Santa Clara County Project Welcome Home

Last updated Monday, October 16, 2017

Quick Facts

Current Phase
Issue Area
Service Period
Project Scope
Implementation Start
A woman reading with two young children. Photographer: Alain McLaughlin

In August of 2015, Santa Clara County, with support from Third Sector Capital Partners, launched Project Welcome Home, California's first social initiative financed by a Pay for Success model. Over the next six years, the project will provide community-based clinical services and permanent supportive housing to 150-200 chronically homeless individuals who are currently frequent users of the County's emergency rooms, acute mental health facilities and jail. The lead service provider for the project is Abode Services; one of the Bay Area's most effective housing service providers with a track record of high-quality programming. Additionally, the University of California San Francisco is serving as the lead evaluator for the project.

Following the launch of Project Welcome Home, Santa Clara County, in partnership again with Third Sector Capital Partners, began developing "Partners in Wellness," their second Pay for Success project, aimed at improving the coordination and care for County residents who are frequent users of the County's emergency and inpatient psychiatric services. Many of these clients have multiple occurring issues such as acute mental illness and substance abuse, often necessitating a multi-disciplinary response. This project will focus on clients who have frequent or extended stays in psychiatric emergency, in-patient, and other institutional settings, ensuring they are stabilized in community-based, less restrictive environments where they can receive proper medical treatment and coordinated case management services. Success of this project will be measure by a reduction in utilization of the County's Emergency Psychiatric Services. Santa Clara County has selected Telecare Corporation to serve as lead service provider. The project will be evaluated by Stanford University.

Analysis

  • Market Overview

    • Year Launched
      2015
    • Service Delivery Term (Years)
      6
    • Motivation for Project
      More than 2,200 chronically homeless individuals in Santa Clara County lack access to stable housing and long-term supportive services.
    • Project Objective(s)
      End homelessness, increase stability and improve health by achieving 12 months of housing stability
    • Individuals Served
      150-200
    • Geography
      Santa Clara County, CA
    • Issue Area
      Homelessness
    • Initial Private Investment ($ millions) [Note 2]
      6.9
  • Project Partners

    • Service Provider(s) [Note 1]
      Abode Services
    • Payor(s) [Note 2]
      Santa Clara County, California
    • Transaction Coordinator(s) [Note 3]
      Third Sector Capital Partners
    • Evaluator [Note 4]
      University of California, San Francisco School of Medicine
    • Validator [Note 5]
      None
    • Project Manager [Note 6]
      None
    • External Legal Counsel [Note 7]
      Fenwick & West LLP; Gibson, Dunn & Crutcher LLP; Miles & Stockbridge P.C.
    • Technical Assistance Provider(s) [Note 8]
      Third Sector Capital Partners; Palantir Technologies
  • Evidence and Program Design

    • Service Intervention(s) Model and/or Type
      Permanent supportive housing; Assertive Community Treatment
    • Evidence base for intervention
      Permanent Supportive Housing: 15 experimental/quasi-experimental studies [Note 7]; Assertive Community Treatment: 27 experimental/quasi-experimental studies [Note 8]
    • Has effectiveness of the intervention for PFS project target population been evaluated?
      Yes
    • Has the service provider provided this intervention previously?
      Yes
    • Is PFS project: Scaling an existing intervention by replicating at a larger scale? Demonstrating the effect of a new program model or combination of services? Transplanting an existing intervention(s) to a new target population and/or service delivery setting?
      Scaling
  • Evaluation

    • Evaluation Design Methodology
      Validated service provider data; RCT [Note 4]
    • Data Source(s) for Evaluation
      Santa Clara Valley Health and Hospital System; Homeless Management Information System; Criminal Justice Information Control; Service provider
    • Outcomes Tied to Success Payments
      1) Months of stable tenancy
    • Outcomes Tracked, Not Tied to Success Payments
      Health care, social service and criminal justice system utilization
    • Length of Evaluation Period
      6 years
  • Service Provider Characteristics and Service Delivery

    • Single or multiple service providers?
      Single
    • Service provider type(s) (nonprofit, government, private)
      Nonprofit
    • Service provider OR site selection method
      RFP
    • Service Provider Experience with PFS Intervention
      Experienced with ACT and permanent supportive housing (PSH); currently operates 30+ PSH programs
    • Referral Method for PFS Target Population
      Voluntary
    • Did the project have a ramp-up phase? (Y/N; brief description)
      Yes: 3 month ramp-up period prior to PFS transaction launch; county-funded
  • PFS Contracting and Governance

    • Operational Oversight Structure [Note 1]
      Operating Committee includes 1 County representative and service provider staff
    • Frequency of meetings and/or reports
      Monthly
    • Executive Oversight Structure [Note 2]
      Executive steering committee includes 2 county representative and 2 service provider representatives
    • Frequency of meetings
      Quarterly
    • Investor role in project governance?
      Can attend any operating or steering committee meeting as non-voting member [Note 6]
    • Frequency of reporting to investors
      Quarterly
    • Non-standard Contract Termination Events [Note 3]
      1) Insufficient referrals/ underenrollment; 2) Insufficient supply of adequate housing; 3) Substantial reduction in Medi-Cal funding
    • Appropriations Risk Mitigation Strategy [Note 4]
      Annual appropriations part of county baseline budget; Service provider can terminate contract for cause in case of annual appropriations failure
  • Investors

    • Senior Investor/ Lender and Total Senior Investment ($MM)
      The Reinvestment Fund ($0.5); CSH ($0.5); ($1 total)
    • Subordinate Investor/ Lender and Total Subordinate Investment ($MM)
      The Sobrato Family Foundation ($1.5); The California Endowment ($1); The Health Trust ($1); The James Irvine Foundation ($0.28); ($3.78 total)
    • Deferred Fee Source and Total Deferred Fees ($MM)[Note 1]
      Abode Services ($0.5)
    • Recoverable Grant Source and Total Recoverable Grants($MM)[Note 2]
      Google.org ($0.5)
    • Non-recoverable Grant Source and Total Non-recoverable Grants ($MM)[Note 3]
      Laura and John Arnold Foundation ($1)
    • Guarantor and Guarantee ($MM) [Note 4]
      None
  • Basic Repayment Structure

    • Initial Investment ($Millions)
      6.9
    • Maximum Repayment Funds Committed by Payor ($Millions)
      12
    • Full service delivery term (years)
      6
    • Full repayment period (years)
      6.25
    • Interim outcomes reported? Tied to payments?
      Yes/Yes
    • Sustainability/ Recycling of Funds
      1) Recoverable grant will be reinvested into service provider for capacity building; 2) Nonrecoverable grant will be reinvested in county
  • Detailed Repayment Terms

    • Interest
      5%; (senior); 2% (subordinate/PRI); 0% (Philanthropic)
    • Trigger for initial repayment of principal [Note 1]
      Client achievement of three months of housing stability
    • Threshold for full repayment of principal
      Not available
    • Threshold for full repayment of principal plus maximum success payments
      83% of clients achieve 12 months of housing stability
    • Repayment timing
      Annually, starting at the end of year 1
    • Return to Investor [Note 2]
      Not available
    • Success Payment to Other Stakeholders? [Note 3]
      Yes [Note 6]
  • Project Costs

    • Project Development Costs Not Covered by PFS Capital Raise
      Feasibility assessment; Transaction coordinator fees
    • Funding source(s) for project development costs, if any
      Health Trust; James Irvine Foundation; Social Innovation Fund; Santa Clara County
    • Project Implementation Costs not covered by PFS Capital
      $7.7 million in Medicaid services; $4 million in housing units and vouchers
    • Funding sources for implementation costs not covered by PFS capital
      Santa Clara County; State of California