Can Social Impact Bonds Help Reduce Homelessness?

Source: J.B. Wogan, Governing, September 8, 2015

… Last month, Santa Clara County announced Project Welcome Home, the latest local government initiative that leverages the social impact bond model. In the next six years, a nonprofit called Abode Services will provide housing and support services to between 150 and 200 long-term homeless people. The nonprofit will assign small caseloads to a multidisciplinary team with training in psychiatry, substance abuse, social work, nursing and vocational rehabilitation. The approach represents a combination of evidence-based practices, and is backed by academic research and recommended by the U.S. Department of Housing and Urban Development. A group of funders is providing $6.9 million — mostly in loans — to make the project happen. Project Welcome Home’s goal is to house at least 80 percent of participants for a year or more. If the program is successful, the county will reimburse its lenders as each person hits certain tenancy milestones. For example, lenders will initially be paid $1,242 for every individual who stays housed for three months. … In the next six years, the county has agreed to set aside about $8 million from its general fund to pay back its lenders if Abode is successful in keeping people housed.