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Posted On: 12/27/2013

FitzGerald Announces 'Pay for Success' to Transform Human Services Delivery

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Rich Luchette: (216) 797-0931 or

First County Government to Launch Innovative Program

CLEVELAND - Cuyahoga County will pioneer an intensive effort to keep homeless families together by using private investor funding. If the project succeeds, the County can save millions in foster care payments over the next five years.

The "Pay for Success" model changes how the County funds preventive human services. Under this model, private investors and foundations pay for the cost of providing services. If the services are successful, the County pays back the investors and foundations out of savings achieved from preventing the need for more costly services in the future.

FitzGerald began exploring Pay for Success in 2011 and included it as a human service priority in his Western Reserve Plan. "I want to transform how human services are provided in Cuyahoga County," said FitzGerald. "Our Division of Children and Family Services has led the country in child welfare reform, reducing the number of children in foster care in Cuyahoga County from over 6,000 to 1,700 in 10 years. With that said, the families that remain in the system are high-need and deeply systems-involved. This partnership will use evidence based solutions to stabilize these families."

FrontLine, a local mental health organization, and Case Western Reserve University will work with the Countys Division of Children and Family Services, Cuyahoga Metropolitan Housing Authority (CMHA) and Third Sector Capital Partners to implement the program.

Caroline Whistler of Third Sector Capital Partners remarked, "Cuyahoga County's Pay for Success project is the first procurement initiated by a County-level government; it demonstrates the administration's interest in innovation and commitment to performance.

The George Gund Foundation has provided grant funding for this initiative since 2011. "Philanthropy has both the luxury and obligation to take calculated risks on innovations that can benefit some of our most struggling citizens," noted David Abbott, Executive Director of The George Gund Foundation. "Pay for Success is a creative new tool that might not only improve the lives of these citizens, but do so in a manner that saves taxpayer money and stretches our limited philanthropic dollars." The Cleveland Foundation became a funder in 2013.

"CMHA's role in the Pay for Success initiative will potentially help provide housing opportunities to homeless women and their families throughout Cuyahoga County," said Jeffery K. Patterson, Chief Executive Officer for CMHA. "This program is a golden opportunity to serve a constituency that is desperately in need of service."


Cuyahoga County Division of Children and Family Services
The Cuyahoga County Division of Children and Family Services (DCFS) is the local agency mandated by Ohio law to investigate referrals of child abuse and neglect. They provide a range of services to assure children are safe, including foster care and adoption. DCFS embraces the philosophy that children grow better in families. All programs have the goal of stabilizing and reuniting families that have been weakened through poverty, illness or crisis, resulting in neglect or abuse of children.

FrontLine Service is the contracting intermediary and lead service provider on this project. Frontline Service is the largest homeless service provider in Ohio and based in Cleveland, Ohio. They proposed an innovative service delivery model that would address the needs of homeless women, enabling them to avoid separation or reunify with their children.

Case Western Reserve University is serving as data partner on this project. The Center on Urban Poverty & Community Development at the Jack, Joseph and Morton Mandel School of Applied Social Sciences is a university-based research center with extensive data holdings on children and families. The Center has conducted the preliminary analyses to identify the target population for the initiative and will undertake the evaluation of the outcomes of the project.

Cuyahoga Metropolitan Housing Authority (CMHA) is serving as a housing partner on this project. CMHA owns and manages property and administers rent subsidy programs to provide eligible low-income persons good, safe, affordable housing. CMHA is responsible for the management and operation of the local public housing program. They may also operate other types of housing programs such as the Housing Choice Voucher Program.

Third Sector Capital Partners is serving as an advisor to the County on this project, providing technical assistance for Pay for Success feasibility, deal construction and financial arranging. Third Sector is a nonprofit advisory firm that collaborates with government, funders and providers to create Pay for Success (PFS) and Social Innovation Finance (SIF) solutions.