Pay for Success is an innovative financing structure in which philanthropic and private investors provide up-front funding for a project and government only pays for successful outcomes.

1. The Massachusetts
Juvenile Justice
Pay For Success Initiative

2. JUVENILE RECIDIVISM HAS CONTRIBUTED TO
AMERICA’S RISE IN INCARCERATION RATE FOR YEARS
The US has a growing
number of incarcerated
young people.
Without intervention,
high-risk young people
face a reality of years
in jail and prison.
The average prison sentence
for young male ex-offenders
in Massachusetts is
64%
go back to jail
within 5 years
35%
Only
gain employment
within a year
2.4
years

3. INTERVENTION CAN ALTER THE TRAJECTORIES
OF AMERICA’S MOST HIGH-RISK YOUNG PEOPLE
In 2013, Roca served 469
high-risk young men ages 17-24.
In Massachusetts,
Roca, an outcomesdriven organization,
combines relentless
outreach with datadriven evaluation to
produce consistent,
positive outcomes
for young people.
Of the
115 young men already in the third phase (last two years) of the model:
69%
had no
new arrests
89%
retained
employment
95%
had no new
technical
violations

4. PAY FOR SUCCESS LEVERAGES PRIVATE CAPITAL
AND REDUCES RISK FOR GOVERNMENT
The Commonwealth
of Massachusetts is
looking for new ways
to solve problems while
saving taxpayer dollars.
Pay for Success is an
innovative financing
structure in which
philanthropic and
private investors
provide up-front
funding for a project
and government only
pays for successful
outcomes.
The government only pays back investors
if certain outcomes are reached.
The Commonwealth underwent a process to develop a first Pay for Success deal
in Massachusetts that would serve as a pilot for future deals:
1
2
3
Reviewed what social
problems would be
good ventures for first
Pay for Success deal
Evaluated and decided
on juvenile recidivism
Structured deal with
Roca and philanthropic
and private lenders

5. THE INITIATIVE WILL EXPAND INTERVENTION
TO 929 HIGH RISK YOUNG MEN
This $27 million,
7-year project is
the largest financial
investment of its
kind and allows Roca
to expand its high
impact intervention,
which aims to reduce
recidivism and increase
employment.
Roca will serve
approximately
929
young men
Ages 17–23
At high risk of incarceration
In the probation system or
exiting the Massachusetts
Department of Youth Services

6. SAVINGS FOR MASSACHUSETTS BASED
ON REDUCED INCARCERATION RATES
% Decrease in Total Bed Days =
Savings Net of Pay for Success Payments
The Commonwealth
of Massachusetts will
only pay a return if the
program is successful.
If there is no reduction
in incarceration, the
Commonwealth pays
nothing.
55%
=
$7M
50
40
30
20
PAYMENTS TO LENDERS
10
At higher levels
of success, all the
philanthropic funding
that is replenished will
be recycled. Laura and
John Arnold Foundation
will use recycled
funding to support
future PFS initiatives.
New Profit and The
Boston Foundation will
use recycled funding to
support scaling of Roca.
USD MILLIONS
Government savings
are based on a decrease
in incarceration and an
increase in employment.
70%
=
$18M
10%
20%
30%
40%
50%
60%
70%
DECREASE IN TOTAL BED DAYS
Source: PFS Factsheet

7. INVESTING IN HUMAN CAPITAL
The Massachusetts
Juvenile Justice Pay
for Success Initiative
will serve as proof
of concept that
philanthropic and
private dollars can
be used to invest
in not only physical
infrastructure, but
also human capital.
Our hope is that future transactions
modeled after this deal will draw more
private sector capital to address other
social problems:
Education
Income Security
and Social Services
Employment Workforce
Development
Public Health