Jake Segal recently assumed leadership of Social Finance’s Public Sector Practice, which he helped establish after joining the organization in 2014. Here, Jake discusses his new role and the continued evolution of the Public Sector Practice.
You’re managing a large portfolio as Head of Advisory—Social Finance advisory teams are currently working on more than two dozen projects across the U.S. Could you explain what that work looks like and talk about a couple projects you’re particularly excited about?
Segal: For sure. The vast majority of our work is with the public sector—helping governments build stronger muscles around results, and shifting more of our collective focus away from process and toward the stuff that really matters. That means unlocking data to measure performance and help delivery partners get better over time; creating funding models that emphasize adaptability and improvement over compliance, and that pay for outcomes instead of activities; and stitching together multi-agency, often multi-sector partnerships so that we can share data and money in new ways.
Okay, that’s a lot, so let me give you a few examples.
We’ve been working with New Castle County, in northern Delaware, to help expand home visiting for first-time mothers. We helped put together a partnership between the County, the Longwood Foundation, and a local nonprofit called Children and Families First that uses funding from the American Rescue Plan Act to serve more people but do so in a way that’s both adaptable and accountable, by linking ongoing payment to whether or not we achieve outcomes.
We’ve taken that core idea—about the linkages between funding and results—and used it in a few different ways. For example, we’re working with the Texas Department of Family and Protective Services’ Prevention and Early Intervention to build a quality improvement scorecard. You know, a lot of the time, nonprofit service providers have to submit tons of data to government funders and they get next to nothing back about how they’re doing. The work in Texas helps create feedback loops for 130 different providers so they can test things, troubleshoot, and get better outcomes.
So that’s also why we think data matters so much here. It helps bring all of these partners together, to get better. But it also can help them make better decisions and pursue some smart, interesting investments. A few years ago, we worked with Ventura County, just north of L.A., on a data exercise looking at how often people experiencing homelessness also touch other crisis services in the county.
So we integrated their homelessness management information system with data from Medicaid, along with 13 other smaller systems, including those used for behavioral health and public safety services, to track those overlaps in service use. That backed up the county in deciding to double down on supportive housing approaches.
Public health has been the central focus of much of your work throughout your career. How did that become a key issue area for you?
There’s no big foundational story here; it’s just that I can’t help but see health as the biggest, most important issue out there. It’s foundational, it impacts everything else. Health care—not health in its entirety, just health care—is itself a third of our economy. A third. And it’s probably the most broken third, so the opportunity for impact is just massive.
I began my career at the Boston Consulting Group, where I was working in global public health, focusing on a few different issue areas, including vaccine access—measles, in my case—and neglected infectious diseases. Most of the work I was doing was assessing major investments that the Bill & Melinda Gates Foundation was considering, and trying to bring quantitative perspectives to the magnitude of death and disability averted if those strategies were successful.
I moved from BCG to the Bridgespan Group with more of a domestic focus. My work there centered on U.S. health and its intersections with impact investing. I met Tracy while helping coordinate a federal policy forum called the U.S. National Advisory Board on Impact Investing, a precursor to what’s now the Impact Investing Alliance.
Along the way I came to appreciate that the gaps in our health systems weren’t just cracks—they were canyons. We have incredible medical expertise and technology here. We have brilliant and dedicated professionals working to help get more people housing, jobs, education, and health care, but none of those things are accessible to everyone. And most of them have huge barriers and often have serious consequences for people with lower incomes. So we have unbelievable inequities and inefficiencies in this country. We’re building layer after layer on top of a legacy system that’s porous all the way down. What we get is unfair, riddled with disparities, and economically it’s hard to fathom. The further you dig into our health policy ecosystem, the more brokenness you find. It’s disheartening. But also, there is just tremendous opportunity for impact here.
What was Social Finance like when you arrived back in 2014? And how has the advisory practice evolved in that time?
In our early days, Jeff Shumway, who launched the practice in 2014, and I thought of ourselves as, essentially, the sourcing function for Social Impact Bonds (SIBs). We saw our role as getting the right people to the table and then putting together smart bets—essentially, finding gaps between the status quo and the best-in-class, and then trying to fill those gaps by doubling down on great interventions. We spent a lot of time in our first year identifying great nonprofits and preparing potential deals.
We came to realize fairly quickly that we couldn’t just will into existence a market for outcomes and then place bets within that market. This was a huge, huge divergence from how governments thought about their role. And it required government organizations to function at the highest level with ability to access historical data, work with lawyers and procurement partners in novel ways, prioritize and define and pay for multi-year outcomes, build measurement systems, and work with new partners.
We always knew that the SIB was a public policy tool meant for public-sector leaders but we had some naive assumptions about government agencies’ ability to navigate multiple types of change at once. So, around late 2015 and early 2016, we essentially built a government consulting practice from scratch. It started pretty focused on this vision of building more outcomes-based contracts. We broadened beyond SIBs to outcomes rate cards and other ways of bringing results into the contracting process. We started thinking in principles, rather than in tools: centering clearly defined outcomes, using data to help decision making, linking payment and performance, and building collaborative and community-based governance and accountability models.
Our next big change took place a couple of years before the pandemic, around 2018 or 2019. The deeper our partnerships with jurisdictions became, the more we came to devote ourselves to infrastructure. We always knew that SIBs themselves weren’t the point of doing SIBs—that it was about using the tool as a mechanism of broader change. Ultimately, we’ve become more and more focused on how we can build the muscles of a more results-based public sector, agnostic to any given tool.
“We’re helping governments with data access, integration, and visualization so they can make data-based procurement decisions. We’re helping them build performance management systems and tools so that they can understand the efficacy of their programs and, if necessary, make adjustments to achieve maximum impact.”
Today, the advisory practice is taking a few approaches to reach that goal. We’re helping governments with data access, integration, and visualization so they can make more data-informed decisions about how to allocate funds, what to buy, how to adapt, and how to create the information and feedback loops for providers to improve. We’re helping strengthen performance management systems and build tools so that everyone can track progress more regularly, and so that the relationship between governments and community organizations is more dynamic and bidirectional. We need to get past reporting relationships and toward something that’s more flexible to community needs and adaptive to changing circumstances or unexpected events—you know, like a pandemic.
I actually think that, at the core, a lot of this is about building better partnerships. Things often break down at the borders between jurisdictions, between agencies, between governments and nonprofits and businesses. The big, near-term opportunities are in the giant obvious spaces between–where, if we can create real partnerships that touch both data and money, and then share out the benefits proportionately, we can get big things done. For example, supportive housing is super expensive and often a hard sell since the ROI is tough for any one agency. But if you add up the value across lots of partners, it’s far greater than the cost, you know?
You were recently selected as a commissioner for California 100, a statewide initiative from the University of Southern California and Stanford University meant to inspire an innovative, sustainable, and equitable future for the state. Can you talk about your connection to California and why you’re so passionate about this work?
I moved to California six years ago from my hometown of Boston. Don’t get me wrong, Massachusetts is pretty amazing and their state government is impressive. But California, to me, is a few steps into the future. It’s huge, diverse, and full of contradictions—all things that could be said of the country writ large. Did I mention it’s huge? Forty million people—that’s more than live in Canada. Los Angeles County has as many people as Michigan.
California counties are fascinating. They have a lot of autonomy and budget authority, in some ways like small states, overseeing big chunks of public safety and health. So they have the ability to make big, localized change. It’s hard to find jurisdictions anywhere that are as interesting and dynamic as California counties.
And California as a state can put its weight behind some remarkable things. For example, one of our partners is the Mental Health Services Oversight and Accountability Commission (MHSOAC). It’s an agency that oversees one of the most transformative and fascinating funding streams in America, thanks to the Mental Health Services Act, a 2004 voter initiative. It mandates that billions of dollars each year— last year, it was $3 billion—get spent with substantial guidance and engagement from people with severe and persistent mental illnesses and their families. And it also mandates that 5% of the money–which, last year, was $150 million—has to be spent on mental health innovations. It’s literally a $150 million annual innovation fund, focused on mental health, directed by people with first-hand experience, that’s meant to break down inequities. How cool is that? Only in California.
The California 100 is this breathtakingly, almost ludicrously big idea—bringing together a bunch of people from around the state to come up with a picture of what California could look like a century from now. I mean, I think there’s recognition that you can’t really predict 100 years from now. Futurism always feels like a dance between serious and silly. But it forces us to think beyond current policy rights and consider big ideas, and the impacts of big ongoing shifts to the economy, society, and environment.
They’ve asked me to think about fiscal reform. How do we take in taxes and how do we spend them? I get to go out and talk to people and convene some focus groups. People are naturally inclined to think first about taxes, and about taxes right now. I get that. But when I think about the future of California, I’m picturing a more sophisticated state spending its money carefully and effectively—building and managing a system and a safety net that’s more personalized and efficient.
It’s actually kind of striking how far behind the public sector is when it comes to technology. I’m in the Bay Area, where companies have been working to predict consumer behavior and shape demand for, you know, ever. That makes people nervous, and that’s fair enough—I also don’t want to be manipulated by big tech but I use this scenario as a point of comparison. In most places in America, two agencies serving the same people in the same place have no ability to coordinate with one another in any way. I’m not overstating this. You wouldn’t believe how hard-won some of our data integration work is—just matching up people in one agency’s records with another agency’s records to qualify them into a program or to help improve case management. Protecting privacy matters but so does effectiveness, and with some nuance and care we can collaborate to make services better, without giving up key data protections. In the meantime just we’ve hamstrung our ability to create systems without holes, to be more sophisticated in matching people with what they want and need.
I like to think there’s a future state for California that can navigate these nuances, that can build good and clever partnerships across agencies and with the private sector, that uses its technology and money to create a better social safety net.