Cuyahoga County Receives DOJ Support for Pay for Success

Holder: New Anti-Crime Spending is "Investment" in Innovation

by Ted Guest - The Crime Report – October 2, 2012

With government funds for new initiatives scarce as a few federal fiscal year begins, the Obama administration has announced some potentially innovative spending aimed at preventing repeat criminality.

Describing what he called "investments [...] designed to aid in the development, implementation, and expansion of proven strategies for intervention," Attorney General Eric Holder told the International Association of Chiefs of Police convention in San Diego yesterday that the Justice Department is working "to improve public safety policies on both the front and back ends of overburdened justice systems."

In one program, Justice will allocate about $800,000 from $58 million allocated nationwide under the federal Second Chance Act for inmate re-entry to Cuyahoga County, Ohio, and Lowell, MA to test a "Pay for Success" model for their prisoner reentry initiatives.

Under the plan, also known as "social impact bonds," the White House Office of Management and Budget explains that a private organization and the government "enter into a contract that specifies the population to be served, the outcomes to be achieved, the measurement methodology to be used, and the schedule of payments to be made."

The private group then "works with philanthropic and other investors to invest in innovative, data-driven service providers that can achieve results."

In Cuyahoga County, where Cleveland is located, a firm called Third Sector Capital Partners held three public presentations in July to discuss "pay for success" initiatives under a plan by Cuyahoga County Executive Ed FitzGerald to improve county services, lower taxes, and increase government efficiency.

Last summer, New York City announced plans for the Goldman Sachs firm to invest nearly $10 million in programs to help rehabilitate jail inmates, with a provision that the financial services company will profit if the effort succeeds in reducing recidivism rates significantly.

The Justice Department is awarding $6.1 million to seven states for programs designed to reduce the offender recidivism rate. Funds will go to Arkansas, Georgia, Kansas, Louisiana, New York, Ohio, and Rhode Island.

Details differ from state to state. Kansas, for example, will get $1 million to reduce 36-month recidivism rates by 2.5 percent over two years and probation revocations in one judicial district by 20 percent, among other goals, through steps such as designating mental health case managers in 4 prisons, starting a "rural demonstration recidivism reduction" program in one county, and hiring mentoring coordinators to serve moderate- and high-risk offenders.

Holder asserted that efforts like this already are working in several states.

He cited a federally-funded study released last week by the Council of State Government that showed "significant reductions" in recidivism over three years: 11 percent in Ohio and Texas, 15 percent in Kansas and "an astonishing 18 percent" in Michigan.

Federal officials also announced $3.7 million in nine awards to states and localities for "smart probation" projects also aimed at reducing repeat criminality. The Obama administration had sought funding for "smart probation" for several years, but this is the first time that Congress has authorized spending on it.

Recipients are Aurora, CO, site of the July mass theater shooting; San Diego, Travis County, TX, and state agencies in Connecticut, Minnesota, Montana, Oregon, South Carolina, and Wisconsin.

Among other new federal anticrime spending allotments announced yesterday was nearly $1 million to the Research Triangle Institute and Pennsylvania State University to study why a group of offenders from Indiana and South Carolina stop committing crimes.

Nearly $1 million was awarded to Harvard University for "executive sessions" to advance scholarship on community corrections issues and more than $700,000 to the State University of New York at Albany for a study of the relationship of offenders' past criminal records to successful employment.

The Vera Institute of Justice was awarded $350,000 to compare the impact of video communications between inmates, family and other outsiders' with personal visits.