100RC & Social Finance Launch ‘Resilience Pay for Success’ Initiative
100 RESILIENT CITIES & SOCIAL FINANCE LAUNCH
‘RESILIENCE PAY FOR SUCCESS’ INITIATIVE
NEW YORK – From the Impact Capitalism Summit in Nantucket, Mass. today, 100 Resilient Cities - Pioneered by The Rockefeller Foundation (100RC) and Social Finance, a leading nonprofit organization dedicated to mobilizing capital to drive social progress, announced a strategic partnership to launch the first-of-its-kind “Resilience Pay for Success Initiative.” The move welcomes Social Finance into a prestigious group of 100RC Platform Partners, joining multinational corporations and NGOs, such as Amec Foster Wheeler, Microsoft, the World Bank, and others. The partnership will provide guidance and support to 100RC member cities in the United States exploring Pay for Success financing opportunities – commonly known as social impact bonds.
100RC was launched to help cities around the world become more resilient to the physical, social, and economic challenges that are a growing part of the 21st century. In large part, the initiative is made possible by creating partnerships between cities and experts in private, public and nonprofit sectors to develop resilience strategies and initiatives. Today’s partnership launch integrates Social Finance into the resilience-planning process offered by 100RC to help cities better understand their resilience risks and opportunities, and identify opportunities where a Pay for Success model can be utilized to implement a city’s resilience initiatives.
Social impact bonds are innovative public-private partnerships that measurably improve the lives of those in need by driving government resources toward effective social programs. A project begins with a challenge the government is trying to address, for example, improving early childhood education or cutting prisoner recidivism – challenges that are directly related to the social and economic stresses cities face. Impact investors provide upfront, flexible funding to scale-up a proven social intervention. A nonprofit delivers the intervention over a period of several years while an independent evaluator measures the program’s outcomes. If the outcomes meet predetermined levels of success, resulting in avoided costs and social value for government – such as reduced special education costs, or increased employment – then the government repays the investors their principle, plus a modest return. Pay for Success initiatives have launched in the United States and around the globe on diverse issues – such as recidivism and early childhood education – with highly anticipated social and financial returns. The “Resilience Pay for Success Initiative” is the first of its kind to foster city-based social impact bonds.
“Cities can’t just build resilience out of thin air – they need the right tools to do it,” said 100RC President Michael Berkowitz. “Support from Social Finance to assist cities in launching social impact bonds will provide capacity to fund critical resilience initiatives that may otherwise have been shelved due to competing budget priorities.”
“Governments at all levels, especially local governments, are looking for innovative ways to deliver and ensure better outcomes for their citizens,” said Tracy Palandjian, CEO and co-founder of Social Finance. “Cities are learning to do more with less, and Pay for Success offers a promising pathway to make better use of city resources, improve the lives of our cities’ most vulnerable, and help cities become more resilient. We are excited to join the 100RC Platform Partners to work with cities to explore Pay for Success.”
A preliminary assessment of a social impact bond launched in Peterborough, UK to combat recidivism has shown promising results. The initiative aimed to reduce recidivism among a group of 1,000 prisoners by 7.5% – the threshold to trigger a repayment of funds to the private sector financial partners who funded the effort. A 2014 status report showed recidivism among the cohort was reduced by 8.4% – meaning the program helped more people stay out of prison and the bond was on course for repayment, and setting a prime example for the promise of these public-private partnerships.
As an official 100RC Platform Partner, Social Finance will offer consultative services to US-based 100RC member cities, helping them to evaluate the viability of a potential Pay for Success initiative in their jurisdiction. Today’s announcement also opens up new avenues for partnership with other 100RC Platform Partners, particularly partners and entities working with cities to build and design social resilience initiatives.
100RC and its Platform Partners are dedicated to providing network cities with solutions that integrate big data, analytics, technology, resilience land use planning, infrastructure design, and new financing and insuring products. Not only do Platform Partners help to provide cities with tools they need to build resilience; they also influence the market as other resilience tools are developed.
In addition to engaging strategic Platform Partners, 100RC provides assistance to member cities through: funding for a Chief Resilience Officer to lead the resilience efforts, resources for drafting a resilience strategy, and membership in a global network of peer cities to share best practices and challenges.
About 100RC and the 100RC Challenge
100 Resilient Cities - Pioneered by The Rockefeller Foundation (100RC) is dedicated to helping cities around the world become more resilient to the physical, social and economic challenges that are a growing part of the 21st century. 100RC supports the adoption and incorporation of a view of resilience that includes not just the shocks – earthquakes, fires, floods, etc. – but also the stresses that weaken the fabric of a city on a day to day or cyclical basis. Examples of these stresses include high unemployment; an overtaxed or inefficient public transportation system; endemic violence; or chronic food and water shortages. By addressing both the shocks and the stresses, a city becomes more able to respond to adverse events, and is overall better able to deliver basic functions in both good times and bad, to all populations.
Cities in the 100RC network are provided with the resources necessary to develop a roadmap to resilience along four main pathways: 1) Financial and logistical guidance for establishing an innovative new position in city government, a Chief Resilience Officer, who will lead the city’s resilience efforts; 2) expert support for development of a robust resilience strategy; 3) Connecting member cities to solutions, service providers, and other partners who can help them develop and implement their resilience strategies; and 4) Membership in a global network of member cities who can learn from and help each other. Through these actions, 100RC aims not only help individual cities become more resilient, but will facilitate the building of a global practice of resilience among governments, NGOs, the private sector, and individual citizens.
The 100RC Challenge launched in 2013 as a $100 million commitment to build urban resilience.
Officials or leaders or major institutions from almost 400 cities applied to the Challenge, and the initial 32 cities were announced in December 2013. 100RC announced results of the second round of the challenge last December. For more into on the Challenge, visit: www.100resilientcities.org/challenge.
100RC is financially supported by The Rockefeller Foundation and managed as a sponsored project by Rockefeller Philanthropy Advisors (RPA), an independent 501(c)(3) nonprofit organization that provides governance and operational infrastructure to its sponsored projects.
About Social Finance
Social Finance is a nonprofit organization that is dedicated to mobilizing capital to drive social progress. The organization focuses on structuring and managing impact investments that will unlock capital to fund effective solutions to persistent social problems and drive an outcomes-focused social sector. The firm develops Pay for Success projects and Social Impact Bonds, innovative multi-stakeholder opportunities that scale performance-driven social programs, delivering proven results to those in need.