The next logical step in the evolution of pay for success finance is broadening the scope of interventions from individuals to families. Rather than focusing on a child that needs educational support, an incarcerated person planning for re-entry, a veteran’s PTSD, or a substance user’s recovery, investors are developing new models that expand targeted populations and capture “impact” data across MULTIPLE lives. In this way investors will leverage targeted (limited cost) investments in privatized public services to capture more metrics of “success” and thereby increase profit-taking.
An example of this is the Connecticut Family Stability project. This pay for success effort was launched in 2016 and targeted households where a parent was identified as having a substance use problem, and the child had involvement with the state’s Department of Children and Families. The Family-Based Recovery program was used, an in-home treatment developed in 2006 by the Yale Child Study Center in partnership with Johns Hopkins University for the Connecticut Department of Children and Families.
Interactive map of the Connecticut Family Stability Pay for Success Project here.
The deal, lauded by the US Department of Health and Human Services, the Office of National Drug Control Policy, and the Office of Social Innovation and Civic Participation, attracted investment not only domestically (the Non-Profit Finance Fund, Arnold Ventures, and the Reinvestment Fund), but also from overseas, namely, France (BNP Paribas) and Australia (QBE Insurance). As far as I am aware, it is the first US venture taking advantage of the tragic opioid crisis to create a global impact investment vehicle using pay for success finance. The deal was particularly attractive for investors, because impacts were captured on BOTH the recovery of the parent AND improved outcomes for the child.
The above op-ed was written in the spring of 2018 by Tina Rosenberg, co-founder of Solutions Journalism Network (read more on impact media here). It speaks glowingly of the project and the $11.2 million investment BNP Paribas made in it. It’s a puff piece promoting innovative finance, that provides background on social impact bond mastermind Sir Ronald Cohen, and pitches the wonders of his “what works” approach and data-driven outcomes.
Rosenberg describes teams of social workers deployed to hundreds of people’s homes. Parents were required to urinate in a cup three times a week. The counseling provided to these families, most of whom earn less than $10,000 per year, could last “up to an hour.” The piece attempts to make it sound comforting and convenient, but having an official of the state in your home every other day for six months monitoring your parenting and deciding whether or not you can keep your family together must have been a harrowing experience.
The “success” metrics for the program were 1) clean screens 2) fewer reports of mistreatment and 3) reduced foster care placements. It’s easy to see how those metrics could be gamed, and in the end, even if the parents were able to stay clean for the specified period of time, they were still left attempting to care for their children on an impossible income. Of course that essential fact is not addressed by the “family STABILITY project;” as if one could achieve STABILITY without a living wage and ongoing family support. But the government and the investors are the ones that get to set the terms of “success,” and in the business of speculative human capital finance, metrics are not established to serve the interests of “at risk” populations.
A 2016 Obama White House report describing “opportunities” for leveraging Pay for Success to address the opioid crisis is shown below the map. Page twenty-one outlines “next steps.” The depravity of the “pay for success” approach can be seen in the language used. The authors recommend identifying “which AGENCIES would benefit from a reduction of opioid misuse” and “potential sources of ECONOMIC BENEFIT.” There is nothing about the people being harmed. There is no moral argument made about providing treatment merely because everyone deserves to be treated humanely. No, the primary thing that matters is identifying a cost-offset that can be easily tracked and will generate a solid rate of return for investors. They don’t care if people are truly cured as long as the numbers on the dashboards allow them to claim “success” and take their profit.
Read the full report here.
These folks never let a humanitarian crisis go to waste. Predators made fortunes improperly prescribing pills. More money was made on recovery programs, but even that wasn’t enough. To that they added “creative financing solutions” that permit MORE profit to be extracted based program outcomes. And thus the tentacles of pay for success continue to extend their reach, grasping at the misery of the masses and using their pain to further concentrate wealth and power in the greedy hands of an elite transnational class.
All the profit accrued from the supposed “success” of “evidence-based” interventions ultimately gets redirected to those at the top. Everyone at the bottom is compelled to attempt to survive on fewer and fewer resources. The Connecticut families struggling with addiction on less than $10,000 this year are likely to be in the same boat next year, but with a few thousand fewer dollars in their pocket. That money, of course, will be sitting as an outcomes-based “success” payment in the coffers of BNP Paribas or QBE Insurance or some other financier, ready for the next go around.
Pay for success does not advance redistribution of resources. It does not ensure people have access to what they need to survive. It is not designed to ameliorate the harm wrought by manufactured poverty. It is a false promise, that concept of “success,” if “succeeding” means the rich always get richer and the poor always get poorer.
Source of tweet here.
At SSIR, Nadine Pequeneza wrote a damning report about Pay for Success (5-31-2019). She described the programs as “undermining our commitment to basic human rights”.