County of Santa Cruz Launches Two New Outcomes-Oriented Contracts

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After two years of research, assessment, and design, the County of Santa Cruz Human Services Department (HSD) has launched two new two-year outcomes-oriented contracts with subsidized employment service providers, Goodwill Central Coast and Community Action Board of Santa Cruz County, Inc. (CAB). These new contracts represent a total of $2.6 million in funding from the County of Santa Cruz Human Services Department, with $323,000 of that funding written into the contracts as “fees for performance” bonuses that will be paid over the two-year period, contingent on achievement of specified outcomes. Both contracts are two-year contracts to allow for continuous improvements on the part of the providers as well as on the contracts themselves.

The work leading up to these new contracts was done in partnership with Third Sector and Stanford Center on Poverty and Inequality (CPI). CPI integrated and analyzed available data, while Third Sector gathered qualitative data from robust stakeholder engagement. Third Sector was then able to deploy both the qualitative and quantitative data insights to improve and embed outcomes and incentives into HSD’s subsidized employment contracts with the service providers.

Goodwill and CAB will now have more flexibility in their service models while receiving bonuses for their success in helping HSD’s CalWORKs Welfare-To-Work program participants gain work experience and continue to thrive after completing their programs. Service provider success is measured by the number of participants obtaining and retaining unsubsidized employment for 0-12 months after exiting the program, individual quarterly earnings growth of 10% from quarter of exit to 12 months after program exit, and ending reliance on CalWORKs cash-aid assistance (the California TANF fund) for a positive reason (i.e. over income, rather than failing to file paperwork) from the day they enroll in the program to 12 months after exiting the program.

These contracts were written to address the needs of all stakeholders including program participants, employment partners, CAB, Goodwill, and HSD staff and leadership. Continuous improvement processes have also been built into the contracts, including monthly meetings between HSD officials and the nonprofit service providers and quarterly meetings with HSD and service provider executives. These pre-arranged meetings are designed to ensure that if parties are finding that the programs are not meeting the needs of participants, incremental process, service, and data feedback improvements can be deployed in order to make the most impact as soon as possible for the participants served.

Through these two contracts, 200-250 participants who receive CalWORKs cash aid will benefit from the subsidized employment services of CAB and Goodwill, locally based nonprofit providers with historic success in providing subsidized employment services through a myriad of benefits assistance programs. Goodwill’s Subsidized Transitional Employment Program (STEP) provides job training and work experience in Goodwill stores, and CAB’s SmartHire places people at six month long subsidized employment jobs through their established relationships with partnering employers.

This work was funded through a Social Innovation Fund grant awarded in 2016, with match funding from the Ballmer Group.

The Social Innovation Fund (SIF) was a program of the Corporation for National and Community Service that received funding from 2010 to 2016. Using public and private resources to find and grow community-based nonprofits with evidence of results, SIF intermediaries received funding to award sub-grants that focus on overcoming challenges in economic opportunity, healthy futures, and youth development. Although CNCS made its last SIF intermediary awards in fiscal year 2016, SIF intermediaries will continue to administer their sub-grant programs until their federal funding is exhausted.