Champion has developed or consulted on several projects using outcomes-based financing, also commonly known as the pay-for-success model. The idea behind outcomes-based financing is that investors fund an initiative, often one that is preventative in nature, with expected outcomes set at the beginning of the project. If those outcomes are achieved, the investors receive a return. These projects are often public-private partnerships and may include tools such as social impact bonds (SIBs), which provide for investor repayment out of governmental cost savings. While SIBs are always considered pay-for-success, the pay-for-success model does not always have to be an SIB.
Some Champion projects have included:
Communities Foundation of Texas and the W.W. Caruth, Jr. Foundation engaged Champion to explore the feasibility of using a pay-for-success financing approach to fund The Cottages at Hickory Crossing, a proposed permanent supportive housing initiative for 50 chronically homeless individuals. While we found that a social impact bond would be feasible, and we generated significant investor interest, Dallas County opted for a different pay-for-success tool—the 1115 Medicaid Waiver. This tool uses the same type of pay-for-success funding mechanism developing desired outcomes and metrics of success at the outset and providing for a financial incentive if those outcomes were achieved. However, it includes a government-to-government reimbursement without the use of private investment capital. This project began construction in late 2015.
The Texas Legislature asked Champion to develop a feasible project concept to address chronic absenteeism and its impact on the juvenile justice system in Texas. Champion completed the design of the project and performed a feasibility study. The project is now on hold pending reorganization of the Texas Juvenile Justice Department.
Champion is working with Children’s Medical Center, the Environmental Protection Agency, and the Dallas Housing Authority to create a pilot program using a pay-for-success approach to address the impact of poor air quality from the physical environment on pediatric asthma. Outcomes sought include a reduction in emergency room visits and hospitalizations resulting from the removal of exposure to asthma triggers in the home. Grant requests are pending to fund this program.
PROJECT LEADERSHIP TEAM
