The first-in-the-nation Pay for Success (PFS) initiative addressing chronic homelessness, which was implemented by the Massachusetts Alliance for Supportive Housing (MASH) for the Commonwealth of Massachusetts, focuses on providing low-threshold, permanent supportive housing to those who would otherwise rely on costly emergency resources, enabling them to address their often-complex health issues more effectively than they would on the streets or in shelters. The PFS initiative provided more than 500 units of permanent supportive housing for up to 800 individuals over six years. MASH is an LLC - a wholly owned subsidiary of the Massachusetts Housing & Shelter Alliance (MHSA) - that is managed by MHSA, United Way of Massachusetts Bay and Merrimack Valley (United Way) and CSH.
The innovative PFS initiative leverages a mix of philanthropic funding and private investor capital from United Way, Santander Bank and CSH to provide the upfront funding for the initiative. The initiative also leverages public resources, including Massachusetts Rental Voucher Program subsidies from the Department of Housing and Community Development. MHSA’s advocacy throughout the PFS contracting process has resulted in the expansion of the Community Support Program for People Experiencing Chronic Homelessness (CSPECH) to additional health insurance providers in Massachusetts. The expansion of CSPECH means that more individuals will have access to Medicaid-reimbursed supportive services in permanent housing.
For this initiative, the Commonwealth contracts with an intermediary - in this case, MASH - that is responsible for operating the program. Investors provide upfront funding for the initiative. Then, if the program is successful, the Commonwealth will reimburse the intermediary, which will repay the investors. An independent evaluator, Root Cause, will determine if the Pay for Success initiative has achieved its goals.
The initiative is based on MHSA’s successful Home & Healthy for Good (HHG) program, which initially began as a pilot in 2006. Funded through a line item in the state budget, HHG provides flexible funding for permanent supportive housing for chronically homeless individuals. Since 2006, HHG has placed over 900 individuals into permanent housing. Results show a trend toward tremendous savings in health care costs, especially hospitalizations, when chronically homeless individuals are placed into supportive housing.
Goulston & Storrs represented MHSA in connection with the implementation of their historic Massachusetts Pay for Success program to reduce chronic homelessness. The firm, led by Peter Corbett and Peter Kochansky, helped MHSA to structure the program, which is the first in the nation to use social innovation financing to provide supportive housing for chronically homeless individuals. Goulston & Storrs attorneys continue to help MHSA implement their social service contracts with measureable benchmarks to help permanently house 500 people who have suffered at least one year of chronic homelessness.
MHSA was founded in 1988 by Greater Boston homeless service providers and citizens seeking to create a coordinated strategy to end homelessness. Today, MHSA membership includes nearly 100 community-based agencies operating programs that serve homeless individuals across Massachusetts. MHSA advocates at the local, state and federal levels for policy and practice to end homelessness through the development of strategies that address the intertwined and unmet health care, income and housing needs of homeless individuals and those at risk of homelessness.