New Profit Commits $1 Million in Support of Third Sector Capital Partners
Organization driving “Pay for Success” approach to cross-sector collaboration for social impact
November 19, 2015 (Boston) - New Profit, a national nonprofit venture philanthropy fund working to break down the barriers that stand between people and opportunity in America, is investing $1 million over the next four years to support Third Sector Capital Partners, Inc., a 501(c)(3) organization that leads governments, high-performing nonprofits, and private funders in building evidence-based initiatives that address society’s most persistent challenges.
Third Sector is widely recognized as a pioneer in the field of “Pay for Success” (PFS), an innovative contracting model that drives government resources toward high-performing social programs in areas such as poverty, education, child welfare, recidivism, homelessness, and wellness. PFS contracts track the effectiveness of programs over time to ensure that funding is directed toward programs that measurably improve the lives of people most in need (see how it works here).
This cross-sector approach is critical in an era of diminishing public resources for social programs. Perhaps even more importantly, the performance-driven nature of PFS means that government pays for the social outcomes achieved rather than simply reimbursing service providers for their costs, leading to greater effectiveness and sustainability.
“Third Sector is re-writing the book on how governments contract social services, by funding programs that work, measurably improving the lives of people most in need, and saving taxpayer dollars,” said Deborah Smolover, a New Profit Managing Partner who is also Executive Director of America Forward, New Profit’s nonpartisan policy initiative. “Third Sector's bold vision and growing portfolio make it an ideal fit among New Profit’s innovative and results-driven investments. It’s very exciting to work with an organization like Third Sector that shares New Profit’s deep commitment to effective cross-sector collaboration.”
The investment in Third Sector will be part of the New Profit Innovation Fund, which is New Profit’s learning lab for identifying, supporting, and scaling the best social problem solvers and their organizations. In addition to the $1 million of unrestricted funding, Third Sector will gain access to strategic support from New Profit and Deloitte, with whom New Profit has a collaborative relationship to help grantees build capacity for scale.
Founded in 2011, Third Sector has developed and launched three PFS projects targeting recidivism in Massachusetts, child welfare in Ohio’s Cuyahoga County, and chronic homelessness in California’s Santa Clara County. The organization is involved in 30 other projects at various stages of development across the country. New Profit is an investor in the Massachusetts project, the Massachusetts Juvenile Justice Pay for Success Initiative, which is financially the largest PFS project in the nation.
Third Sector was also awarded a $1.9 million grant in 2014 from the Social Innovation Fund (SIF) of the Corporation for National and Community Service to provide technical assistance to help state and local governments and service providers develop and implement PFS projects. New Profit’s nonpartisan policy arm, America Forward, is a sub-grantee and partner in this effort.
“It is an honor to join New Profit’s formidable investment portfolio, which includes several of the boldest and most entrepreneurial social ventures of our time,” said George Overholser, CEO and Co-Founder of Third Sector. “Demand for Pay for Success feasibility and construction work is soaring. New Profit's generous capacity-building grant could not have come at a better time. We are excited to undertake this partnership, as we work together to accelerate America’s transition to a performance-driven social sector.”
In addition to supporting Third Sector Capital Partners, New Profit and America Forward are actively advocating for the expansion of the Pay for Success movement. To learn more about those efforts, click here.
About Third Sector Capital Partners, Inc.
Third Sector leads governments, high-performing nonprofits, and private funders in building evidence- based initiatives that address society’s most persistent challenges. As experts in innovative public- private contracting strategies, Third Sector is an architect and builder of the nation’s most promising Pay for Success projects. A 501(c)(3) nonprofit based in Boston and San Francisco, Third Sector is supported through philanthropic and government sources, including a grant from the Corporation for National and Community Service’s Social Innovation Fund.
About New Profit:
New Profit is a national nonprofit venture philanthropy fund. The organization’s mission is to break down the barriers standing between people and opportunity in America. To do so, New Profit is working to transform the way America educates its children, propels people towards social and financial stability, and creates healthy communities. Since being founded in 1998, New Profit has collaborated with philanthropists, social entrepreneurs, foundations, businesses, policy advocates and other entities to help drive more than $1 billion towards innovative, disruptive approaches to social problem solving. New Profit’s unique, integrated approach brings together the following activities: investing through the New Profit Innovation Fund and Focus Funds; changing public policy through America Forward; and building communities of learning and action around innovative new approaches to change through the Gathering of Leaders and other activities. www.newprofit.org.