Pima County Logo
  • Increase font size
  • Decrease font size
  • Print
  • RSS
  • Pima County receives Kresge, TEP grants for Pay For Success projecct

    Jul 23, 2014 | Read More News
    Share this page
    The Kresge Foundation has awarded Pima County $50,000 to help get its innovative Pay For Success program off the ground. Tucson Electric Power also is the first local organization to donate funds - $10,000 – to the program.

    Pay For Success is the county’s embarkation into the new territory of social impact bonds, or “venture philanthropy,” in which investors put up money to help solve a social problem and if successful, receive a modest return on their investment from the government. Pima County is one of just a few governments in the United States attempting to use this unique funding system for social service delivery. The Kresge Foundation is a Michigan-based philanthropic organization that funds programs targeted at helping the poor and disadvantaged.

    At the Aug. 5 Board of Supervisors meeting, Pima County Administrator Chuck Huckelberry will ask the board to accept the $60,000 in grants and to approve $50,000 in county funding, which all combined will help pay for the hiring of a consultant who will determine existing or new social programs that would fit the Pay For Success funding model. If approved, the county will immediately put out bids for the consultant and hopes to have one hired by September. 

    Huckelberry said the consultant company should complete its work and make recommendations for potential Pay for Success programs by early 2015. Those recommendations will include detailed examinations of existing county programs, analysis of the cost and performance data that are available for critical county programs, identification of the feasibility and potential cost and cost savings of alternative interventions, and an assessment of the investment market for funding alternative interventions. The consultant examination will focus on program areas; particularly mandated areas that are especially costly to the county or have a particularly high social or economic impact on the community.

    “Private sector funding is an important addition because increasingly, local governments can expect little help from state or federal governments to finance even the most critical of government services; and it’s left to local government alone to find the financial and creative resources needed to solve problems, whether those problems concern construction and maintenance of roads, response to disasters, accelerating criminal justice costs or responding to the problems of community physical and behavioral health issues,” Huckelberry wrote in a memo to the board about the grant.

    How Social Impact Bonds work:

    Social service agencies and investors work together to achieve a specific and measurable goal set by the government, such as reducing juvenile recidivism or improving outcomes for job training recipients. The nonprofit manages the project, while the investors fund the up-front and ongoing costs of the intervention. The typically long-term project goes through rigorous review and evaluation at the end of a defined period. If the goals are reached, the government pays back with modest returns. If the goals aren’t met, the investors don’t get paid.