Charles Chieppo: Pay for success social programs
To its many critics, President Lyndon Johnson's War on Poverty is often described as the classic 1960s social program: a well-intentioned but naive effort that spends billions of dollars year in and year out without making much of a dent in poverty.
But imagine if government only paid social-service providers if their efforts actually yielded the desired results. That's the idea behind "pay for success" programs, also known as social impact bonds. Under this concept, businesses and/or philanthropies provide up-front money for programs to address difficult social problems. If they achieve a set of measurable outcomes within an agreed-upon time period, the funders get their investments back, plus interest. If not, government pays nothing.
Pay for success programs seem to be attracting a growing number of bipartisan fans since I wrote about them in 2014, and two new programs illustrate how implementation of the concept is becoming more sophisticated.
Last month, Connecticut Gov. Dannel Malloy, a Democrat, announced a four-year initiative to keep children from 500 families out of foster care. Social workers from the Yale Child Study Center will focus on parents with substance-abuse problems as part of an intensive effort to keep the children in their homes.
No funder has been named yet for the $12 million initiative, but several have expressed interest. If successful, the state will reimburse the up-front money plus a 5 to 6 percent interest payment. It's a pretty good deal considering that Joette Katz, commissioner of the state's Department of Children and Families, told The Washington Post that Connecticut currently pays about $350 million annually for services to children in foster care and institutions.
In South Carolina, Republican Gov. Nikki Haley recently announced a $30 million, four-year program to send registered nurses who specialize in maternal and child health into the homes of low-income pregnant women to teach them parenting skills and ways to keep their children healthy. The effort is funded by foundations and a corporation.
The Connecticut and South Carolina programs highlight the opportunity pay for success presents for prevention programs that can yield long-term savings but might not get funded through the traditional appropriations process. The South Carolina program also addresses the potentially sticky issue of determining whether a program has achieved the agreed-upon outcomes by designating an MIT research group to conduct an evaluation. Such provisions enhance the integrity and perception of pay for success.
As a model that is dependent on what funders are willing to invest in, pay for success isn't the silver bullet for addressing every stubborn and costly human-services problem. But particularly during a time when some once again seeing economic clouds looming, they can be a valuable tool for helping our neediest citizens by focusing state and local government resources on the best kinds of programs -- those that actually work.
Charles Chieppo is a research fellow at the Ash Center at Harvard's Kennedy School. This originated at governing.com.
Chris Powell: Riding rails through Conn. ruins
"Appalachia'' (gelatin silver print), by MILTON ROGOVIN, at the Thompson Gallery, Weston, Mass.
By CHRIS POWELL
MANCHESTER, Conn.
Reading the governor's press releases, Connecticut might think that preservation of farmland and prevention of "suburban sprawl" are compelling issues. Riding the train from Greenwich to Hartford gives a contrary impression.
Thanks to Amtrak, such a trip is still possible for those who can deal with the bumps, shuttered washrooms, and clogged toilets. The train windows remain clear enough to reveal a stunning and almost unbroken panorama of economic collapse -- ruined and abandoned factories and commercial properties occupying what might be considered prime locations, adjacent to the railroad and highways and served by all utilities.
If there was really any money in agriculture in Connecticut, hundreds of large farms could fit on the abandoned property that is already cleared as well as inside the abandoned buildings that remain structurally sound. Of course the abandoned properties could be redeveloped as housing as well.
The ruin may be most striking in Bridgeport. While the call letters of the city's radio station, WICC, were chosen for "Industrial Capital of Connecticut," today the "I" would have to stand for "impoverished." New Haven, Meriden, and Hartford, once industrial powerhouses themselves, now consider it a triumph just to tear down a ruined building. Even fairly prosperous towns along the railroad, like Milford and Wallingford, have such embarrassing eyesores.
In any case "farmland preservation" -- government's paying farmers for the "development rights" to their property -- doesn't make agriculture profitable or even sustainable. It only lets farmers withdraw their equity from the land without having to sell it for housing, and thus makes suburban and rural towns even more residentially exclusive, restricts the housing market, and supports prices for those who have housing while driving up costs for those who don't.
Most advocates of "farmland preservation" care far less about sustaining agriculture than about keeping new people out. And while Connecticut's industrial decline is no secret, riding the rails through the core of that decline explodes the premises behind "farmland preservation" and complaints of "suburban sprawl."
The ride shows that Connecticut's problem is not preserving farms or stopping "sprawl"; instead the problem is urban rot. Since the infrastructure remains -- including the railroad, which, while creaky, is still more convenient than cars and buses for getting to New York, Boston, and Philadelphia -- what has made Connecticut's cities so unattractive to people who can afford to live elsewhere and pay taxes in support of government?
For starters are the schools, the worst in the state. But schools are only reflections of a community's population, and city populations are of course overwhelmingly poor and fatherless.
So the big policy question has to be: A half century into the "War on Poverty," with government now providing the poor with food, rent, heat, medical insurance, social workers, ever-longer unemployment compensation, disability stipends, and lately even cellphones, what is making and keeping people poor if not government itself? If the ruined factories along the rail line hint that the answer involves the loss of low-skilled, entry-level industrial jobs, couldn't government find similarly basic work for people to learn with in lieu of unearned welfare benefits? Thousands might be employed perpetually just cleaning up the trash along the rail line and the streets in every town.
Couldn't government enforce standards in school so that people emerged with enough skills to make their own way? Skilled people still might find good employment in any number of endeavors -- like modernizing the whole Northeast rail network. After all, "work, not welfare" used to be a populist and liberal objective. Right now the only consolation of riding the rails through the ruin of Connecticut may be that at least we still have the world's best imperial wars and public employee pension systems.
Chris Powell is managing editor of the Journal Inquirer, in Manchester, Conn.
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