Check Out the Irvine Foundation's New Social Service Initiative

Social services aren't cheap, and government funding hasn't kept up with growing needs. The James Irvine Foundation teamed up with the Nonprofit Finance Fund to launch its newest initiative: California Pay for Success. The new initiative was launched on January 28th with an initial $2.5 million in funding. (Read The James Irvine Foundation: Bay Area Grants).

Basically, Pay for Success is a program designed to reduce the costs of addressing and fulfilling social service issues. Similar programs have been implemented in other states, but this is the first one in California. How's it work?

Private investors pay for preventative and intervention services up-front, and if the services are successful, the government reimburses them with a return on their investment. This means private investors bear the burden of the initial risk and local governments only have to pay for programs that succeed. The goal is to focus on prevention and early intervention, save taxpayer money, and put private money to work for the public good. The initiative was launched at a critical time when governments are failing to provide critical social services, prompting industry leaders to explore how to concentrate resources more efficiently. Irvine's initiative will provide funding for these types of agreements over the next two years.

The James Irvine Foundation has three core program areas: arts, youth, and California democracy. However, the foundation also awards grants through eight special initiatives programs, including Pay for Success. The other initiatives mostly have to do with growing rural community foundations, community leadership, and research about trends in California's nonprofit sector.

Although the foundation typically accepts special initiative proposals by invitation only, Pay for Success is fair least for now. Nonprofit Finance Fund plans to select three to eight California leaders to support through an initial round of funding, and additional funding will be available to them throughout the year. If your nonprofit organization or government agency could benefit from a little structured support to launch essential service programs, head over to the Leader Application page. But hustle, because applications for this year are due February 28th.

"Pay for Success has generated tremendous interest and excitement as a concept," Don Howard, Executive Vice President of The James Irvine Foundation, said in a press release. "But, these are complex agreements that are difficult to develop because they require multiple partners to do business in new ways. That's why so few Pay for Success agreements exist nationally, with none yet in place in California. Our goal is to catalyze the creation of these agreements so that the promise of Pay for Success can be realized for the benefit of all Californians."