Increasing Employment and Improving Public Safety in New York State

In December 2013, Social Finance announced the launch of the nation’s first state-led Pay for Success project in New York. The project is currently expanding the Center for Employment Opportunities’ evidence-based reentry and employment services to 2,000 formerly incarcerated individuals in New York City and Rochester, N.Y. These services will give participants the chance to break the cycle of recidivism while obtaining gainful employment.

“This project is a win-win for our state, facilitating the reentry process of individuals into the community by boosting employment opportunities and thereby reducing recidivism rates, but requiring payment for services only if these goals are met.”

– Governor Andrew M. Cuomo

The project will provide $13.5 million over a 5.5-year investment life 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 flexible, multiyear funding will cover the full cost of CEO’s programmatic work and core costs.

Goals of the project

  • Expand proven workforce reentry services to at-risk formerly incarcerated individuals
  • Help to break the downward cycle of recidivism for individuals at high risk of returning to prison
  • Deploy private investment capital to expand social service programs in an unprecedented way
  • Lower government remediation costs including incarceration and criminal justice services by providing prevention-based services
  • Facilitate collaboration by the public, private, and nonprofit sectors toward a common social goal

The $13.5 million equity capital raise was the largest at the time of project launch.

This project is also the first-ever Pay for Success offering distributed via a leading wealth management platform, made available to qualified private and institutional investor clients of Merrill Lynch and U.S. Trust and other impact investors. Social Finance is proud to announce more than 40 investors have participated in this project. This landmark distribution model is an important and exciting development in the field.

How it Works

New York State & US DOL

Repay investors if outcomes are achieved

1 Partner

Social Finance

Lead project development, mobilize capital, manage for results

2 Develop & Finance

Center for Employment Opportunities

Provide comprehensive employment services

3 Deliver services

Formerly-incarcerated individuals

Participate in CEO's services

4 Achieve outcomes


DOCCS Research and DOL Research conducting RCT; Chesapeake Research Associates validating results

5 Trigger outcome payments

Impact Investors

Over 40 investors via Bank of America Merrill Lynch private placement

Key Resources

In the News


The Center for Employment Opportunities will receive funding to expand its evidence-based training and employment services program to serve an additional 2,000 recently-released inmates over a four-year period.

Bank of America Merrill Lynch has distributed this opportunity through its wealth management platform to private and institutional investors via a private placement offering, a first in the SIB space. BAML is committed to transforming the instrument into an investment class that will become a standard component of client portfolios.

Social Finance identified the opportunity, conducted rigorous due diligence to select the provider partners, brought together the public and private sector parties that constitute the partnership and played a central role in negotiating the transaction. It will also provide ongoing performance management throughout the life of the project.

The Rockefeller Foundation will provide a first-loss guarantee to protect up to $1.3 million of investor principal, or approximately 10 percent of the total investment.

The Robin Hood Foundation, NYC’s pioneering poverty fighting organization, committed early to a $300,000 investment in the transaction.

Chesapeake Research Associates will independently validate the results of a Randomized Control Trial that measures outcomes for program participants; verified social impact will form the basis of outcome payments to investors.

Jones Day provided legal expertise in the SIB structuring and contracting process.