The United States has the highest incarceration rate in the world, accounting for almost 25 percent of the world’s incarcerated population and spends over $70 billion annually on correctional facilities.
Social Finance is currently partnering with the Center for Employment Opportunities (CEO) in New York State to reduce recidivism and increase employment by expanding access to CEO’s comprehensive employment services. Through life skills training, transitional jobs, and employment support, CEO supports formerly-incarcerated individuals to break the cycle of recidivism and obtain gainful employment.
National attention has begun to focus on the need to meaningfully decrease the number of people who touch the criminal justice system. More than 650,000 individuals are released from state and federal prisons annually. Nationally, more than two-thirds of these individuals return to prison. For many, the path to successful re-integration is met with significant barriers to basic needs such as employment, housing, and education.
For individuals exiting the criminal justice system, access to effective support systems can fundamentally impact the rest of their lives. Pay for Success expands access to preventive, evidence-based programs like the Center for Employment Opportunities, increasing the likelihood that these people secure stable employment and housing, which reduces their risk of returning to prison or jail.
Connecting formally-incarcerated individuals to supportive services benefits more than just the individuals and their families. Increased employment results in tax revenue and reduced reliance on social services; avoided crimes improves public safety and reduces victimization costs; days not spent in prison reduce the costs of incarceration for taxpayers. A variety of criminal justice interventions meet the conditions needed for Pay for Success to be an appropriate tool, and governments in the United States around the world are using Pay for Success to deliver better services in this issue area.
Increasing Employment and Improving Public Safety in New York State
This Pay for Success project expands a comprehensive employment intervention to a target of 2,000 formerly incarcerated individuals in New York with the goals of increasing employment, reducing re-incarceration, and improving public safety. The project deploys $13.5 million over a 5.5-year project period to expand the work of Center for Employment Opportunities (CEO), a world-class provider of evidence-based training and employment programs to recently incarcerated individuals in New York State. This was the first Pay for Success offering distributed to impact investors via a leading wealth management platform (Bank of America Merrill Lynch). Social Finance developed and structured the project, including service provider solution, contract development, and supporting the capital raise. Since services launched in December 2013, we have provided active performance management and investor relations.
Road Map for Pay for Success in Philadelphia
Working with the office of Philadelphia Mayor Michael Nutter, Social Finance explored the feasibility of improving recidivism and child welfare outcomes through a Pay for Success transaction.