Massachusetts Leads in Using Pay For Success Contracts to Expand Adult Basic Education Services
Commonwealth first state in the nation to use performance-based investments to help close skills gaps; develop the Commonwealth’s workforce
BOSTON – Thursday, February 27, 2014 - The Patrick Administration today announced that Massachusetts will pursue Pay for Success (PFS) contracts to bring adult basic education programs to more adults across the Commonwealth. The Executive Office for Administration and Finance (EOAF) and the Executive Office of Education (EOE) today issued a request for responses (RFR) to enter into PFS contracts with the goal of helping more adults make successful transitions to employment, higher wage jobs, and higher education.
“The Adult Basic Education PFS Initiative is another way the Patrick Administration is using new approaches to solve social problems by paying for demonstrated results, not just the promise of results,” said Secretary of Administration and Finance Glen Shor. “This approach will expand education services and improve the performance of existing government programs while stretching taxpayer dollars as far as possible.”
Massachusetts is the first state in the nation to pursue PFS contracts for Adult Basic Education (ABE). The Adult Basic Education Pay for Success Initiative will invest approximately $15 million to serve a portion of more than 16,000 people on the waitlist for ABE/ESOL and English for Speakers of Other Languages (ESOL). The PFS contracts will be designed with the goal of improving program participants’ employment outcomes and increasing postsecondary degree or certificate attainment over a six-year period.
The RFR requires applicants to describe their outcomes related to increasing high school equivalency exam acquisition among participating high school dropouts, increasing ABE/ESOL participants’ rates of entering and completing postsecondary education, and increasing the number of participants who find and maintain jobs after completion of the ABE/ESOL program. The Adult Basic Education PFS Initiative will reduce the ABE/ESOL waitlist and increase opportunities for adults to build the skills that will make them an asset to employers and valuable contributors to a growing Massachusetts economy.
“Pursuing a Pay for Success project focused on adult basic education will help close the skills gap and strengthen the Commonwealth’s workforce,” said Secretary of Education Matthew Malone. “Through our efforts to strengthen the talent pipeline by increasing education and job training opportunities, we can make sure these workers—and the jobs they fill—stay here in Massachusetts.”
The announcement builds on the Patrick Administration’s landmark PFS initiative to reduce recidivism among at-risk youth. Last month, Massachusetts announced a $27 million PFS contract designed to improve outcomes for more than 900 at-risk young men from Boston to Westfield that are in the probation system or leaving the juvenile justice system. In partnership with Roca, Inc., Third Sector Capital Partners and commercial and philanthropic funders the initiative will provide intensive outreach, life skills and employment training that will reduce recidivism and help these young men become assets and resources in their community.
The Adult Basic Education PFS Initiative is part of its ongoing efforts to tackle long-term social issues by entering into PFS contracts designed to encourage innovative solutions to social problems, improve the performance of government, and save taxpayer money. PFS contracts, also called Social Impact Bonds, combine nonprofit expertise, private sector funding and rigorous evaluation to transform the way government and society respond to chronic social problems. In a PFS initiative, third-party funders assume the up-front financial risk, and taxpayers pay for a program only if a third party evaluator determines that the initiative has achieved specific outcomes that both create benefits to society and generate savings for government.
Since taking office, Governor Patrick has made targeted investments in workforce development, of which ABE and ESOL are essential components. The Governor’s Fiscal Year 2015 budget proposal includes $30 million in funding for ABE programming. Within the Department of Elementary and Secondary Education, the Office of Adult and Community Learning Services seeks to provide each and every adult who needs it with opportunities to develop the literacy skills needed to qualify for further education, job training, and better employment.