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August 2012

Patrick-Murray Administration Selects MHSA for 'Pay for Success' Contract

Massachusetts Housing and Shelter Alliance and partners will work with the Commonwealth to reduce chronic homelessness while saving money

MHSA has been selected by the Patrick-Murray Administration as one of the first two Social Innovation Financing Intermediaries to negotiate a contract with the Commonwealth. MHSA will partner with the Corporation for Supportive Housing (CSH), Third Sector Capital Partners and the United Way of Massachusetts Bay and Merrimack Valley to reduce chronic homelessness in Massachusetts. Third Sector Capital Partners will also serve as the intermediary for a separate initiative aimed at reducing youth recidivism.

As the first state in the nation to pursue social innovation financing, also known as “pay for success” contracts, Massachusetts is leading the way in focusing on performance-based investments that address costly and challenging social issues like chronic homelessness. Under the social innovation financing model, the intermediary organization is responsible for raising capital from private investors to cover the upfront costs of innovative responses to social challenges. The Commonwealth repays the intermediary for the costs, with interest, only if the program meets certain target outcomes and generates cost savings for the Commonwealth. This model ensures that taxpayers only pay for social innovations that demonstrate success and secure cost savings for the Commonwealth.

Through the social innovation financing contract, MHSA and its partners plan to expand MHSA’s Home & Healthy for Good (HHG) low-threshold housing initiative. HHG has demonstrated that the often traumatic and undertreated health conditions which beset chronically homeless individuals are better treated after a person gains the basic level of stabilization that permanent housing provides. In addition to successfully housing those often considered the hardest to serve, HHG has demonstrated significant cost savings to the Commonwealth.

“MHSA has long advocated for the replication of outcome-based strategies to end homelessness,” said Joe Finn, Executive Director of MHSA. “All of us are excited for the opportunity to bring permanent supportive housing solutions to scale for some of the poorest and most disabled persons in the Commonwealth.”

The Executive Office for Administration and Finance, with the Executive Office of Health and Human Services and the Department of Housing and Community Development, hopes to enter into contracts this fall.

Click here to read the full MHSA press release.

Click here to read the press release from the Executive Office for Administration and Finance.

For more information, please contact Caitlin Golden at 617-367-6447 ext. 28 or cgolden@mhsa.net.