Oklahoma Launches Pay-for-Success Program for Prison-Diversion Program

The State of Oklahoma, in partnership with Tulsa-based Family & Children's Services, has announced a pay-for-success (PFS) contract with Women in Recovery aimed at reducing the female incarceration rate in the state, the highest in the nation.

Established in 2009, Women in Recovery is an intensive outpatient alternative for women facing long-term prison sentences for drug-related offenses. The program works closely with the criminal justice system and multiple community partners to ensure that program participants receive supervision, substance abuse and mental health treatment, workforce readiness training, and assistance with parent-child reunification, equipping them with the skills they need to become productive members of society. The PFS contract with the state will enable WIR to expand its services to up to a hundred and twenty-five women annually for up to five years.

According to the  agreement, the state will require Family & Children's Services to secure at least $2 million in capital to fund the WIR program each year of the five-year term of the agreement before the contract can be renewed. To reduce the financial risk for the state and assure the continued financial solvency of WIR, the George Kaiser Family Foundation will continue to provide $1.8 million a year to organizations working to address the high rate of female incarceration in Tulsa County, including WIR. The funding from the foundation allows for payments from the state to be re-invested directly into a program as milestones are achieved.

Because payments are only made when program outcomes are achieved, the pay-for-success model transfers risk from taxpayers to the private sector, allowing a state like Oklahoma to pursue promising interventions while realizing long-term cost savings.

"Since we established the program in 2009, Women in Recovery has served more than five hundred and seventy women, impacting the lives of more than twelve hundred children," said WIR senior executive program director Mimi Tarrasch. "Through trauma informed, gender-responsive treatment combined with evidenced-based programming, we are able to transform the lives of WIR women and their families. They return to their communities more productive and able to provide for themselves and their children. This contract is a great step forward for funding effective alternatives to incarceration."

"Pay for Success helps drive resources to effective programs that serve some of our society's most vulnerable communities," said Tracy Palandjian,  co-founder and CEO of Social Finance, which served as an advisor on the project. "Pay for Success is essentially about ensuring value for taxpayers—not only because government just pays for programs that make an impact, but also because these projects encourage investments in prevention. That's smart government at work."