‘Tis the Season for Budget Discussions…

It’s hard to miss the conversations around government spending these days. Lots of debating, discussing and pontificating about how money is collected and spent at both the federal and state levels this time of year.

The federal budget conversation is a constant din in the background here in Washington, D.C. And I usually pay attention to the negotiations for D.C., Maryland and Virginia because they have a real impact on my life. Otherwise, I minimize time spent tuning into the dialogue.

But this recent news out of Massachusetts caught my eye. Gov. Patrick is going to test out the “social impact bond” (or Pay for Success bond) concept. In January, the state issued a call for proposals that provide solutions to reduce chronic homelessness and ones that support youths’ re-entry into society after leaving the juvenile justice system. Foundations and individual philanthropists will likely invest in programs that have a proven track record, thus saving the state money to execute and grow the services. It’s like venture capital or a business incubator for social challenges. If these programs work by reducing the number of homeless people in the state and ensuring juveniles are on a productive path, costs to care for these populations will be reduced, resulting in a savings for the state. The state can then pay back investors.

The concept of social impact bonds have taken hold in the UK, and it remains to be seen if they will gain acceptance here in the United States. It makes a whole lot of sense to me, and I’ll be watching Massachusetts closely to see if this works.

Posted on Wednesday, February 22nd, 2012 By Tara Greco
Catogories  Business Alignment/Integration, Measurement & Evaluation, What's Next for CR and tagged , , , , , ,
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