In 2017, a state in the southwest U.S. had the highest female incarceration rate in the country — a position that it held for more than 25 years. In spring 2017, the state sought to reverse this trend through an agreement with a nonprofit based in one of the its major metropolises. This agreement incorporated Pay for Success principles into the provision of services to women facing the prospect of imprisonment, enabling the state to reduce its costs of incarceration — both direct and indirect — through funding one of the nonprofit’s established programs, which was proven to help participants avoid prison in both the short- and long-term.
In the spring of 2017, FaegreBD Consulting Senior Director Mike Brink, while working for another consulting firm, led the finalization of the agreement between the state and the nonprofit. Over a period of more than 12 months, Brink led a consulting team that procured and negotiated a first-of-its-kind Pay for Success agreement targeting a reduction in the rate of female incarceration. He worked with the initiative’s sponsoring legislators, the nonprofit, and executives from the state’s Management and Enterprise Services agency and Department of Corrections (DOC).
The project began with a procurement seeking to identify a partner with a proven track record of reducing the rate of female incarceration. Through the procurement process, the state identified the nonprofit and its program as the most promising approach. In the resulting agreement, the state and nonprofit defined success as a program participant not being incarcerated within a DOC facility during and following program participation. The total amount paid to the nonprofit at four different milestones for each successful outcome is considerably less than the average cost of incarceration for a woman over the average length of stay. Each successful participant also creates other savings for the state, including those resulting from improved education, employment, health and children’s life outcomes — and reduced reliance on social benefit programs.
The state’s Pay for Success partnership with the nonprofit is still in its early stages, but initial benefits include:
- Public dollars are now used to supplement — not displace — private dollars, thanks to philanthropy commitment to funding the nonprofit operations at a level that maintains funding from prior years.
- This project enabled the nonprofit to expand its existing services, admitting up to 125 additional women into the program annually for up to five years; the initiative has doubled the number of women able to participate in the program.
- So far, 18 of the newly funded individuals have graduated from the program.
- No program participants have recidivated.
- Focused in the metropolitan area where the nonprofit is based, the program has led to an overall decline in rates of female incarceration in the metropolitan area relative to comparable areas of the state with high population.