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Posted: Apr 11, 2017 4:36 PMUpdated: Apr 11, 2017 4:36 PM

Fallin Announces Pay For Success Contract

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Ben Nicholas

Governor Mary Fallin announced that the state of Oklahoma and Tulsa-based Family & Children’s Services have entered into a Pay for Success contract aimed at reducing Oklahoma’s nation-leading female incarceration rate by securing public-private investment in the successful Women in Recovery prison diversion program. This project will enable WIR to expand its services, admitting up to 125 women into the program annually for up to five years.

Pay for Success is an innovative funding model that combines nonprofit expertise, private funding, and independent evaluation to transform how government leaders respond to chronic social issues. Through PFS, funders provide the upfront capital to scale effective service providers. Government agrees to repay funders if and when the project achieves its desired impact. Through this PFS contract, the state will repay only if WIR program participants are not incarcerated in the Oklahoma Department of Corrections.

The first PFS project was launched in Peterborough, United Kingdom, in 2010 and was aimed at reducing prisoner recidivism. Today there are more than 70 projects in 18 countries, with 16 projects in the U.S.  The model has attracted strong bipartisan support due to its focus on evidence-based policymaking and the achievement of outcomes. The contract between the Office of Management and Enterprise Services (OMES) and F&CS is the 17th PFS contract in the U.S. and the first PFS contract focused on female incarceration.

The adoption of the Pay for Success model transfers risk from the state to the private sector, in pursuit of preventive programs that hold promise for long-term cost savings and social benefits.

The contract presents no financial risk to the state, which was particularly appealing to state officials at a time of budget challenges. Payments are only made for successful program outcomes.  Additionally, the total payments made for a successful program outcome are considerably less than the direct costs of incarceration and the costs of all of the documented negative future impacts of incarceration on employment, health, family stability and social assistance.

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