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NY State Social Impact Partnership: Transaction Flow

The New York State Social Impact Partnership has attracted $13.5 million in capital to support the Center for Employment Opportunities, providing vital services to 2,000 recently released NYS prisoners. This innovative financing model ties investor payments to program performance, enabling effective use of taxpayer dollars. Funded by over 40 investors, the initiative aims to enhance public safety, improve employment outcomes, and transfer performance risk to private investors. This project showcases a new approach to funding social services through evidence-based interventions over the next four years.

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NY State Social Impact Partnership: Transaction Flow

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  1. Investors contribute $13.5mm in capital Center for Employment Opportunities provides services to 2,000 recently released NYS prisoners. Social Finance provides on-going project and performance management. NY State Social Impact Partnership: Transaction Flow Outcomes measured by New York State and validated by Chesapeake Associates 12/2013 Next 4 years At 3 year and 5 year At 4 years and 5.5 years Outcomes met: New York State makespayments to investorsbased on programperformance. Outcomes not met: Investors receive no payments except forRockefeller first loss guarantee (10%)

  2. NY State Social Impact Partnership: Multi-dimensional Benefits Illustrative Public Benefits and Payments at Various Levels of Performance • Social and Economic Impact: Improving public safety and employment and thereby saving taxpayer dollars. • Efficient Use of Taxpayer Dollars: Transferring performance risk to private investors and protecting public budgets from paying for ineffective services. • Flexible Funding: Providing social service providers with access to flexible, multi-year funding necessary to build capacity and scale evidence-based interventions. • Accelerated Learning:Advancing knowledge about “what works” in tackling endemic social problems.

  3. NY State Social Impact Partnership: Key Differentiators First Syndicated Offering • Over 40 investors participated to meet goal of a broadly distributed social impact offering Rigorous Design • Significant rigor around the project design ensures that the results will be meaningful Modest Philanthropic Subsidy • A more modest philanthropic subsidy than previous transactions maybe a more scalable model Top Tier Partners

  4. 40+ Investors NY State Social Impact Partnership: Mechanics Rockefeller First Loss Guarantee Facility • Social Finance NYS Workforce Re-entry 2013 LLC Outcome Payer State of New York / USDOL Intermediary Social Finance Inc. Service Provider Center for Employment Opportunities Rockefeller provides 10% first loss protection* 1 7 Investors invest $13.5mm Receive performance-based payment Pay if – and only to the extent that – outcomes are achieved Target Population 2,000 High-Risk Formerly Incarcerated Individuals 6 Evaluator /Validator DOCCS Research / Chesapeake Research Associates 2 Fund operations Social Finance structures, coordinates, and manages the project Measure and validate outcomes Deliver employment services 5 3 4 Achieve outcomes (recidivism, transitional jobs, and employment) *The first loss protection is only availableto the Class A-1 investors

  5. * Anticipated role; Specific terms TBD

  6. Massachusetts Juvenile Justice PFS Initiative Deal Structure Source: Goldman Sachs Urban Investment Group

  7. MA Key Participants: Roles and Impacts

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