To combat homelessness, Austin nonprofit looks to outside investors

An initiative to house and provide services to up to 250 homeless people in Travis County is set to be among the first in Texas to use an innovative funding model where investors pay upfront costs and are reimbursed by local governments only if goals are met.

The funding model, known as “Pay for Success,” has gained popularity throughout the country and world since the first project launched in the United Kingdom in 2010.

The premise is that investors front the cost of a project that addresses a social problem, and only if it is successful, according to metrics agreed upon ahead of time and verified by a third-party evaluator, will governments repay the investors. They usually receive a modest return on investment as well.

In Travis County, the plan is to provide up to 250 homeless people with subsidized rental housing paired with case management and other social services. It will target those who are frequent users of health care, shelter and emergency medical resources or have frequent arrests.

To read more about how the funding model will work in Travis County, visit MyStatesman.com