay for Success

Personnel Changes on the Obama Social Innovation Team

Posted on March 4, 2015 by Patrick Lester

Comings and goings:

  • Dave Wilkinson: Dave Wilkinson has been named the new head of the White House Office of Social Innovation and Civic Participation. He is replacing Jonathan Greenblatt, who left the position to lead the Anti-Defamation League. Wilkinson previously served in that office as Senior Policy Advisor for Social Finance and Innovation where, according to a story in The Chronicle of Philanthropy, he focused on the administration’s pay-for-success efforts.
  • Robert Gordon: Robert Gordon is leaving the Department of Education, where he served as a senior advisor on evidence issues. Last year, Gordon was nominated to be the department’s Assistant Secretary for Planning, Evaluation, and Policy, but his nomination was never voted on in the Senate according to a story in Education Week. He also previously served at OMB, where he played a large role in shaping the Obama administration’s evidence and innovation initiative. Gordon’s central role was a described by Ron Haskins in his recent book, Show Me the Evidence, and he was one of the featured speakers at the related Brookings book event in December. He is moving on to the College Board.
  • Jim Shelton: Jim Shelton, former Deputy Secretary at the Department of Education (and before that, Assistant Secretary for Innovation and Improvement where he oversaw the i3 and Promise Neighborhoods programs), is now a senior advisor at Bridgespan on social innovation and anti-poverty issues.
  • Kathy Stack: Kathy Stack has left her position as a senior career staffer at OMB overseeing the Office of Evidence and Innovation. Her departure comes after 34 years of service, most recently including what appears to be a significant step forward for the administration’s evidence and innovation initiatives in the president’s proposed FY 2016 budget.

In other news, the administration has released a one-year progress report on its ‘My Brother’s Keeper‘ initiative. As originally proposed, the initiative included a significant evidence and outcomes component. It is currently overseen by Michael Smith, who previously ran the Social Innovation Fund.

Posted in Evidence

House Passes Pay-for-Success Amendment to K-12 Education Bill

Posted on February 26, 2015 by Patrick Lester

By voice vote, the House tonight passed an amendment authorizing the use of pay-for-success models for teacher and principal training programs. The amendment was approved as part of a larger bill (H.R. 5) that would reauthorize the Elementary and Secondary Education Act (ESEA).

The amendment to the bill was sponsored by Reps. John Delaney (D-MD), Todd Young (R-IN), and Jared Polis (D-CO). It would make pay-for-success an allowable use of Title II funds by states or localities for such training if they result in a direct cost savings to the local, state, or federal government. Funded projects would require a feasibility study that would, among other things, demonstrate that the funded initiatives are “based on strong or moderate evidence of effectiveness.” Payments would only be made when agreed upon outcomes are achieved, as determined through an independent study based either on random assignment or other experimental designs when random assignment is not feasible. (The amendment language is here).

The focus on teacher training was reportedly agreed upon by supporters in both parties. According to the Alliance for Excellent Education, additional training is needed to address high levels of turnover among teachers nationally, a problem that costs states millions of dollars each year.

“Teacher turnover is a drain on schools and a drain on resources,” said Delaney in a statement. “My bipartisan amendment will give state and local governments another tool in the toolbox to support teachers, expanding training programs and boost retention efforts.”

Delaney’s Republican cosponsor, Rep. Young, concurred. “As we continue to look for more ways to focus government spending on producing desired outcomes, rather than arbitrary dollar figures, it’s clear that we must also have a focus on building an evidence base for our policies,” said Young in a statement released by his office.  “The social impact financing model does that, and this amendment is a small step towards implementing this approach to a broad range of issue areas.”

Comments on the House floor during proceedings on the amendment can be found here. Off the Hill, the amendment was supported by America Forward and Results for America.

The overall bill may be passed by the House as early as tomorrow, but it is unlikely to be enacted into law in its current form. President Obama has threatened to veto the bill as written.

The amendment nevertheless provides the first indication of support for pay-for-success in Congress this year. Separate, stand-alone legislation has not yet been introduced in the House or Senate in this session of Congress but is expected soon.

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Posted in Education, Social Impact Bonds / Pay for Success

i3’s Fate Tied to NCLB Reauthorization

Posted on February 20, 2015 by Patrick Lester

With legislation reauthorizing the principal federal K-12 education law, No Child Left Behind (NCLB), now moving in the House and expected to move soon in the Senate, what will be the fate of the Obama administration’s signature evidence-based education initiative, the Investing in Innovation (i3) program?

The Republican-controlled House is expected to pass its version of the bill next week and it contains no mention of the program. House Republicans appear to view it as just one of many federal programs that should be consolidated or eliminated. At best, i3 is seen as a potential bargaining chip in any future negotiations with the administration.

The program’s status is less clear in the Senate, which Republicans also control but where some Democratic support is required to reach the 60 votes necessary to overcome a potential filibuster. Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) have been working together for several week to hammer out a bipartisan bill in that chamber. Alexander hopes to move it as soon as next month.

Despite their bipartisan efforts, Alexander appears skeptical of dedicated federal funding for innovation. He left i3 out of a discussion draft that he released before entering into negotiations with Murray. According to a report in Education Week:

“My own view is that the government ought to enable and encourage, not mandate, innovation,” said U.S. Sen. Lamar Alexander, R-Tenn., chairman of the committee. “It can do this well” by letting states decide for themselves how to use federal funds.

Sen. Patty Murray, D-Wash., the ranking member on the panel, rejected the notion of eliminating dedicated funding arguing that the federal government can and should help invest in particular areas that simply wouldn’t be possible at the state or local level.

“In many places, states and districts are already feeling tight budget constraints,” Murray emphasized. “Without dedicated funding for innovations in STEM, literacy, arts, physical education, or other priorities, there’s no guarantee that states would invest in solutions that can help close achievement and opportunity gaps.”

Murray is a strong supporter of evidence in federal programs. Late last year she introduced legislation, along with Rep. Paul Ryan (R-WI) in the House, that would create a commission to promote the use of evidence in federal programs more broadly. The two are expected to reintroduce that legislation again this year.

In additional to Murray, Alexander will also need the support of several other Democrats, including Sen. Michael Bennet (D-CO), who is an i3 supporter. He is expected to introduce legislation authorizing i3 along with Sen. Brian Schatz (D-HI) in the coming weeks. (Update: here.) Similar legislation has already been introduced in the House, but Democrats there have little leverage.

The i3 program has also drawn continued support from the administration. Education Secretary Arne Duncan spoke in favor of the initiative at a local i3-funded program at the Francis L. Cardozo Education Campus in Washington, D.C. earlier this month. According to Education Week:

“We want to replicate these kinds of stories around the nation,” Duncan told reporters at Cardozo. “The federal government innovates in lots of places,” he added, including defense and health. “We think we should absolutely be innovating in the education space.”

The program also has the support of some in the education advocacy community. Over 100 education organizations have signed a letter circulated by the Knowledge Alliance in support of i3. According to Michele McLaughlin, President of the Alliance, “We need i3. To launch and sustain innovation at any reasonable scale, there needs to be a federal role.”

Other organizations, such as the Coalition for Evidence-Based Policy, are pushing to expand the use of research and evidence beyond i3. Writing about the proposal, Martin West, an associate professor of education at Harvard, said: “A competitive grant program that includes these design elements need not be called i3 … [This proposal would] allow the Department of Education to reserve up to one percent of funding of all ESEA programs (except Title I) to award grants for innovation and research, with grant amounts based on the tiered evidence model used in i3.”

No Child Left Behind (also known as the Elementary and Secondary Education Act, or ESEA) was last authorized in 2002 but — due primarily to the bipartisan negotiations between Alexander and Murray — education advocates think there is a good chance a bill will be enacted this year. Alexander has indicated that he would like to get a final bill to the president by the summer, before presidential campaign politics make enacting a bill more difficult.

If the bill stalls, i3 seems likely to continue for at least the remaining two years of President Obama’s term in office. To date, despite lacking authorizing legislation, it has been funded in annual appropriations bills since it was first created as part of a large stimulus package in 2009. It received $120 million in funding for the current year.

The next two years are likely to be critical for the program in any event. Final evaluations for the initial cohorts of i3 grants are expected to begin rolling out later this year.

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Posted in Education

Pay-for-Success in Child Welfare: A Case Study

Posted on February 12, 2015 by Patrick Lester

On December 3, 2014, Cuyahoga County announced the nation’s first pay-for-success initiative that will address the interrelated issues of homelessness and foster care.   The initiative will provide $4 million in privately-funded housing and other supportive services to 135 homeless parents with children in the county’s foster care system. Repayments to the project’s philanthropic and other investors will be made by the county only if the initiative reduces out-of-home placements for foster children compared to the county’s current publicly-provided services.

This brief provides an overview of the initiative and its history, service array, evaluation, and financing.

Full report

Posted in Children and Families, Social Impact Bonds / Pay for Success