With twenty-five years of experience in juvenile justice work and a proven intervention model to reduce recidivism, Roca, Inc. knew it was a good fit for the first state-level Social Innovation Financing program in the nation. When the Massachusetts law passed in July 2012 to bring private investment resources to outcome-oriented, nonprofit service providers, the Chelsea, Massachusetts-based nonprofit recognized that it needed counsel to help navigate the steps from a Request for Responses (“RFR”) bid to a “Pay for Success” contract under the new program.
Over their long-term relationship with Roca, Goulston & Storrs has counseled the organization in connection with a variety of matters including contracts, intellectual property, corporate governance and employment. With this successful track record working with Goulston & Storrs, Roca now turned to the public-private partnership expertise of the firm for help.
Pay for Success Initiative
In the Pay for Success initiative, Peter Corbett and Peter Kochansky guided Roca through a successful RFR bid and negotiated the project structure, funding and service agreements with the Massachusetts Executive Office for Administration and Finance (“A&F”). Goulston & Storrs created a legal framework intended to provide good outcomes for all parties: Roca’s services are funded as it achieves the required results, investors receive a return on their investment free of political intervention, and success payments are disbursed by A&F only when objective, pre-established performance standards are met. Most importantly, more young men will have access to Roca’s life-changing programs.
In particular, Peter and Peter convinced A&F that Roca’s adherence to performance standards provides an oversight alternative to direct control by the Commonwealth, allowing Roca to exercise its own expertise in service delivery.
Over half of the young men exiting the juvenile justice system in Massachusetts return to prison within three years, but Roca will work toward a performance benchmark of dropping the re-incarceration rate by two-thirds over the next six years. With Roca’s success, the Commonwealth pays Roca and its investors for each expected re-incarceration that Roca has prevented, up to a total of $18M dollars, which is between $9M and $23M dollars cheaper than if the Commonwealth paid for each re-incarceration. Roca will use the payment to serve 929 young men over the six-year pilot period in addition to approximately 700 young men per year that Roca currently serves. Roca will manage this expansion of service while also returning a profit to its investors.