Nonprofit Finance Fund (NFF) spoke with the Hillside Intensive Community Asset Program (ICAP) team and Third Sector Capital Partners, Inc. (Third Sector) about the Hillside ICAP Pay for Success (PFS) Project. This blog is part of an interview series with selected project partners from our Social Innovation Fund transaction structuring competition.
NFF: Tell us about the genesis of this PFS project. What was the original impetus? Who originally got interested in PFS? How were the stakeholders who have been moving the project forward brought together originally?
Hillside Intensive Community Asset Program (ICAP): Hillside's interest in innovative financing goes back many years. We recognized long ago that public funding had limitations and that using philanthropy to fill the gap between what government could pay and the full cost of delivering services would limit the scope and reach of our impact. Furthermore, we saw how hard it would be to introduce innovations in our service model if our only source of funding was government contracts. In response, we developed our first public-private partnership around our youth development program, Hillside Work-Scholarship Connection (HW-SC). That program trained Youth Advocates to work directly with students and families and in schools to help address students’ most difficult challenges; such as poverty, access to social services, and access to employment opportunities. The public-private funding for HW-SC is critical to its ongoing viability and success. Hillside has also had several years of experience with pay for performance contracting on other programs with New York State.
Around the time social impact bonds were emerging in the United Kingdom, we collaborated with thought leaders in the nonprofit sector to explore all the ways in which this might be relevant to and for our work. When New York State began thinking about pay for performance, we contributed our knowledge, experience, and encouragement. In parallel, we have developed relationships with several philanthropic organizations that are frustrated with the limitations of traditional grant making and are wrestling with how to affect real change for the most intractable social problems. The introduction of new opportunities for funding necessitates the need for key organizations to take a leadership role providing sophisticated infrastructure, scalability models and ways to demonstrate impact to funders. Hillside’s history in the space positioned us to move forward in this role.
Third Sector Capital Partners, Inc.: When the New York State Department of Budget’s Pay for Success RFP was announced, Hillside participated in an informational call hosted by the Alliance for Children and Families in which we described the PFS opportunity and our vision. The RFP was for the state’s first Pay for Success (PFS) projects in the areas of health care, child welfare, early childhood development, and public safety. The Hillside representative on the call was one of the few participants who understood enough about this model to ask a number of intelligent questions. This caught our eye! Soon after the call we researched Hillside’s program, and we learned that Hillside has a proven track record developing and delivering new programs, and, most importantly, possesses expertise in tracking data and monitoring programs for consistent quality.
Hillside ICAP: On our end, Hillside was impressed that Third Sector, a nonprofit advisory firm specializing in developing PFS programs and outcomes-based contracting, was already leading the development of PFS programs in other states. Collaborating with Third Sector, we developed a response to the RFP that involved a new service delivery model. We felt we could use our experience in service delivery, supported through a Pay for Success agreement structured by Third Sector, to fill an unmet need in juvenile justice. We responded to the RFP at the end of 2013, and in January of 2014, New York State Governor Andrew Cuomo made an announcement in his State of the State address that $100 million would be allocated to support these PFS initiatives.
NFF: This project is innovative in that it will create an alternative to detention and placement for youth in the juvenile justice system. This alternative has not existed before, for this population, in the region. Can you tell us a bit about how you designed the ICAP program and how it complements existing programs and services in the region?
Hillside ICAP: Hillside had leveraged its extensive experience in juvenile justice to develop a program that would complement existing resources and build off of a successful, neighborhood-based intervention model we have been operating in Monroe County, New York. The design of this program, which became the Intensive Community Asset Program (ICAP), was driven by Hillside’s dynamic, cooperative relationships with key county-level probation officials and grassroots nonprofit leaders. These partners were uniquely positioned to provide key information and preliminary data about underserved target groups and unmet needs, along with pragmatic insights into optimal operational procedures and priority outcome measures. Their involvement was critical for constructing a program that would fill existing service gaps and would be a good candidate for PFS funding.
Third Sector: ICAP is a community-based program, designed for youth in the juvenile justice system that are at-risk for detention and placement in secure treatment and correctional facilities. ICAP creates a compelling alternative for family-court judges and probation officers to sentencing young offenders to lengthy, repeated, and often ineffective out-of-home placement. Institutional settings have all too often been shown to be high-cost, while hindering youth development.
There are several main benefits of ICAP as a PFS project. First, it can be rapidly deployed because of Hillside’s longstanding service delivery partnerships, ICAP is well-positioned to operate across the state, seeking to serve youth in 10 target counties in Western, Central, and Upstate New York in the next five years. Second, it can be adjusted to meet local needs and complement existing community resources. Third, it focuses on clearly measurable outcomes, including reductions in detention and placement days, and improvements in wellbeing for youth and families.
Hillside ICAP: ICAP was created with the input of an advisory board composed of county experts in juvenile justice and was designed to address gaps in service delivery they had identified. These gaps centered on young people that have been unable to find success in other diversion, or alternatives to incarceration, programs, or have not previously had access to existing programs. Barriers to success and access have included limited English proficiency, unstable housing, lack of family engagement, and mental health challenges.
The ICAP project is innovative because it uses unique local partnerships to provide community-based, intensive wraparound services that are truly individualized to meet the needs of these vulnerable youth. ICAP’s collaborative, strengths-based, culturally competent approach works to stabilize youth and their families—within their own neighborhoods—by meeting immediate needs, strengthening connections within the community, and developing tools for coping with challenges and creating positive change.
The program model and key service delivery elements are drawn from Hillside’s Re-Investing in Youth (RIY) Project—a program in Monroe County that has operated for three years within a “pay for performance” funding paradigm. RIY has generated a range of externally-monitored and validated outcome measures, including significant reductions in the number of youth placed into detention and placement, reductions in failures to appear in court, and reductions in rates of re-arrest. RIY’s many successes help inform and provide evidence for the impact that ICAP stands to achieve.
NFF: As you know, the road to launching a PFS project is a long one! Can you share with us what the biggest challenge to date is/has been? How are/have you and your partners approaching/approached this challenge?
Hillside ICAP: One of the challenges in launching this PFS project across New York State has been the complexity and diversity of the involved counties. Traditionally, each county’s social service and probation departments oversee different aspects of the juvenile justice system, including separate funding streams and databases. Therefore, we have found that court procedures, service offerings, and tracking of data vary from one county to the next. While state agencies work to coordinate and combine data, there are limitations around what data points are collected and variations in the data consistency and availability at different levels and in different regions.
All of our stakeholders at the state and local level share the same big picture goal, which is to measurably improve the lives of these youth. However, the details of how each stakeholder identifies who these youth are and tracks their needs can be substantially different. For example, from the beginning, our partners in county probation departments have had a very clear idea of who our target youth are based on daily experiences and observations, though the individual nature and extent of the needs of these youth are often not well-captured or reported. Similarly, our state partners have had clear and striking evidence of the extended and costly involvement of these youth in placement institutions, further supporting the need for ICAP. One of the major challenges has been matching the county-identified target youth and the program eligibility criteria to the data housed within state and county systems.
As the external evaluator was not brought onboard early in the process, it has proven to be a resource- and time-intensive effort to synchronize operational realities with evaluation requirements across 10 distinct counties. Standardizing and streamlining the way in which youth are identified has required a deep understanding of each county and each department’s electronic databases or paper systems and their respective data reporting protocols, as well as the norms of how each local court system handles and processes these cases. Reaching consensus among all stakeholders and partners around how to structure the collection, tracking, and sharing of critical data, and refining elements such as eligibility criteria and process indicators, has required clear and transparent communication and creative, solutions-focused work.
Third Sector: It is important to note that government entities have traditionally tracked outputs, or activities, services, and events. Less information is collected on type of need, details of program approach, and long-term effect. ICAP, working within the context of PFS, is proposing to track outcomes, or individual results, measurable accomplishments, and overall impact. This is a subtle adjustment, but an important one, and part of what makes ICAP so different and so promising for counties and the state alike. With an entirely new process for collecting data and proving success, ICAP is a game-changer for local and state agencies.
Hillside ICAP: Hillside has a long history of partnering with government, business and philanthropy to focus scarce resources on the most promising, data-driven practices that truly move the needle. The Pay for Success model advances our efforts to another level by attracting participants from a much broader universe. It has potential to be the catalyst for bringing the best services to scale, optimizing public resources, and actually addressing the challenges overwhelming our communities.