Pay for Success Offers New Social Service Paradigm

Joined by a bipartisan group of the new law’s key backers, Republican State Senator Beth Martinez Humenik of Thornton along with Governor John Hickenlooper on Wednesday signed into law HB-1317, a bold new approach to social service delivery that rewards nonprofit contractors and early childhood pre-school programs that measurably improve outcomes for program beneficiaries, while also lowering costs to taxpayers.  

This “pay for success” approach is a shift away from a government-centered model of social service assistance, which often has proved less-than-effective at measurably helping those in need, in favor of creative new partnerships between government agencies, business investors and nonprofits. Social services will be delivered more efficiently and effectively, while lowering long-term costs to the State. Outcomes must be reached since private sector partners are only paid for measurable success.

“If government agencies can partner with business investors, non-profits and philanthropies to get better results, in terms of improving lives and reducing recidivism, while also decreasing the cost to state government and taxpayers, that’s a win-win. Colorado would be foolish not to try this model,” said Martinez Humenik. “Decades of experience show that the traditional way of providing social services and early childhood pre-school education is extremely expensive but often ineffective.  Pay for success is working well in other states and it makes sense to try it here.  I look forward to seeing successful results generated and the long-term benefits to our citizens with this opportunity to engage in pay for success partnerships.”

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