[Senate Hearing 114-621]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 114-621
 
                      CAN EVIDENCE-BASED PRACTICES
                    IMPROVE OUTCOMES FOR VULNERABLE
                       INDIVIDUALS AND FAMILIES?

=======================================================================

                                HEARING

                               before the

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 10, 2016

                               __________





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                          COMMITTEE ON FINANCE

                     ORRIN G. HATCH, Utah, Chairman

CHUCK GRASSLEY, Iowa                 RON WYDEN, Oregon
MIKE CRAPO, Idaho                    CHARLES E. SCHUMER, New York
PAT ROBERTS, Kansas                  DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming             MARIA CANTWELL, Washington
JOHN CORNYN, Texas                   BILL NELSON, Florida
JOHN THUNE, South Dakota             ROBERT MENENDEZ, New Jersey
RICHARD BURR, North Carolina         THOMAS R. CARPER, Delaware
JOHNNY ISAKSON, Georgia              BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio                    SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania      MICHAEL F. BENNET, Colorado
DANIEL COATS, Indiana                ROBERT P. CASEY, Jr., Pennsylvania
DEAN HELLER, Nevada                  MARK R. WARNER, Virginia
TIM SCOTT, South Carolina

                     Chris Campbell, Staff Director

              Joshua Sheinkman, Democratic Staff Director

                                  (ii)
                                  
                                  
                                  
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hatch, Hon. Orrin G., a U.S. Senator from Utah, chairman, 
  Committee on Finance...........................................     1
Wyden, Hon. Ron, a U.S. Senator from Oregon......................     3

                               WITNESSES

Berlin, Gordon L., president, MDRC, New York, NY.................     6
Sorenson, James Lee, chairman, board of directors, Sorenson 
  Impact Foundation, Salt Lake City, UT..........................     8
Bright, Tesha, nurse home visitor, Nurse-Family Partnership of 
  Essex and Morris Counties, Newark, NJ..........................    10
Doar, Robert, former Commissioner, New York City Human Resources 
  Administration, and current Morgridge Fellow in Poverty 
  Studies, American Enterprise Institute, Washington, DC.........    12

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Berlin, Gordon L.:
    Testimony....................................................     6
    Prepared statement...........................................    25
Bright, Tesha:
    Testimony....................................................    10
    Prepared statement...........................................    32
Doar, Robert:
    Testimony....................................................    12
    Prepared statement...........................................    37
Hatch, Hon. Orrin G.:
    Opening statement............................................     1
    Prepared statement...........................................    42
Sorenson, James Lee:
    Testimony....................................................     8
    Prepared statement...........................................    43
Wyden, Hon. Ron:
    Opening statement............................................     3
    Prepared statement...........................................    45

                             Communications

Adoption Rhode Island............................................    47
American Evaluation Association..................................    49
America Forward..................................................    50
Campaign to End Obesity Action Fund (CEO-AF).....................    54
Center for the Study of Social Policy............................    56
Child Trends.....................................................    60
Corporation for Supportive Housing (CSH).........................    63
Institute for Child Success......................................    68
International Foster Care Alliance (IFCA)........................    71
Local Initiatives Support Corporation (LISC).....................    77
The National Campaign to Prevent Teen and Unplanned Pregnancy....    80
Nonprofit Finance Fund (NFF).....................................    85
Perin, Deborah...................................................    87
Quantified Ventures..............................................    91
ReadyNation......................................................    91
Results for America..............................................    92
Save the Children Action Network (SCAN)..........................    93
Social Finance...................................................    95
Third Sector Capital Partners, Inc...............................    96


                      CAN EVIDENCE-BASED PRACTICES



                    IMPROVE OUTCOMES FOR VULNERABLE



                       INDIVIDUALS AND FAMILIES?

                              ----------                              


                         TUESDAY, MAY 10, 2016

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 2:12 p.m., 
in room SD-215, Dirksen Senate Office Building, Hon. Orrin G. 
Hatch (chairman of the committee) presiding.
    Present: Senators Grassley, Crapo, Scott, Wyden, Stabenow, 
Cantwell, Menendez, Bennet, and Warner.
    Also present: Republican Staff: Chris Campbell, Staff 
Director; and Becky Shipp, Health Policy Advisor. Democratic 
Staff: Joshua Sheinkman, Staff Director; Michael Evans, General 
Counsel; and Laura Berntsen, Senior Advisor for Health and 
Human Services.

 OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM 
              UTAH, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. This hearing will come to order. Good 
afternoon, everybody. I would like to welcome everyone to 
today's hearing on evidence-based practices and their potential 
impact on our child welfare system.
    According to the Social Policy Institute, ``Evidence-based 
practice is a process in which the practitioner combines well-
researched interventions with clinical experience and ethics, 
and client preferences and culture to guide and inform the 
delivery of treatments and services. The practitioner, 
researcher, and client must work together in order to identify 
what works for whom and under what conditions. This approach 
ensures that the treatments and services, when used as 
intentioned, will have the most effective outcomes as 
demonstrated by the research. It will also ensure that progress 
with proven success will be more widely disseminated and will 
benefit a greater number of people.''
    Over the years, in the effort to use taxpayer dollars more 
efficiently, policymakers have attempted to incorporate more 
evidence-based practices in order to improve outcomes for 
vulnerable children and, of course, their families. Just 
looking at the jurisdiction of the Senate Finance Committee, 
there are a couple of major examples, such as the Regional 
Partnership Grants and the Maternal, Infant, and Early 
Childhood Home Visiting Program.
    Many experts and observers agree that when implemented 
correctly and with strict adherence to the model, evidence-
based interventions can be an effective strategy to help 
vulnerable families and at-risk individuals. They can also 
reduce bureaucracy and eliminate the creation of perpetual and 
redundant programs that do not work, and they can allow for 
local leaders to decide what is best and inject private-sector 
creativity into social services.
    Most important, evidence-based interventions help ensure 
that taxpayers only pay for what works. In most programs, the 
Federal Government and States pay for processes or simply 
reimburse for costs, while evidence-based interventions, when 
implemented correctly, help guarantee that government pays for 
success in achieving a desired outcome.
    This is particularly true in the context of a child welfare 
system. For example, we know that untreated substance abuse and 
mental health issues can lead to situations where children are 
neglected, which is the most common impetus for removing 
children from their homes and placing them in the foster care 
system.
    However, if we can find ways to effectively address these 
conditions, more children will remain safely at home. That is 
why Senator Wyden and I and others on this committee have been 
working for some time now on a proposal to improve the child 
welfare system.
    A key component of the Hatch-Wyden proposal is that these 
types of interventions must be evidence-based. Currently, we 
are working with our House colleagues on bipartisan, bicameral 
legislation that we hope will provide more effective up-front 
services to help vulnerable families.
    As part of the discussion on evidence-based practices, we 
will also focus on what some call social impact financing, 
sometimes referred to as social impact bonds, social impact 
partnerships, or pay for success. I am a strong supporter of 
this approach, which is why I am pleased to have been able to 
work with Senator Bennet to introduce legislation that will 
foster the creation of public/private partnerships that will 
harness philanthropic and other private-
sector investments to establish or scale up evidence-based 
social and public health programs.
    Furthermore, under our Social Impact Partnership bill, the 
Federal Government would establish desired outcomes to pressing 
social challenges that, if achieved, would improve lives and 
preserve taxpayer resources. State and municipal governments 
could then submit proposals to work towards those outcomes by 
establishing or scaling up existing evidence-based 
interventions.
    We believe this program would encourage private-sector 
investors to provide the necessary capital to establish or 
expand the interventions. Then, if an independent evaluator is 
able to certify that the desired outcomes are achieved at 
reduced costs, investors would be paid back their initial 
investment plus a small return from the realized government 
savings.
    There are a number of reasons I believe that social impact 
financing is key to providing or improving outcomes for 
vulnerable children and families. For example, social impact 
financing provides for continual program improvement and 
ensures that all parties remain focused on the performance of 
the program and have the ability to make ongoing adjustments to 
ensure the outcomes are realized.
    In addition, social impact financing gives local leaders 
the flexibility to design and address programs to fit local 
needs in order to ensure they have the desired impact. And, as 
I stated earlier, when done correctly, social impact financing 
ensures that taxpayers pay only for what works.
    In most Federal programs, taxpayers are on the hook for set 
costs of processes and/or reimbursements with little or no 
regard for effectiveness. With social impact financing, success 
is measured by the ability of the program to achieve a desired 
outcome, and taxpayers only have to pay for whatever achieves 
that objective.
    Now, some critics of social impact financing may point out 
examples where the proposed interventions have not produced the 
desired results. They will raise examples of specific instances 
in which an intervention did not achieve the desired outcome 
and try to claim that it was failure, but I think these critics 
are missing the point.
    Make no mistake, there have been instances in which, under 
a social impact financing model, a specific proposal has not 
produced the desired outcome and was eventually discontinued. 
However, that is precisely how the model is supposed to work. 
Indeed, programs and policies that are flexible enough to 
respond to outcomes--recreating and disseminating successes 
while eliminating failures--is our goal with social impact 
financing.
    That said, I am willing to admit that there is much more 
that we can and should learn about the implementation and 
delivery of social impact financing. That is part of the reason 
for today's hearing.
    Today we will hear from a distinguished panel of witnesses 
who will discuss evidence-based policies and practices and 
share with us some of their successes and warnings for the 
future. So I look forward to an interesting and robust 
discussion of all of these issues.
    With that, I will turn to Senator Wyden for his opening 
remarks.
    [The prepared statement of Chairman Hatch appears in the 
appendix.]

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you very much, Mr. Chairman. I commend 
you for holding this hearing and also making reference to an 
additional piece of legislation, the bill that you and I and 
our staffs have been working on for quite some time, the 
Families First legislation. My hope is that we will be able to 
make significant progress on that even before the end of the 
session.
    I would also like to start off by noting, Mr. Chairman, 
that this may be the first ever hearing the committee has held 
on this issue--the question of evidence-based delivery and 
funding for social welfare programs. I think it is good that we 
are setting a precedent here, because it is long overdue.
    I also want to single out Senator Bennet because, suffice 
it to say, practically every meeting I go to when people turn 
to the issue of policy, Senator Bennet comes back to the 
question of child welfare. He comes back to it again and again 
and again. I want him to know I appreciate it. He is the leader 
of this committee on this issue, and we are glad he is doing 
it.
    Now, today is a good opportunity to dig into an issue that 
really ought to be underpinning the work that the Congress does 
every day. That is to say, asking whether the laws that are 
being written are working as they ought to be. So the real 
question this afternoon is, does the way the Federal Government 
funds social welfare programs obstruct or facilitate their 
improvement?
    In this committee, there are shining examples on both sides 
of the spectrum. Home visiting grants fund a variety of models 
to help parents of young children essentially improve their 
parenting skills. More resources are available for programs 
that can demonstrate the best results, with help along the way 
for newer, promising programs to build up an evidence base.
    Home visiting models have had significant success. They 
have led to healthier births, reduced child maltreatment, 
reduced criminal justice system involvement, and higher 
employment rates for the parents.
    On the other end of the spectrum is the Temporary 
Assistance for Needy Families program. There are real questions 
about whether the way success is measured in TANF is leading to 
success for the families it is meant to help and who urgently 
need this assistance.
    Instead of rewarding States for helping families find work 
or reduce poverty, TANF rewards States for simply reducing the 
number of families they serve regardless of need. While a small 
amount of TANF dollars is reserved for welfare research, there 
is really no process for collecting feedback to ensure that 
what is being paid for is actually producing real results. 
Congress ought to be finding ways to build programs that ensure 
continuous improvement.
    Now, there are certainly limitations to this approach of 
funding what works and not funding what does not. To start, 
researching and evaluating programs can be expensive. In some 
programs, it could be unethical to have a control group that is 
actually denied services.
    For example, it would be wrong to deny a child access to 
foster care when he or she is being abused or neglected just 
for the sake of scientifically evaluating the effects of foster 
care against a control group. Additionally, bringing evidence-
based programs to a larger scale can also be expensive. They 
often rely on a highly educated and trained workforce. So 
progress can be slow on these kinds of programs.
    Finally, reasonable people can differ on what it really 
means for a program to be successful, using a variety of 
measures. For example, there is no question the SNAP program 
has had success in reducing hunger and food insecurity for many 
families across the Nation, but others may place less value on 
those outcomes.
    I know that witnesses today will speak to new approaches to 
testing out and paying for innovation, especially social impact 
financing or what has come to be called pay for success.
    My home State of Oregon is exploring the feasibility of 
social impact financing. Like many States, Oregon is witnessing 
firsthand the challenges with deciding whether taxpayer dollars 
should be used for this type of finance.
    I look forward to discussion around the strengths and 
limitations of the model.
    So, Mr. Chairman, again I commend you and Senator Bennet 
for bringing the conversation about these innovative 
partnerships to the Senate and to this committee with the 
Social Impact Partnership Act. You have a lot to cover today.
    I would say to our witnesses, we commend you for the 
breadth of expertise you bring to the conversation. We look 
forward to hearing from you.
    Thank you, Mr. Chairman.
    The Chairman. Well, thank you, Senator Wyden.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. We have a very impressive group of 
individuals here today. I would like to thank each of you for 
coming and lending your expertise to us.
    First we will hear from Mr. Gordon Berlin. Mr. Berlin is 
the president of MDRC, a nonprofit, nonpartisan research 
organization based in New York City and Oakland, CA. The 
organization is dedicated to learning what works best to 
improve the lives of low-income individuals.
    Before joining MDRC in 1990, Mr. Berlin was the Executive 
Deputy Administrator for Management, Budget, and Policy of the 
New York City Human Resources Administration. He has also 
served as the deputy director of the Ford Foundation's Urban 
Poverty Program, and also worked as a program analyst and 
project officer in the U.S. Department of Labor's Employment 
and Training Administration.
    Next, we will have the privilege of hearing from James Lee 
Sorenson. Mr. Sorenson is a world-renowned entrepreneur, 
business leader, societal innovator, philanthropist, and impact 
investor. Mr. Sorenson serves as president of the Sorenson 
Impact Foundation, which funds sustainable, scalable endeavors 
that maximize the positive impact on the lives and the 
societies they touch and have been very, very important.
    In 2012, Mr. Sorenson contributed $13 million to the 
University of Utah's David Eccles School of Business for the 
creation of the Sorenson Impact Center, whose mission is to 
accelerate sustainable social change through the use of 
capital, innovation, data, and cross-sector collaboration.
    Mr. Sorenson has been instrumental in developing several 
new industry innovations through his private-sector work. This 
has included digital compression software that has helped usher 
in the online video revolution and video relay services that 
transformed opportunities for deaf and hard of hearing 
individuals. I am really proud of what he has been able to do.
    Our third witness will be Ms. Tesha Bright. Ms. Bright is a 
nurse home visitor with the Nurse-Family Partnership, referred 
to as NFP, of Essex County, NJ.
    For nearly 8 years, Ms. Bright has worked diligently to 
foster long-term success for low-income first-time moms, their 
babies, and the community at large by delivering the evidence-
based NFP model of maternal health, child health and 
development, and breaking the cycle of poverty.
    Prior to becoming an NFP nurse, Ms. Bright worked as a 
medical surgical nurse with a neurology focus and as a 
pediatric home care nurse, which she continues to do in order 
to maintain her clinical skills.
    Finally, we will hear from Robert Doar. Mr. Doar is the 
Morgridge Fellow in Poverty Studies at the American Enterprise 
Institute, or AEI, where he studies and evaluates how improved 
Federal policies and programs can reduce poverty and provide 
opportunities for vulnerable Americans. Specifically, Mr. Doar 
focuses on the employment, health, and well-being of low-income 
Americans and their children.
    Before joining AEI, he was Commissioner of New York City's 
Human Resources Administration where he administered 12 public 
assistance programs.
    We will hear from the witnesses in the order they were 
introduced. So, Mr. Berlin, we will start with you. Please 
proceed with your opening statement, then we will go across the 
table.

           STATEMENT OF GORDON L. BERLIN, PRESIDENT, 
                       MDRC, NEW YORK, NY

    Mr. Berlin. Thank you, Mr. Chairman.
    To ensure a positive rate of return for both taxpayers and 
beneficiaries on the billions of dollars invested in the 
Nation's social education and health programs, Congress, first 
with the Bush administration and then with the Obama 
administration, has quietly forged a bipartisan consensus 
around the need to build evidence of effectiveness. The most 
recent example is the Evidence-Based Policymaking Commission.
    The commitment to evidence is paying off. We are beginning 
to learn what works. Now the challenge ahead is learning what 
works at scale and ensuring that Federal funds are spent on the 
evidence-based programs found to work.
    Perhaps the largest evidence-based program of the era is 
the Maternal, Infant, and Early Childhood Home Visiting 
program, which was largely crafted by this committee. As a 
model for future efforts, several elements of that law are 
worth emphasizing.
    Using a tiered funding structure, Federal funds can be 
spent only on home visiting programs that meet an evidence-
based designation, making it much more likely that program 
funds would make a difference for families. And funds were set 
aside for research, including a rigorous national evaluation to 
ensure continuous learning and to enable States to test 
innovative new approaches.
    Congress has continued this focus on evidence in more 
recent legislation, including the Workforce Innovation and 
Opportunity Act and the Every Student Succeeds Act. Both laws 
contain provisions for the use of pay for success, a promising 
new vehicle for evidence building. The pending Social Impact 
Partnership Act would support States and localities in the use 
of social impact bonds to tackle an even wider range of social 
and public health challenges.
    As Congress seizes the initiative on evidence building, it 
can make the most of its investments in the following four 
ways. It can create a culture of continuous improvement. Rather 
than being focused on up or down judgments about programs or 
policies, government should focus on using research evidence to 
make programs more effective over time, changing direction only 
when continuous improvement does not yield expected results.
    Secondly, it can bolster agency-directed research capacity 
while also supporting pay-for-success innovation. Both vehicles 
build evidence, but in different yet complementary ways. One is 
not a substitute for the other. The agency research model is 
preferable when the goal is to develop a reliable body of 
evidence about what works to address a persistent problem.
    The social impact bond or SIB model, with its focus on 
individual deals, is an excellent vehicle to encourage local 
innovation tied to strong evidence building and is a means of 
equipping local government with the tools to assess program 
effectiveness.
    Third, Congress can improve access to data for more 
efficient evaluations while still protecting confidentiality. 
The public sector collects a wealth of data that could be used 
to track progress and enhance performance, yet for privacy and 
other reasons, Federal and State agencies and their contractors 
are often not able to regularly access and share data for 
evaluation purposes.
    Fourth, we need to clarify Federal authority to conduct 
this kind of research. Inconsistencies in Federal authority to 
conduct independent research and evaluation as well as costly 
procurement, paperwork reduction, and other contracting rules 
are often obstacles to efficient evidence building.
    Turning to social impact bonds, the SIB vehicle is a 
valuable tool for stimulating experimentation, innovation, and 
the scaling of promising approaches at the State and local 
level, and the SIPA bill is an important step forward in the 
effort to support new deals.
    The Federal Government could enhance the value of SIBs as a 
learning-what-works tool by stating clearly that the goal is to 
build reliable evidence about what works and by supporting the 
evaluation costs of SIB projects only when they use rigorous 
research designs capable of reliably attributing causality.
    Secondly, government could signal its support for a 
benefit-cost perspective that places equal weight not solely on 
government budget savings, but also on economic returns to 
participants and society as a whole.
    Third, it could stimulate deals by supporting State and 
local pay-for-success projects, but insist that State and local 
agencies--to the maximum extent possible--commit to sustaining 
programs that work after a SIB deal ends.
    And fourth, it could ensure transparency by requiring 
public release of evaluation results, the payment terms of 
deals, and final benefit-cost calculations including any lost 
savings that would result if a government did not continue to 
support effective initiatives.
    In conclusion, the bipartisan commitment to building 
evidence heralds better programs, more effective policies, and 
more responsible use of taxpayer dollars. But there is more to 
be done, including set-asides with funding streams to build 
evidence, continued use of tiered funding structures, and 
rewards for localities to move more of their formula funding 
into programs with evidence.
    Thank you very much.
    The Chairman. Thank you, sir.
    [The prepared statement of Mr. Berlin appears in the 
appendix.]
    The Chairman. Mr. Sorenson, let us take your testimony at 
this time.

STATEMENT OF JAMES LEE SORENSON, CHAIRMAN, BOARD OF DIRECTORS, 
         SORENSON IMPACT FOUNDATION, SALT LAKE CITY, UT

    Mr. Sorenson. It is a pleasure and an honor to be with you 
today and discuss a matter of great importance to me, which is: 
how can we more effectively measure and direct social spending 
in this country to produce successful outcomes?
    I have been an entrepreneur for most of my life. During 
that time, I have been greatly blessed and, as a result of 
that, have decided to spend more of my time and efforts and 
financial resources in giving back.
    I was unsatisfied with traditional philanthropy in some 
respects in that, compared to the business world that I came 
from, it was inefficient, unaccountable, and really did not 
move the needle much in terms of solving the problems that we 
face with those who have needs.
    Four years ago, I endowed an academic center at the 
University of Utah's Business School in order to help direct 
private and philanthropic capital to help solve some of the 
most perplexing social problems, both here in America and 
abroad, in more measureable and scalable ways. Now since its 
inception, the Sorenson Impact Center has facilitated over $100 
million in funding to scalable, sustainable solutions to 
problems like chronic unemployment, criminal recidivism in the 
U.S., unsafe drinking water, access to health and education, 
and in rural areas, poverty alleviation.
    Over the past 2 years, the Center has also been engaged in 
structuring nearly a dozen pay-for-success or social impact 
financing projects around the country with a variety of 
stakeholders, including State and local governments, nonprofit 
organizations, academics, philanthropists, and other funders.
    These projects are aimed at addressing some of the most 
complex and challenging issues facing our society today, 
including intergenerational poverty, homelessness, foster care, 
mass incarceration, chronic unemployment, educational 
achievement gaps, mental illness, and substance use disorders, 
to name a few. But most importantly--and this is the key--they 
do it in a way that is more effective because they employ 
evidence-based practices that are correlated to measured 
outcomes.
    I would like to give just kind of a brief overview of how 
one of these pay-for-success projects works.
    It usually focuses--number one--on a social issue where a 
preventative intervention is less costly than the downstream 
treatment or chronic care. It is a permanent fix as opposed to 
a temporary stopgap. Pay for success also engages the private 
sector to provide the risk capital in the funding intervention, 
which enables more innovation and trial and error to be 
utilized.
    Number two, meaningful measured outcomes are central to pay 
for success--not activities, not the promise of outcomes, but 
actual achieved outcomes that are measured and validated. An 
example may be the number of homeless who obtain permanent 
housing, as opposed to those who may be off the streets but in 
a temporary shelter.
    Social investors, along with foundations and 
philanthropists, provide the up-front risk capital to fund the 
service providers that provide the necessary interventions. You 
then have an independent evaluator that conducts a rigorous 
evaluation in order to determine whether the service produced 
specific, predetermined outcomes.
    Finally, if the predetermined outcomes are achieved and the 
project is successful as defined by all of the parties, which 
usually means that the payer is saving as much or more money 
than they would have otherwise, then and only then does the 
payer, which could be a government, a hospital, or whichever 
entity promised to pay back those who funded the interventions, 
only then do they pay back the initial funders.
    These projects are noteworthy for a number of reasons. They 
are focused on definitive, measurable indicators of success 
that are focused on outcomes. There is greater transparency and 
accountability. You learn what programs work, what programs do 
not work, and can allocate scarce resources to more effective 
funding. They also foster a competitive social services 
environment with a virtuous race to the top for nonprofits and 
other service providers to be impactful and have evidence-based 
programs that are eligible for the funding.
    Now, while the Federal Government has thus far played a 
role by encouraging this developing of pay-for-success 
initiatives, it has been conspicuously absent in one critical 
and important aspect. In many of the State and local projects, 
the lion's share of the societal value and economic benefit 
generated actually accrues to the Federal Government, not the 
local budgets. We call this the ``wrong pockets'' problem, in 
industry terms, because there is effectively a mismatch between 
who gets asked to pay for the program and ultimately who stands 
to benefit the most from that program.
    This is why I am thankful to be here in support of this 
legislation that Chairman Hatch and Senator Bennet are 
introducing that addresses this issue by enabling government to 
pay for a portion of the project where the benefits are accrued 
by the Federal Government. This will enable these programs to 
be able to scale up, because State and local governments 
cannot, in most cases, tap Federal funding to pay for outcomes.
    What is remarkable about this model is the level of 
bipartisan support in State governments and city halls around 
the country. People from across the political spectrum agree 
that it makes sense to be more results-oriented, data-driven, 
and ultimately more accountable in the way we address social 
problems.
    Also, the level of bipartisan support is a tribute to the 
Senate bill itself, in that it is a bipartisan effort led by 
Senators Hatch and Bennet, and there are 41 cosponsors in the 
House. It is also supported by Chairman Ryan.
    In my experience as an impact investor--as one who is 
seeking for measurable, more effective ways to direct my 
philanthropy--evidence-based policies and pay-for-success 
financing really make great sense. They address the great 
social and health problems of society today in a way that 
produces successful outcomes.
    Thank you for this opportunity for me to offer my support 
for this legislation.
    The Chairman. Thank you, and we appreciate all of the 
efforts that you are putting forward, all of you. We are just 
very appreciative of all four of you here today.
    [The prepared statement of Mr. Sorenson appears in the 
appendix.]
    The Chairman. Ms. Bright, we will take your testimony now.

  STATEMENT OF TESHA BRIGHT, NURSE HOME VISITOR, NURSE-FAMILY 
      PARTNERSHIP OF ESSEX AND MORRIS COUNTIES, NEWARK, NJ

    Ms. Bright. Good afternoon, Chairman Hatch, Ranking Member 
Wyden, and members of the committee. Thank you for the 
opportunity to testify on behalf of the Nurse-Family 
Partnership Program serving Essex and Morris Counties, NJ in 
support of the life-changing potential of evidence-based 
programs like NFP.
    Additionally, on behalf of the mothers, children, and 
families served by the Nurse-Family Partnership, I want to 
thank this committee for its commitment to improving the health 
and well-being of at-risk families with dedicated funding for 
evidence-based home visiting programs. Your work is paving the 
way for healthier, brighter futures.
    I am Tesha Bright and have worked as an NFP nurse home 
visitor for nearly 8 years. As a nurse home visitor, I serve a 
regular caseload of 25 first-time, low-income mothers and 
families.
    A multitude of unfortunate factors in a community make 
Nurse-Family Partnership a critical element of the counties' 
continuum of services for prevention and families in need. 
Still, we only reach about 3 percent of the population who 
could benefit from our services.
    The Nurse-Family Partnership is a voluntary program that 
partners a pregnant woman and her first child living in poverty 
with a registered nurse who provides her with home visits 
beginning early in pregnancy until her child's second birthday.
    Over that period of time, the nurse forms a trusted 
relationship with each mom that empowers her to have a healthy 
pregnancy, improve her child's health and development, and set 
goals to achieve economic self-sufficiency. By achieving these 
program objectives, many of the major risks for poor health and 
social outcomes can be significantly reduced.
    Over these years, I have worked with hundreds of young 
parents, many involved with the New Jersey Department of Child 
Protection and Permanency. I have worked as part of the 
treatment team providing a variety of services for this 
population, but most importantly, my role is to provide 
consistency and structure as we plan and prepare for their 
first child.
    Working with this population is especially trying, given 
the extensive mental health backgrounds, lack of trust, 
transient lifestyles, and histories of sexual and drug abuse. 
Throughout each client's involvement in NFP, she will 
experience many moments of success, but also many challenges. I 
am a constant partner through both of these periods.
    I think of one of my 15-year-old clients who, at the time, 
was living in a homeless shelter and was initially denied my 
services by shelter staff. They believed that this client would 
not be parenting her child, and that the baby would be placed 
in a foster home upon discharge from the hospital until family 
could be located.
    Through persistence and a more flexible visitation 
schedule, I was able to not only begin seeing the client, but I 
was also able to deliver content in creative ways and encourage 
excitement about motherhood.
    I received a 3 a.m. call when she went into labor. Upon 
reaching the hospital, I discovered she was being treated 
without compassion. This experience had the potential to be 
quite traumatic for this teen, but by advocating for her and 
pulling staff aside, I ensured she was treated fairly.
    In the end, we delivered a healthy baby girl, and capturing 
those first photos of mom and baby were priceless. 
Breastfeeding was initiated at that time. Sadly, further 
arrangements were not made, and mom went home without her baby, 
but I worked with the client to visit her infant. Over that 
time, this client continued to pump and provide breastmilk for 
her baby. Our work encouraged a continued bond until both were 
united at a group home shelter.
    Another case involved pregnant sisters living in a foster 
home where lack of communication and cultural differences made 
the home a silent battleground of passive-aggressive behavior 
and disrespect. This example shows how my job is so much more 
than nursing duties. My training in motivational interviewing 
and family communication was instrumental in encouraging open 
communication and understanding between all parties, which 
afforded the development of chore charts and house rules agreed 
upon by all.
    I have learned many things over my years as a nurse home 
visitor that have helped me serve my clients better. I believe 
that the beauty of the model is meeting our clients where they 
are and building on their own desire to change their lives.
    NFP can help break the cycle of poverty by empowering young 
mothers to become knowledgeable parents who are able to 
confidently care for their children and guide them along a 
healthy life course. NFP nurses use a client-centered approach, 
which means the nurse is constantly adapting to the needs of 
the family, ensuring that each visit is relevant and valued by 
the parents. This can create positive, lasting change for the 
family that sustains long after our time as a nurse home 
visitor ends.
    NFP applauds Congress for their bipartisan, bicameral 
support for the MIECHV program and, in particular, this 
committee for your collective commitment to funding programs 
proven to work. We also believe that pay for success represents 
an opportunity for smart policy to incentivize the growth of 
evidence-based programs like Nurse-Family Partnership.
    The Nurse-Family Partnership thanks the committee for a 
continued interest in how evidence-based programs can improve 
the daily lives of people who need them most. I hope that the 
committee will continue to support and expand funding streams 
that promote evidence-based social programs.
    Thank you again, Chairman Hatch, Ranking Member Wyden, and 
members of the committee, for the opportunity to testify today.
    The Chairman. Well, thank you, Ms. Bright.
    [The prepared statement of Ms. Bright appears in the 
appendix.]
    The Chairman. Let us now finish with you, Mr. Doar.

 STATEMENT OF ROBERT DOAR, FORMER COMMISSIONER, NEW YORK CITY 
HUMAN RESOURCES ADMINISTRATION, AND CURRENT MORGRIDGE FELLOW IN 
 POVERTY STUDIES, AMERICAN ENTERPRISE INSTITUTE, WASHINGTON, DC

    Mr. Doar. Thank you. Chairman Hatch and other distinguished 
members of the committee, thank you for the opportunity to 
testify today on how the use of evidence-based policy can 
improve our safety net and help low-income Americans move up.
    Evidence-based policymaking entails compiling strong 
evidence about what works and what does not, using 
administrative data systems more effectively, and ending 
failing programs while scaling up successful ones.
    During my 18 years administering State and local social 
safety-net programs, I have been a part of a number of efforts 
that modeled this approach. Today I would like to share some 
lessons learned in those experiences.
    In New York City, we performed rigorous evaluations of over 
30 new initiatives as part of Mayor Bloomberg's Center for 
Economic Opportunity. One initiative in particular received a 
lot of attention, the first conditional cash transfer program 
in the developed world.
    The program, Family Rewards, provided cash payments to 
individuals who took positive actions like going to the doctor 
and ensuring their children regularly attended school. MDRC 
conducted the evaluation of the experiment.
    While participants saw lower poverty levels as a result of 
the program, most of the income gains came from the transfers 
themselves, and not from increased earnings. Once the program 
ended, the treatments group's incomes were not substantially 
different from the control group.
    We were also disappointed to see that these incentives did 
not significantly change the behavior of participants in the 
vast majority of outcomes sought in the program. As a result of 
these findings, Mayor Bloomberg ended the program.
    Just as programs failing to show results must be ended, 
programs backed by rigorous evaluations should see more 
resources channeled their way. One idea that was the subject of 
rigorous evaluations and consistently delivered positive impact 
on outcomes was the Nurse-Family Partnership.
    Critically, the creators of the program conducted three 
randomized controlled trials in different places to evaluate 
the program and followed up with participants in the study 
regularly for decades. They found that it generated long-
lasting benefits for both mothers and their children.
    Once the Nurse-Family Partnership model had developed this 
strong evidence base, it warranted being adopted on a larger 
scale. Mayor Bloomberg's Center for Economic Opportunity made 
scaling up the program a priority. The program grew by 383 
percent between 2007 and 2011, and our program made a 
significant impact.
    Children in the program are 16 percentage points more 
likely to be current with their immunizations at 24 months, and 
teenage mothers in the program are 15 percentage points more 
likely to obtain a high school diploma or GED.
    Similarly, pay-for-success models--also known as social 
impact bonds--allow innovative social programs to receive 
funding from private investors, and, if they meet an agreed-on 
metric of success, only then will government compensate this 
initiative and its investors. This approach has tremendous 
potential, but will also come with administrative challenges, 
and has only been utilized in a handful of trials in the United 
States.
    Federal initiatives like the proposed Hatch-Bennet Social 
Impact Partnership Act are worth pursuing as they offer help to 
States and localities to manage such programs effectively.
    In order to build the evidence base around policy ideas, 
researchers need high-quality data, but there are inherent 
flaws in government survey data, our primary tool for 
collecting information about safety-net programs. Dr. Bruce 
Meyer of the University of Chicago has documented in several 
studies that misreporting of income and benefit receipt are 
common in surveys.
    In one recent study that matched State administrative 
records to Census Bureau survey data, he and a coauthor found 
that the Current Population Survey missed program receipt for 
40 percent of SNAP recipients and 60 percent of TANF and 
general assistance recipients.
    Administrative data is important not only because it 
provides more accurate information, but also because it enables 
new ways of evaluating policies and practices. For instance, 
randomized controlled trials are expensive and time-consuming. 
After separating participants into treatment and control groups 
and administering the treatment, researchers must keep up with 
the recipients for years, tracking their life outcomes through 
surveys.
    In recent years, an alternative has emerged called low-cost 
RCTs, in which researchers can use existing administrative data 
already collected for other purposes as the basis for their 
evaluations. Administrative data is also key to a similar 
evidence-based policymaking technique: rapid-cycle evaluation.
    Rapid-cycle evaluation helps policymakers make tough 
decisions about the best way to implement programs and whether 
reforms and tweaks make sense.
    In New York City, we performed a number of rapid-cycle 
evaluations. We piloted a child support initiative that invited 
noncustodial parents to an initial meeting at the customer 
service center in hopes that we could increase the number of 
orders established by trying to reach an agreement in a 
friendlier environment than a courtroom. We tested 
incorporating different messages into the SNAP online education 
that behavioral economics evidence suggested would improve 
accuracy and honesty from applicants.
    While all policymakers believe their decisions are backed 
by evidence, evidence-based policymaking is about following a 
specific process. New and existing programs must be evaluated 
in a way that establishes impact over a counterfactual.
    Programs that rigorous evaluation show to be effective 
should be scaled up, while initiatives failing to have success 
must be phased out. Administrative data should be used to make 
it easier to conduct evaluations and to enable incremental 
improvements in program administration.
    Thank you.
    [The prepared statement of Mr. Doar appears in the 
appendix.]
    The Chairman. Well, thanks to all four of you. I have a few 
questions here I would like to ask, and others as well may have 
questions.
    Mr. Sorenson, let me just start with you. I want to thank 
you so much for being here today and for the incredible work 
you are doing out there in Utah, my home State.
    There is no question in my mind you are truly an innovator 
and a thought leader in moving social impact financing forward. 
Now, you mentioned that you began the Sorenson Impact Center, 
in part, out of dissatisfaction with traditional philanthropy. 
Can you elaborate on that dissatisfaction, and how do you hope 
the Sorenson Impact Center could change, challenge, and help 
the field?
    Mr. Sorenson. First of all, I want to say that I think 
traditional philanthropy does really good things. I do not mean 
to in any way impugn what they do. I just feel that because 
there is not always a culture where measurement is involved and 
transparency in what they do, that it is not as effective as it 
could be.
    As one who is interested in really moving the needle in 
terms of solving problems, I think every dollar is a scarce 
resource, and I want to see it, in many cases, magnified, and, 
ultimately, I would like to see models that are more self-
sustaining and scalable.
    So that is why I have been involved in what is called 
``impact investing;'' that is, looking at the use of for-
profit, as well as nonprofit business models that have a cash 
flow component to them, that help in the scalability and self-
sustainability of the enterprise that addresses social 
problems.
    This is an area that is of real interest, now increasingly 
so, in the capital markets--impact investing, that is--
investing in businesses that produce not only positive social 
benefits or address social problems, but also generate a 
financial return because they can become self-sustaining. They 
can also attract more capital in the capital markets than 
traditional philanthropy.
    So much of the work that is done at the Sorenson Impact 
Center is really focused on how to facilitate impact investing 
and how to educate those in the field and advocate for this new 
tool to help address the many problems that we face in society.
    The Chairman. Thank you. I appreciate the work that you are 
doing. I am very pleased that you support this bill, S. 1089, 
The Social Impact Partnership Act, which Senator Bennet and I 
introduced.
    You have testified that this legislation is needed, in 
part, to address what is referred to as the ``wrong pocket'' 
problem. Can you discuss the current implications for the 
States of this ``wrong pocket'' problem and how the Hatch-
Bennet bill would ameliorate this problem?
    Mr. Sorenson. Yes. I think that the problems that we are 
addressing are fairly complex in terms of the different 
constituencies that bear the cost, particularly in the area of 
Medicaid, health care, for example. There could be an 
intervention that saves more money than it costs, but the 
beneficiary of that is the Federal Government as opposed to the 
State and local governments.
    So, by being able to engage in this legislation, to pay for 
that portion of the benefit that accrues to the Federal 
Government, it helps for the Federal Government to be able to 
underwrite these initiatives, and that in turn helps them to 
really become more prevalent and scalable around the country. 
So it is a very important aspect to enable these to work, to be 
able to have the various constituencies that are benefitting 
involved.
    An example of this is, in the health-care area, a 
preventative intervention for asthma. Now asthma is a condition 
that has preventative interventions that will often prevent a 
much more costly care or acute situation that happens if people 
have to go to the hospital and you have emergency room visits 
and you have physicians involved in very expensive services.
    Well, Medicare covers the hospital part, and that is about 
70 percent of the benefit in terms of cost savings, where State 
and local governments that would be expected to pay for the 
intervention are only getting 30 percent in that equation.
    So clearly this would enable, for this initiative, that 
portion of the savings that accrued to the Federal Government 
to be recovered in the pay-for-success formula.
    The Chairman. Well, thank you so much. Senator Bennet, let 
us turn to you.
    Senator Bennet. Thank you, Mr. Chairman, and thank you very 
much for your partnership on this bill and your leadership on 
this bill. You and your staff have made it much better. I am 
grateful for that.
    I am grateful for the testimony we had today. Particularly, 
I want to thank Ms. Bright for sharing with us the work she is 
doing with Nurse-Family Partnership. The Nurse-Family 
Partnership is headquartered in Denver, CO and is doing 
important work throughout the country. Its use of evidence-
based intervention is a model for all public and private social 
service organizations. So, thank you.
    My interest in this began after I was in business, and then 
I found myself being superintendent of the Denver Public 
Schools and realizing that very few of the incentives or 
disincentives around that system were related to the outcomes 
that we wanted for kids. Now I am in the Federal Government and 
realize it is even worse when the funding source and the 
service provider are not the same entity, because it is even 
harder to figure out how to hold people accountable.
    These are the early days of this kind of work, but I wonder 
if--to me, it seems that this will rise or fall based on our 
ability to actually establish rigorous metrics for outcomes. 
The risk is that we will not establish those rigorous outcomes. 
I do not mean ``we'' the Federal Government; I mean the 
investors and others.
    I wonder--starting with you, Mr. Sorenson--based on your 
experience, if you could talk a little bit about that, how you 
set those rigorous outcomes so we really do get a felicitous 
race to the top as you described it, instead of the reverse. 
Then I might ask Mr. Berlin and Mr. Doar.
    Mr. Sorenson. I think that that is one of the important 
elements to this, and I would just say that I think, because 
there is engagement and collaboration from the social 
scientist, as well as the service providers, as well as the 
governments, as well as investors, that there is a level of 
rigor and a framework for the potential for much greater 
scrutiny in terms of the evidence and the outcomes and the 
validation that ultimately define how these will run and be 
assessed. In the case of the first pay-for-success project in 
this country--on Rikers Island in New York City--it was 
determined that is was not successful.
    The government did not pay. The investors ultimately ended 
up taking the loss, and we learned what did not work in the 
process.
    Senator Bennet. Is there anybody else who would like to get 
in on this?
    Mr. Berlin. I think this is the central question. The 
promise that government will only pay for success depends 
entirely on the metrics that we use, but also on the evaluation 
designs that we use.
    It is easy to get improvements in outcomes, for example, by 
changing who participates or whom you recruit into the program. 
So it is important to think through how to ensure that you are 
actually getting the effects that you promised, above and 
beyond what might have happened otherwise.
    So I think combining the right metrics together with the 
right kind of research design to give you a sense about the net 
value added is really essential. Otherwise, government could 
end up paying for things that did not really make a difference 
at all.
    Mr. Doar. I agree with Gordon. The key thing is to be sure 
that you set up a structure so that you make sure that the 
outcome would not have happened otherwise without the 
intervention. That is an impact evaluation, and it takes a 
certain rigor.
    The other is defining what success is. I think in the 
example that I gave, it was important to the city to have human 
capital development and self-sufficiency as opposed to just an 
income effect. I think that, as we work through this, we have 
to define that early as we go into it.
    Senator Bennet. I only have 1 minute left for a second 
question. Mr. Sorenson, I will start with you again. Could you 
explain to the committee what level of interest there is in the 
private sector around this? Is it developing? Is it growing? 
Who are going to be the investors in this world, do you think?
    Mr. Sorenson. Well, I think that is an interesting question 
for me, because I came to this from the investment world, the 
impact investment world, where I was looking at potential 
investments that had a double bottom-line potential, and I was 
contacted by my wealth manager at Merrill Lynch with the first 
one that I got involved in and saw right off the bat the 
potential for this. It captured my imagination and interest 
because it was data-driven, it was much more accountable, and 
it was really based on outcomes--all of the issues that I faced 
as a philanthropist wanting to find better ways to deploy my 
capital.
    Now having said that, I think there are other investors--
outside of philanthropy--who are also very interested in this 
model. We see within the Sorenson Impact Center about a dozen 
of these that are in the early stages of being set up in the 
western United States, and there are another 50 across the 
country. So we are seeing really, I think, not only an interest 
by investors, but by communities in setting these up and 
structuring them and moving forward in the issue areas that are 
really important.
    Senator Bennet. Thank you. I am out of time. I thank the 
chairman, again, for his partnership.
    The Chairman. Thank you. I appreciate all of the effort you 
are putting forward.
    Senator Wyden?
    Senator Wyden. Thank you, Mr. Chairman. Just one question, 
if I might, for you, Mr. Doar, and you, Mr. Berlin.
    Obviously, right at the heart of an effective strategy is 
to figure out what is going to work best, particularly for 
folks like TANF clients who are unemployed or are looking for 
better jobs. They face barriers to employment. What do you 
believe are the best measures now to be considered in terms of 
trying to help these disadvantaged populations find and hold 
jobs? Why don't we hear from Mr. Berlin and Mr. Doar?
    Mr. Berlin. Thank you. In terms of measures, I think we 
really want to see increases in employment and earnings so that 
people can be self-sufficient and really move forward.
    I feel like we are getting a little too pessimistic. There 
is a really long history of the Welfare-to-Work experiments 
that were undertaken in California and many other places. 
Eventually all of the States did it under the various welfare 
reforms in 1988 and again in 1996, in which we invested in 
mixed strategies that provided job search assistance for those 
who were employable, but also education and training for those 
who needed to develop their skills.
    We saw pretty substantial increases in employment and 
earnings and income, and also some savings in welfare. In 
addition, what we call the Making Work Pay experiments really 
made sure that when low-income people went to work, they were 
truly better off. They also produced pretty dramatic increases 
in employment and earnings, but also benefits for their 
children. They did better in school.
    Senator Wyden. Now, I understand that you all are 
advocating some sort of inventory for information that you 
think is most promising to help these youngsters. What do you 
do with the information and the inventory? Where does it go? 
How does it work?
    Mr. Berlin. So, when we build evidence about programs that 
work, the challenge is really to make sure that that evidence 
gets used at the local level. So one process is to create these 
``what works clearinghouses'' that begin to pull together all 
of the information that we have about what is working. Another 
part of the process which we work hard at at MDRC is working 
with localities to help them actually use that evidence to move 
things forward.
    Senator Wyden. So if I was explaining this at a town hall 
meeting, what I would say is that I can use this inventory to 
find programs that seem particularly promising in terms of 
earnings and employment, and those kinds of opportunities that 
really lend themselves to being replicated elsewhere. Is that 
something resembling English that I could convey?
    Mr. Berlin. That would work. We are building a body of 
evidence that I think, pretty convincingly, demonstrates in 
each of these categories--for welfare recipients, for TANF 
recipients, for disadvantaged youth--that we are beginning to 
see really clear evidence about the kinds of strategies that 
work.
    We are further behind for youth, but there are a number of 
models that have been promising. We just released results not 
too long ago on a program for young people maturing out of 
foster care--youth villages--which showed some positive gain 
for them in terms of their mental health, less likelihood of 
being homeless, and we have several others like that that are 
in the pipeline.
    Senator Wyden. Thank you, Mr. Chairman.
    The Chairman. Senator Warner?
    Senator Warner. Well, thank you, Mr. Chairman. I want to 
thank you and Senator Bennet for your interest in this subject. 
I simply want to make the point that this is an area that I 
have enormous interest in, and I commend all of the panelists.
    A couple of comments, and a couple of questions. One, I 
think it is important that we get the rigor, but I also think 
it is important that we do not spend another decade trying to 
perfect the models. There will be gaming, there will be 
mistakes. But when we are thinking about pay for performance, 
for example in job training, there are pretty easy metrics.
    Did you get a job? Did it pay? Did you stay in that job for 
a period of time?
    The social value that we can add--I sometimes worry that we 
try to set so many different metric posts along the way that we 
study forever, as opposed to trying, trying new programs, 
trying what actually works, and then rewarding it in a 
meaningful way.
    I think Mr. Sorenson has been too generous sometimes with 
his comments about philanthropy. I think at times philanthropy 
has been reluctant to put its money where its mouth is. They 
want to one-off programs, but actually having programs that are 
incented based upon pay for performance or social impact 
bonds--I think we really need to be more aggressive.
    Mr. Chairman, there are a series of things--if we are going 
to get serious in this area--that we could do. For example, the 
DOL recently changed part of their regulations for ERISA-
managed funds around fiduciary duty. For a long time we had a 
fiduciary duty definition that said that if you are a State 
pension fund or a private pension fund that wanted to do the 
right thing, you could not make these social double bottom-line 
investments if they did not show the same EPS on a short-term 
basis that I think a lot of our investment strategies are 
plagued with.
    A lot of the social double bottom-line investments require 
maybe a slightly longer time horizon than a quarter-to-quarter-
based investment change. There was a change by DOL that said 
ERISA-managed funds can now look beyond simply EPS, and they 
can include the workers, and they can include other factors, 
and we ought to accelerate that.
    I think one of things we talked about in the past is many 
of the--I am going to want your comments on this--philanthropic 
funds are restricted in their ability to make project-related 
investments with their own corpus. So you will have some of the 
big philanthropic funds around that are brand names that are 
unable to invest in programs that are social double bottom-
line-based because of, frankly, an arcane, backward-looking 
regulatory environment.
    Now on a bolder basis, if we were to look at portions of 
the capital gains rate based upon longer-term holds in this 
field to get that social double bottom line, it might take a 3- 
or 5-year time horizon, not a 1-year time horizon. We could 
incent, through usages of the tax code, much greater 
experimentation in this field. But we are going to need to be, 
quite honestly, thinking about a capitalism that works for a 
broader group of people. I think your whole sector of investing 
here offers enormous comment.
    I know I have laid out a lot of points there, but I would 
like any of you, but particularly Mr. Sorenson, if you want to 
start with those, and any of the others who want to comment.
    Mr. Sorenson. I think there are a lot of really great 
thoughts that you put forth there. First of all, let me just 
say that the whole area of impact investing--or in the 
foundation world it is often referred to as mission-related 
investing--is really capturing the minds and the imaginations 
of the investment world, and I think creating a tremendous 
opportunity to address problems and benefit society that has a 
much greater potential than I think has ever been thought.
    Senator Warner. There are regulations now that preclude----
    Mr. Sorenson. There are regulations. You talked a little 
bit about program-related investments in the foundation world. 
Program-related investments are investments that foundations 
can make--and they typically are made at the very early stage, 
the high-risk experimental stage--where commercial capital does 
not typically make investment because of the risk factor.
    It is a good place for philanthropic foundation money, but 
because of the ambiguity in the tax code, many foundations do 
not participate with program-related investments because they 
are concerned about whether or not they would qualify by IRS 
definition. If there were a way to remove that ambiguity--and 
we have ideas that would really be helpful in that regard--I 
think it would help to really provide a much more welcoming 
environment for foundations as it relates to program-related 
investments and looking at investing in more scalable self-
sustaining solutions.
    Mr. Doar. I would just say that it is not just government 
that needs to apply evidence-based policymaking to their 
interventions. The not-for-profit world also could benefit from 
being more rigorous in evaluating their impact.
    My friend, Professor Sullivan at Notre Dame, has set up a 
lab. He is partnering with not-for-profits around the country 
to bring that kind of rigor to that world. It is very much 
needed.
    So the extent to which this legislation or this discussion 
sets an example for that world to be as rigorous about impact 
as we need to be is a good thing.
    The Chairman. All right. Senator Scott?
    Senator Scott. Thank you, Mr. Chairman, and thank you to 
the panelists. Senator Warner, I look forward to getting my 
legislation over to your office as soon as possible.
    Literally what you were talking about is my new legislation 
which is investing in opportunity, which allows for a deferral 
of the capital gains tax beyond 1 year in an attempt to give 
investors an opportunity to make good decisions about how to 
invest the resources necessary to grow entrepreneurs in some of 
the distressed communities around the country.
    It would be central from my perspective for us to continue 
to work together to find those opportunities to encourage the 
private sector to do what the private sector would prefer to 
do, which is have that capital reinvested in communities that 
desperately need the resources, as opposed to paying a higher 
and higher capital gains tax.
    But this only defers the capital gains tax. It does not 
eliminate it. So we, the government, would see the resources 
coming back to the government, but it would give a window of 
opportunity for those dollars to be redeployed into the 
communities that have the greatest need. Fifty million 
Americans around the country in all 50 States would benefit 
from the legislation. I will ask Mr. Doar to talk about that in 
a few minutes.
    One of the things I appreciate about this hearing so much 
is that we have so many Americans who are suffering, who are 
working very hard, and find themselves unable to crawl out of 
the pit of poverty. We have scarce resources to be used 
effectively to help these Americans.
    One of the things I find exciting and encouraging about 
this hearing is that we are trying to figure out how to have 
measurable progress in a reasonable time, how to fuse together 
the private sector and the public sector to joint venture in 
these communities and help the very people who have grown up or 
who are growing up in very similar fashion or similar places 
that I did when I was a kid, growing up in poverty.
    So I am encouraged that we are having a conversation that 
needs to be had, that perhaps, looking at some of the programs 
and the overhead expense within the government, we should have 
had a very long time ago.
    I remember serving on a nonprofit board of directors about 
15 years ago in South Carolina. We stopped funding agencies and 
organizations and we started funding specific programs within 
those agencies and organizations that could provide the outcome 
that we were looking for.
    I think that approach is just common sense, and while we 
are having a hearing on it, I certainly hope that most of us 
recognize that this really should have been the model that we 
were using for a very, very long time, because the very people 
who need the help the most are the people who seem to be stuck 
and still suffering because of the lack of outcome focus.
    Mr. Doar, since the focus of today's hearing is on 
delivering social services and support to vulnerable families, 
I wanted to raise the issue of how we actually change the 
economic ecosystem of distressed communities. In addition to 
more effective delivery of social services, I believe that we 
must do more to spark economic conditions necessary to provide 
real economic opportunities in these communities, which is why 
I was talking about the Investing in Opportunity Act.
    I am curious to know how you would characterize the need 
for greater investment and access to capital in struggling 
communities, and whether those issues should be prioritized 
alongside the issues we are discussing today. Do you believe we 
are effectively engaging the private sector towards this goal, 
and what could we do better?
    Mr. Doar. Well, I certainly believe that economic 
development and economic stimulation are very much a part of an 
anti-poverty effort, and people in social services who forget 
that a stimulated economy providing jobs is wind at your back 
in helping low-income Americans are making a mistake.
    So efforts that would bring that kind of greater economic 
activity, through legislation like you are proposing, if they 
are evaluated carefully and monitored carefully, are much 
needed.
    The other thing that is coming out a lot in the recent data 
is the extent to which poverty is often place-based. There are 
distressed communities where there are high concentrations of 
poverty. We do have to turn our attention to those specific 
communities and give them greater attention, as opposed to 
broad-based solutions that attempt to cover the whole country.
    So I think that efforts to stimulate jobs and economics are 
very much a part of an anti-poverty effort. I also think that 
lessons that are in this hearing about the importance of doing 
very rigorous evaluations are important too.
    Senator Scott. I am running out of time. Mr. Chairman, if 
you would allow for one more question? Thank you, sir.
    Mr. Sorenson, my Governor in South Carolina, Governor Nikki 
Haley, announced in February of this year a $30-million 
expansion of the Nurse-Family Partnership program in South 
Carolina, the Nation's first pay-for-success initiative focused 
on improving the lives and health outcomes of mothers and 
children living in poverty. More than half of the expansion 
will be paid for by private donors, included an $8-million gift 
from the Duke Endowment.
    Nurse-Family Partnership has a lot of data and evidence 
that demonstrates their ability to produce successful outcomes 
for women and children living in poverty. Because of this, 
Governor Haley could feel confident about expanding the Nurse-
Family Partnership in South Carolina through a pay-for-success 
initiative.
    Can you talk about the importance of evaluating programs 
based on the outcomes instead of just the money that we are 
putting into those programs, and can you also speak to the 
importance of leveraging private capital to invest in programs 
that could supplement or even replace government social 
programs--with a lower overhead expense from my perspective?
    Mr. Sorenson. Well I think, as we have talked about today, 
there are a lot of social services and funding for social 
services that are not measured or focused on outcomes or 
looking at accountability that focuses on a result that ends up 
potentially saving money. The potential for the type of 
delivery and procurement that we are talking about here, in 
evidence-based procurement for social services, is being able 
to develop models that determine, first of all, those metrics 
that measure successful outcomes and then being able to develop 
a framework and structure that rigorously measures them. That, 
I think, is pretty basic.
    If I am in a business in the business world, that seems 
very intuitive to me. Yes, it is not as common a practice as it 
should be in the procurement of social services.
    I think the other really innovative thing in what we are 
doing here is really engaging the private sector in the 
collaborative involvement between investors who take risks and 
the efficiency that is in the business world in measuring and 
underwriting investments and bringing that to bear in this 
structure. I think that that enables, really, solutions to 
problems that are difficult for State and local governments to 
address because their resources are scarce and they are really 
focused on the downstream costs as opposed to innovative 
interventions, preventative interventions that could ultimately 
save a lot more than what they cost.
    That is really the whole, I think, opportunity for the 
private investors, whether they be foundations or other 
investors, to really engage.
    Senator Scott. Thank you.
    The Chairman. Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman.
    Let me first start off by thanking my fellow New Jersian, 
Tesha Bright, for coming to testify before the committee today. 
It is always a privilege to hear from a constituent, and I read 
your testimony. I was at another event, but I read your 
testimony, and I appreciate what you had to say, especially in 
a program that I have long championed, which is home visiting.
    Nobody knows the needs of the families in Essex and Morris 
Counties, especially the young at-risk families that you work 
with, more than I do. I want to commend you and the work that 
the Nurse-Family Partnership is able to accomplish on behalf of 
the families you serve.
    When we talk about evidence-based successes, this is one, 
Mr. Chairman. It is because of the needs facing these 
communities and communities like them all over the country that 
I have been such a strong supporter of home visiting programs 
like the Maternal, Infant, and Early Childhood Home Visiting 
programs.
    Because these are evidence-based programs, we know exactly 
how successful they have been at helping families by reducing 
infant mortality, improving language development, reducing 
child abuse and neglect, enhancing parental engagement, and 
even decreasing children's exposure to the juvenile justice 
system during adolescence years after the home visits have 
stopped. That is a pretty good track record, Mr. Chairman.
    I want to take the opportunity to thank my colleague from 
Iowa, Senator Grassley. I know he could not be here. Together 
he and I have been able to ensure that the MIECHV program has 
been extended and the funding continues to flow to these 
programs, because they work.
    I want to thank him for his commitment and continuing to 
work with me to ensure that the program's funding, which is 
currently set to expire at the end of fiscal year 2017, is 
again continued and, as my hope is, expanded to ensure that 
more home visits can occur, more mothers have the opportunity 
to learn from nurses like Tesha, and more children are able to 
benefit from the evidence-based practices that have already 
proven so successful.
    So thank you for joining us today. As you know, I think it 
is always great for the members of Congress to hear firsthand 
accounts about how the policies we discuss in this committee 
actually translate to work on the ground, people back at home. 
Sometimes there is a bit of a disconnect there. I always like 
to bring it back to home.
    In your written testimony, you talk about a couple of 
memorable clients with whom you worked, a teenage mother and a 
pair of sisters in a foster home. I am hoping you can describe 
for us how the training for this particular model helped you 
connect with them, and how your interactions might have 
differed compared to non-evidence-based models.
    Ms. Bright. Well, I can only speak to this evidence-based 
model. The training that I received, like I mentioned, the 
motivational interviewing, was painful at times, going through 
this training, learning not to give our opinion, but to 
encourage our clients to make up their own minds, just to 
restate and rephrase, encourage them to solve their own 
problems just by listening, and encourage them to talk.
    The communication, family communication that I mentioned in 
the testimony--we have facilitators that we use in our program, 
and it is at the nurse's discretion when you need to bring them 
out. I think that having done them so many times over the last 
8 years, when I noticed that this incident was going on in the 
family, just sitting everyone down and having them air their 
grievances and discuss everything was very important for the 
foster mother who really could not connect with the two Haitian 
sisters, and then just getting their voice out because they 
felt that they had to do everything on their own and they had 
no one to help them. Because they trusted me, it helped to 
facilitate that between the sisters and the mother.
    In that instance, I think that the training I received with 
the motivational interviewing through the Nurse-Family 
Partnership was really important.
    Senator Menendez. So in these 8 years that you have been 
working at this, would you say there are successes in the 
families that you have dealt with that, but for your 
participation and that of the program, might not have been 
achieved?
    Ms. Bright. I am not going to say I can come in and change 
a family, but I could definitely make them think about 
different things.
    A good example would be nutrition. If I see that the 
majority of the family is overweight and I am discussing 
nutrition and healthy eating with the mom of the toddler, I can 
be creative with it and bring in smoothies, and bring in a 
blender and show them how you can make smoothies and use 
vegetables so that your child is getting fresh vegetables, 
using the WIC checks to buy fresh vegetables from the local 
farmers' market and then using those vegetables, and then just 
encouraging them to try one new thing every month, and bringing 
something new. I think that impacts the whole family. Just 
small change is all we are looking for.
    Senator Menendez. Small changes sometimes bring big 
results, Mr. Chairman.
    Thank you very much. Thank you for coming.
    The Chairman. Senator Scott has one more question he would 
like to ask, and then we are going to recess.
    Senator Scott. Thank you, Senator Hatch.
    Ms. Bright, just a quick question. In South Carolina, the 
Nurse-Family Partnership serves about 1,200 families currently. 
With the new initiative, we will be able to serve another 3,200 
families.
    My question really is on building a new culture because, 
from my perspective, it appears to me that once you have an 
impact on a family, that family has an impact on their 
community. If you have enough folks receiving assistance and 
projecting forward, you will have an opportunity really to have 
a new culture within a community.
    Can you talk to the ability to impact families outside of 
the specific family that is being served?
    Ms. Bright. Yes. I have a great example of that. I have a 
client--well, I had a client. She has graduated now. Working 
with her, I was able to work with the mom, give her different 
job opportunities that came through our e-mail system, visiting 
with her, not just in her home, but meeting her at a baby 
shower and going to her graduation. I was able to meet the 
grandmother and then the aunts.
    I do a lot more than just nursing. I find that--I made a 
deal with her: if you graduate, I will drive for your prom. It 
was just our basic family car, but I was able to drive her to 
her prom, and just being involved with that family--multi-
generational--made a difference. It made a difference.
    It is funny. Many of the times, they do not know my first 
name. They just know me as ``the nurse.'' They refer to 
whatever I say as, ``Well, the nurse said.''
    That makes a difference, because it is not just my client 
saying that, it is her mom or her grandmother referring to 
something that I mentioned. It could be just as simple as 
healthy eating.
    Senator Scott. That is awesome. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Scott.
    We are very grateful for your testimony here today. This is 
serious stuff. We intend to pass this bill. The House is 
working on their version as well. Hopefully before the end of 
this year, we can work out a bill that you all will be very 
satisfied with. If we do, it will be in large measure because 
of you taking the time to come and see us today.
    With that, let me just say that I would ask that any 
questions for the record be submitted by Tuesday, May 24th.
    With that, then, I think we will just adjourn this hearing. 
I think I am going to see you a little later, Mr. Sorenson.
    Thank you all for being here. I really appreciate you.
    [Whereupon, at 3:30 p.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


        Prepared Statement of Gordon L. Berlin, President, MDRC
   using evidence as the driver of policy change: the next steps in 
   supporting innovation, continuous improvement, and accountability
    Good morning, Chairman Hatch, Ranking Member Wyden, and members of 
the committee. I appreciate the opportunity to participate in this 
hearing on the role of evidence-building in the future design and 
evolution of the Nation's education and social welfare policies and 
programs.

    My name is Gordon Berlin, and I am president of MDRC, a nonprofit, 
nonpartisan education and social policy research organization that is 
dedicated to learning what works to improve policies and programs that 
affect the poor. Founded in 1974, MDRC evaluates existing programs and 
develops new solutions to some of the Nation's most pressing social 
problems, using rigorous random assignment research designs or near 
equivalents to assess their impact.

    The Federal Government spends billions of dollars on policies and 
programs designed to improve the human condition; ameliorate poverty; 
increase employment, earnings, and income; invest in education to build 
human capital; and ensure America's competitive position in a 
technologically advancing world. But to make a real difference, to 
ensure a return on investment for both taxpayers and the beneficiaries 
of these programs, we have to do things that actually work.

    Over the last decade and a half, during a period defined in the 
public consciousness by political partisanship, the legislative and 
executive branches have quietly forged a bipartisan consensus around 
the need to build evidence of effectiveness that would ensure high 
rates of return on investment for the Nation's social programs. The 
establishment by Congress of the new Evidence-Based Policymaking 
Commission is only the most recent example of this consensus.

    In my testimony today, I offer a brief history of the Federal 
Government's fruitful investment in evidence-building; then concentrate 
on several of the most recent efforts, including supporting pay-for-
success initiatives; and conclude by identifying obstacles to effective 
evidence-building, offering potential solutions and suggesting a 
framework for exploiting the opportunities that lie ahead.
A Brief History of Evidence-Building
    The history of evidence-building has evolved through four phases: 
in the 1980s and 1990s, Federal waivers made the States the engine of 
innovation; in the early 2000s, the Office of Management and Budget 
drove the Federal agencies to focus on developing rigorous evidence, 
and the Congress created the Institute of Education Sciences; in the 
late 2000s, the Federal Government built partnerships with the 
nonprofit and philanthropic communities and defined tiered standards of 
evidence; and today Congress has taken the lead, building on the 
earlier phases to create new evidence-building frameworks and pay-for-
success initiatives that seek to support innovation and stronger 
results.

    Putting States in the Lead: The Waiver Era. The earliest roots of 
the evidence evolution can be traced to the 1980s and 1990s when the 
Nation turned to the States as laboratories of innovation. Using the 
Social Security Act's 1115 waiver authority, the Federal Government 
allowed States to experiment with new approaches to welfare policy. In 
return, States were expected to subject their programs to rigorous 
evaluation, nearly always using random assignment, to demonstrate that 
the reforms had the intended effects and were cost neutral. The Federal 
Administration for Children and Families and its Office of Planning, 
Research and Evaluation (OPRE) played a key role in managing the waiver 
process and organizing that research--as well as in setting the agenda 
in subsequent years for advancing our understanding of the 
contributions job search, training, and community work experience could 
make. The remarkable body of evidence built during this period provided 
the backbone for passage of the 1988 Family Support Act and the 1996 
welfare reform law. No one understands the results of that work better 
than the members of this committee: together with a strong economy, the 
resulting welfare-to-work programs and related supports embodied in 
Federal law led to an unprecedented increase in employment rates among 
welfare recipients and a sharp decline in the Nation's welfare rolls. I 
turn later in this testimony to some of the challenges associated with 
the waiver authority in health and welfare policy broadly and the 
current state of the Temporary Assistance for Needy Families program 
specifically.

    Creating Capacity: The Era of Investment in Federal Research 
Centers. With OPRE's rich body of research evidence on welfare as one 
example, the Office of Management and Budget in the Bush administration 
began encouraging all Federal agencies to use randomized controlled 
trials to evaluate the effectiveness of the programs they funded. In 
2002, Congress passed the Education Sciences Reform Act, which created 
the Institute of Education Sciences (IES), the independent statistics, 
research, and evaluation arm of the U.S. Department of Education. IES 
has been universally recognized for raising the standards of evidence 
in education research. In 2008, recognizing that States had little 
incentive to allocate dollars to programs with the strongest evidence, 
President Bush and Congress appropriated $10 million to support States 
that committed to scale up evidence-based home visiting programs. This 
bipartisan action laid the groundwork for the next era in 
evidence-based policy.

    Partnering With the Nonprofit Sector: The Era of Tiered Evidence. 
During the third phase in the late 2000s, Congress capitalized on 
innovation and creativity in the nonprofit sector in legislation that 
created the Investing in Innovation Fund ($650 million) at the U.S. 
Department of Education, the Workforce Innovation Fund ($125 million) 
at the U.S. Department of Labor, the Teen Pregnancy Prevention Program 
($110 million) at the U.S. Department of Health and Human Services 
(DHHS), and the Social Innovation Fund ($50 million) at the Corporation 
for National and Community Service. Each of these funding streams 
employed ``tiered'' evidence structures that allotted the largest 
dollar amounts to the programs with the strongest evidence, each 
encouraged new program development, each emphasized taking what works 
to scale, and, importantly, each required that additional evidence be 
generated as programs expanded. Programs funded by these streams 
include such effective interventions as the Success for All school 
model, the Reading Partners volunteer tutoring program, the Youth 
Villages YVLifeSetprogram for young people transitioning out of foster 
care, and the transitional employment program for reentering prisoners 
run by the Center for Employment Opportunities.

    Perhaps the largest evidence-based program of the era is the 
Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program, 
which provided $1.5 billion in funding for home visiting programs over 
5 years. In many respects, MIECHV, which was largely crafted by this 
committee, was a model of building and using evidence to shape policy. 
The authorizing legislation reflected the considerable amount of 
research that had already been conducted on home visiting in two ways. 
First, it required DHHS to establish transparent criteria to determine 
which models of home visiting had prior evidence of effectiveness. It 
then required States to spend the majority of their MIECHV funds on 
those models.

    Recognizing that prior studies had also shown gaps in where home 
visiting was effective, the legislation also encouraged States to 
innovate by allowing part of the funds to be used for promising 
approaches to home visiting. For example, home visiting programs have 
historically not had large effects on maternal mental health, so states 
could use these funds to pay for new services to try to ameliorate 
maternal depression. At the same time, the authorizing legislation 
recognized a need for continued learning about the effects of home 
visiting. To that end, it specified that 3 percent of the budget should 
be spent on technical assistance and research activities. Finally, the 
legislation also required a national evaluation of the MIECHV program, 
noting that random assignment designs were to be used ``to the maximum 
extent feasible.''

    In sum, there are several elements of MIECHV worth emphasizing:

          Prior evidence was used to influence how Federal funds could 
        be spent, making it more likely that the funds would make a 
        difference for families.
          The legislation recognized that there were areas where home 
        visiting was not as effective as desired and offered States 
        funds to test innovative approaches.
          Funds were set aside for research to make sure that learning 
        continued under MIECHV and could influence future realizations 
        of home visiting.

    Together these initiatives laid the groundwork for the modern era 
of evidence-building that Congress has now embarked upon.

    Today: Using Evidence as a Driver of Change. Building on past 
efforts, this Congress is actively using evidence as an instrument of 
change--setting aside a small fraction of funding for evidence-
building, charging the executive branch with using tiered strategies 
that privilege those programs and models with the best evidence with 
the highest levels of funding, and requiring that States look to 
evidence-based models as they expand federally funded programs. In 
addition, recognizing that context matters, these set-asides include 
funding for innovation in the private and nonprofit sectors and also in 
States and localities.

    Indeed, social impact bond financing--a strategy that brings 
together private-
sector capital, nonprofit know-how, and government urgency in a 
partnership designed to take promising new approaches to scale--is an 
important part of the Workforce Innovation and Opportunity Act of 2014 
(WIOA) and the Every Student Succeeds Act of 2015 (ESSA).

    WIOA places new emphasis on evidence-based decision-making by 
asking States and the U.S. Department of Labor (DOL) to identify, 
evaluate, and share promising and proven practices. In addition, DOL is 
charged with establishing a robust program of research to fill crucial 
knowledge gaps, including learning what works to help disconnected 
youth return to school and enroll in postsecondary training and 
conducting regular and rigorous evaluation of programs for dislocated 
workers and of the Job Corps. States are required to evaluate their 
programs annually using rigorous methods, and the law sets aside 
dollars for Governors to encourage experimentation at the State and 
local level. Surprisingly, the law doesn't employ the tiered evidence 
strategies pioneered in other bills. The law also created new authority 
for local workforce investment boards to use up to 10 percent of funds 
across all three formula grant programs--Adult, Youth, and Dislocated 
Workers--to support pay-for-performance or social impact bond projects. 
As we begin to learn more about what works, emphasis should turn to 
ensuring that this evidence is used in the design and delivery of local 
workforce programs:

          A tiered evidence strategy could be employed to signal the 
        value of developing new approaches, testing promising programs 
        at some scale, and expanding programs with the strongest 
        evidence.
          State and local workforce agencies should work with the 
        Department of Labor to build the data systems necessary to 
        support both better performance management and evidence-
        building.
          As a complement to the mandatory sanctions that current law 
        imposes when States fail to meet performance goals, create 
        funding streams that reward performance improvement and the use 
        of evidence-based programming.
          To encourage innovation and evidence-building, Governors 
        should use a portion of WIOA discretionary dollars to co-fund 
        with DOL a series of workforce innovation laboratories to 
        experiment with new approaches.

    The Every Student Succeeds Act (ESSA) allows States to use some of 
their title I, part D, and title IV, part A, funds to support pay-for-
performance initiatives as long as they also conduct a rigorous third-
party evaluation to determine if the project actually worked. ESSA also 
provides a clear definition of evidence modeled after the Investing in 
Innovation (i3) tiers of evidence. It requires low-performing schools 
to use evidence-based interventions and sets aside 7 percent of title I 
funds so that States can pay for them. ESSA also clearly values the 
development and evaluation of innovations in education by codifying a 
tiered approach in the Education Innovation Research Grants Program, 
which replaces the i3 program, and by allowing the Institute of 
Education Sciences to pool money set aside for evaluations of 
individual programs. But several key features in the new law could also 
be improved:

          School districts should be offered incentives to choose the 
        interventions that have the strongest evidence.
          The law's definition of evidence includes correlational 
        studies, which are weaker than experiments, and could end up 
        supporting unsubstantiated interventions.
          Substantial discretion is left to the States in gauging 
        evidence quality but without a strong framework or support; 
        therefore, application of evidence is likely to be uneven and 
        too easily overridden by political and other considerations.
          A clearer connection should be established between the 
        evidence built by IES and summarized in its What Works 
        Clearinghouse and what constitutes reliable evidence at the 
        State level, where officials are charged with deciding what 
        ``evidence-based'' will mean.

    In addition, the separate Social Impact Partnership Act (S. 1089) 
would authorize $300 million to support States and localities in the 
use of social impact bonds (SIBs) to tackle social and public health 
challenges--of which $10 million is allocated for feasibility studies, 
$45 million for evaluations, and the remaining funds to support deals 
and pay for administrative costs. The purpose is to spur State and 
local experimentation, build better evidence about what works, and 
foster the bundling of philanthropic, private investment, and public 
funds to scale effective social programs operated by nonprofit 
organizations and local governments. To promote wider use of this new 
vehicle, Federal funds can be used to support project costs--
essentially allowing the Treasury Department to be a financing party in 
SIB deals, providing dollars to State and local entities so that they 
may in turn pay back investors if an initiative is found to be 
effective by a rigorous third-party evaluation. While the bill 
admirably specifies a comprehensive list of acceptable project 
outcomes, that list does not include pre-k or college outcomes, two 
promising areas for pay-for-
success investing.
Lessons From Experience on Social Impact Bonds
    Social impact bonds--or pay-for-success initiatives--are attractive 
across the political spectrum as they bring together the concepts of 
lending for a social purpose, return on investment, and payment based 
on performance. In the simplest terms, a SIB uses private funds to pay 
for a social, educational, or health program, and the government repays 
investors (plus a return) only if the program achieves prespecified 
results. A SIB can be a valuable new tool in the evidence-building 
movement. A financing mechanism for testing and scaling innovative new 
approaches to complex social problems, it provides important 
flexibility to State and local authorities, who might not otherwise 
have the resources to experiment with new approaches. This is a 
valuable complement to the broader agency-based Federal role that 
should be retained as the centerpiece of future evidence-based 
policymaking.

    At MDRC, we have first-hand experience with social impact bonds, 
having served as the intermediary at the center of the first SIB 
initiative in the United States, which financed the Adolescent 
Behavioral Learning Experience (ABLE) program at Rikers Island in New 
York City. It was designed to learn whether a cognitive behavioral 
therapy program delivered to all 16- to 18-year-old adolescents 
awaiting trial at Rikers Island jail would equip them with the social 
and decision-making skills to help take responsibility for their 
actions, avoid rash and impulsive reactions, make more constructive 
life choices, and ultimately avoid a costly return to Rikers.

    The Rikers SIB sought to answer two distinct questions, each of 
which should be judged independently. The first was: did the program 
reduce recidivism? The short answer is no; ABLE was discontinued after 
3 years when results from an independent evaluation by the Vera 
Institute of Justice demonstrated that it was not meeting its goal of 
reducing recidivism among 16- to 18-year-olds. The second question was: 
Is a social impact bond a viable mechanism for financing, testing, and 
scaling a social program innovation? Here the answer is clearly yes. 
Government got to try something it would not otherwise have attempted, 
while investors assumed all of the risk.

    But, as Rikers proved, SIB funding does not guarantee programmatic 
success. A SIB-supported program that turns out not to work can result 
in losses for investors, no cost savings for the government, no 
opportunity for long-term growth for nonprofit service deliverers, and 
limited benefits for participants. Yet while the intervention may not 
have worked, the SIB structure did succeed: the government did not pay 
for ineffective services, but learning what didn't work may have helped 
point the way to what might.

    As early adopters like us gain real-world operating experience, the 
reality of SIBs is turning out to be more nuanced than either 
proponents or detractors have promised. As I argue in Learning From 
Experience: A Guide to Social Impact Investing, emerging lessons from 
Rikers and other deals reveal both SIBs' value to government entities 
and also the reality that this value will only be realized if the 
tensions inherent in structuring the terms of a SIB deal can be 
addressed squarely. These include:

          The balance of risk and reward. The returns governments are 
        able to pay may not be proportional to the risks some lenders 
        are able to take.
          The focus on narrowly defined government savings. Many deals 
        still depend on the possibility of government savings. But 
        insisting on government savings can unnecessarily rule out 
        projects that might otherwise offer valuable and readily 
        quantifiable returns to participants and society at large.
          The role of evidence. SIBs reduce risk for government 
        entities by promising that they will have to pay only for 
        successful interventions. To fulfill that promise, a SIB must 
        include independent, rigorous evaluation of a program's 
        effectiveness over the status quo--a requirement that poses a 
        new form of investor risk. Unfortunately, efforts to mitigate 
        that risk have driven some SIB deals to rely instead on simple 
        outcome measures, which may misleadingly provide only the 
        illusion of benefits and savings to government entities.

    What does that mean for Congress moving forward on pay-for-success? 
The SIB vehicle is a valuable tool for stimulating experimentation, 
innovation, and the scaling of promising approaches at the State and 
local level. But it is not a substitute for a comprehensive agency-
directed research agenda, which is essential if evidence is to be 
harnessed effectively to improve performance. The Federal Government 
can enhance the value of SIBs as a ``learning what works'' tool by:

          Stating clearly that the goal is to build evidence about 
        what works.
          Signaling its support for a benefit-cost perspective that 
        places equal weight on quantifiable government budget savings, 
        benefits for participants, and benefits for society as a whole.
          Supporting the evaluation costs of SIB projects only when 
        they use rigorous research designs capable of reliably 
        attributing causality, requiring those studies to collect a 
        range of relevant outcome measures (not just the single measure 
        that payback would be based upon), and insisting that those 
        measures be quantifiable measures of success.
          Stimulating deals by supporting State and local pay-for-
        success projects in the form of backend payments as specified 
        in the Social Impact Partnership Act, WIOA, and the Social 
        Innovation Fund Classic competitions, but giving broad latitude 
        to dealmakers (public agencies, investors, and nonprofit 
        service providers) by not being overly prescriptive about the 
        requirements governing a SIB deal--in essence, allowing the 
        private market aspects of SIBs to work, while still insisting 
        on rigorous evidence and payment terms that are fair to both 
        taxpayers and investors.
          Sustaining what works by requiring, to the extent possible, 
        that State and local agencies continue supporting effective 
        programs after a SIB deal ends.
          Insuring transparency by requiring that public agencies 
        using Federal funds must release publicly the final results of 
        evaluations, the payment terms of deals, and final benefit/cost 
        calculations, including the lost savings that would result if 
        the government did not continue to support effective 
        initiatives.
Looking Forward: The Future of Evidence-Building
    The Federal investment in evidence over the past two decades has 
yielded great benefits in our understanding of what works in education, 
workforce development, health and human services, and housing policy. 
As this evidence base continues to grow, however, we must address a 
number of challenges to make the most of what we are learning by: (1) 
creating a culture of continuous improvement with incentives for using 
research evidence to make programs even more effective; (2) balancing 
the role of agency-directed research with pay-for-success innovation in 
the States and localities; (3) making better use of Federal waiver 
authority; (4) improving access to data for more efficient evaluations, 
while protecting confidentiality; and (5) clarifying Federal authority 
to conduct research.

    Continuous Improvement Instead of Up-or-Down Judgments. 
Historically, we have failed to build a reliable record of what has 
worked and what has not, dooming ourselves to constantly repeating past 
mistakes and relearning the same lessons over and over again. With its 
actions in the last decade or so, Congress has taken decisive steps to 
build that record and to drive policy and funding with evidence.

    But to be successful, consensus will also be needed around means 
and ends. Is the goal simply to fund what works and end what does not? 
Or is it to invest in continuously improving the Nation's social 
programs? Those who are skeptical of the efficacy of social programs 
question whether we will really act on evidence when programs do not 
work. On the other side, supporters of social programs worry that 
evidence will be used as a blunt instrument to justify diminishing the 
Nation's investment in ameliorating social problems. Both sides have a 
point.

    To take just one example: in the early 1990s, the national 
evaluation of the Job Training Partnership Act's youth employment 
programs found few effects for youth, and Congress moved decisively to 
defund all of the Act's youth training and employment programs. The 
discontinuation of Federal summer youth employment funding closed down 
one of the Nation's largest employers of young people; funding for 
training programs was also terminated, and even the Job Corps 
experienced reductions. But no research and development investments 
were made in their stead to learn what might work better. Twenty years 
later, the Nation is in the midst of the worst youth unemployment 
crisis in recent history. Fortunately, Congress has built a learning 
agenda about youth employment in the recently passed WIOA, but many 
years and lives were wasted in the interim.

    Eventually, we do have to say no when efforts to enhance a given 
approach repeatedly fail to produce evidence of effectiveness. But that 
doesn't mean doing nothing when the problems remain pressing. In short, 
the evidence-building agenda should be framed around long-term goals, 
and the tactics should focus on the means to that end. Like a business 
committed to becoming a dynamic learning organization, government 
should commit to continuous improvement and focus on making its 
programs more effective over time. The Edna McConnell Clark Foundation, 
one of the first (and largest) Social Innovation Fund intermediaries, 
offers an excellent example of building evidence and using it to 
continuously improve the programmatic and organizational capacity of 
its youth-serving grantees.

    Bolstering Agency Research Capacity and Supporting Pay-for-Success 
Innovation. In recent legislation, support for evidence-building, 
especially as it relates to innovation and scaling, has taken two 
forms: (1) traditional research and demonstration funding that charges 
the research arms of Federal agencies with building bodies of evidence 
about what works; and (2) social impact bonds or pay-for-success 
structures that attract private funding for innovation.

    While both vehicles will build evidence, they approach the task 
differently, with each having advantages and disadvantages. Simply put, 
the agency research model is preferable when the goal is to learn what 
works for a broad and persistent problem like the transition from 
foster care, where one wants to develop a reliable body of evidence, 
one study building on the last. Agencies should be charged with 
creating a portfolio of research about a problem's underlying causes 
and to test a range of possible solutions, always answering three 
questions: what difference did the program make, how did it do so, and 
why? To support that work, Congress could authorize Federal agencies to 
set aside at least 1 percent of existing program funds for evaluation, 
a solution that is budget-neutral. And because context matters, 
agencies should also be encouraged to pay attention to the systems in 
which programs operate--something Federal agencies too seldom do. It is 
not enough to learn what works; introducing what works into broader 
systems and maintaining quality at scale is the next frontier in 
evidence-based policymaking.

    The SIB model is best used when the goal is to encourage local 
experimentation and innovation and as a means of ensuring local buy-in. 
Its principal disadvantages are the narrow focus on a single outcome 
measure to determine success and the difficulty of packaging a deal 
that adequately balances risk against reward and that satisfies both 
investors and government payers.

    The Role of Waivers. Unlike the story of the welfare waivers in the 
1980s and 1990s, the use of waiver authority in health and health care 
offers a cautionary tale. As documented by the Government 
Accountability Office in 1995, 2002, and 2008, States have used 1115 
waiver authority to experiment with new service delivery models, 
eligibility rules, and other strategies with the goal of improving 
outcomes and patient experiences and lowering costs in the Nation's 
Medicaid program. While the waiver process unleashed an exceptional 
amount of State experimentation, little evidence was generated because 
there was no requirement that rigorous evaluations be conducted of the 
innovations. The Center for Medicare and Medicaid Innovation created as 
part of the Affordable Care Act is now hard at work attempting to more 
rigorously build that evidence base.

    Ironically, we now face the very same problem in welfare policy. 
The waiver structure that spurred experimentation and nourished 
evidence-building no longer exists, even though we face a next 
generation of problems--incomes have stagnated, child poverty rates 
remain alarmingly high, and the fraction of families with neither 
earnings nor government-provided benefits has increased. We need to 
refine our understanding about how to promote job advancement and 
retention; how to understand the role of public employment during 
severe economic downturns and in urban, rural, and tribal areas where 
unemployment is perennially high; how to serve those with severe, 
persistent, and multiple employment barriers; and how best to engage 
with noncustodial fathers who owe child support and are unemployed. 
Initially, the block grant structure of TANF and the surpluses States 
enjoyed as a welcome by-product of the remarkable economic expansion of 
the late 1990s fueled a new round of State-led innovation. But the 
economic slowdown and States' reluctance to commit State funding to new 
endeavors have limited the amount of experimentation in a number of 
critical areas. An annual set-aside of program dollars that States 
could apply for on a matching basis to pay for pilot tests of new 
ideas--tests that include requirements for rigorous, independent 
evaluations--is needed.

    Improving Access to Federal Data for More Efficient Evaluations. In 
evaluating the effectiveness of social programs, researchers need ready 
access to administrative data. Research firms that are funded by 
Federal agencies to evaluate programs often rely on data collected by 
States from employers on employment and earnings, for example, data 
that the States already report to the Federal Government for certain 
child support enforcement and other purposes. These data are housed in 
accessible form at the Federal level within the National Directory of 
New Hires (NDNH) database. However, research contractors face severe 
restrictions in accessing this essential database for assessing whether 
federally supported programs actually work. Instead, they are forced to 
get the very same data directly from the States, at great cost to the 
Federal Government and at considerable burden in duplicative reporting 
for the States. If the NDNH database were made more widely available to 
evaluators (with appropriate privacy safeguards), it would enable 
Congress and the Federal agencies to assess the impact that social 
programs have on jobs and earnings at much less cost and burden to the 
Federal Government and the States.

    Similar opportunities exist for building robust data systems from 
the wealth of data about individuals' experiences with the health care, 
public assistance, criminal justice, child welfare, school, and college 
systems. Integrated data systems would save time and money and reduce 
paperwork burdens in the conduct of evaluations, while providing 
comprehensive information about program effectiveness over time. The 
American Opportunity Study being overseen by a committee of the 
National Academies of Sciences, Engineering, and Medicine and housed at 
the U.S. Census Bureau in a secure data environment would take an 
important step in that direction. Private industry is far ahead of the 
public sector--exploiting big data to understand customer desires, 
track trends, and assess performance, so that low-
performing business units can learn from high-performing ones. The 
public sector has the data to build comparable integrated systems to 
track progress longitudinally and to enhance program performance, yet 
Federal and States agencies (and their contractors) cannot regularly 
access and share data for evaluation purposes. We can do better. 
Agencies and their contractors need clear authority to access and link 
administrative data for evaluation purposes when it is housed at the 
Federal level and similarly clear authority when it is housed at the 
State level. Government efficiency hangs in the balance.

    Protecting Confidentiality. At all levels and branches of 
government, there is a tug of war between those who are focused on 
improving program effectiveness and those who are concerned with 
protecting privacy. Staff responsible for managing data are rightly 
charged with keeping it secure and protecting privacy but too seldom 
with developing protocols for sharing it securely with other agencies 
and evaluators. Although the stakes are high and the opportunity 
significant, the program office that houses the data often have little 
or no interaction with the same agency's evaluation office. If these 
two objectives--measuring program effectiveness and safeguarding 
privacy--remain mutually exclusive, continued paralysis is the 
inevitable result.

    The Family Education Rights and Privacy Act (FERPA) illustrates the 
challenge. Congress is considering amending FERPA because of concerns 
over threats to the privacy of student data, and meanwhile State 
legislatures have stepped in. Just last year 47 State legislatures 
introduced over 180 bills to address student data protection issues, a 
reaction originally prompted by public outcry over educational 
technology vendors and their use of children's information for 
advertising and commercial gain. Unfortunately, education researchers 
from academia and other nonprofit institutions have gotten swept up in 
the furor. Under current Federal law, education agencies can share data 
with researchers only for research projects to benefit students and 
improve instruction--and only under extremely strict privacy 
conditions. But some are suggesting that Congress should significantly 
scale back even that authority. Without access to student data, little 
education research could be conducted at all. The bottom line is that 
it's essential to continue to protect the security and privacy of 
student data, but we must be careful to not unintentionally end the 
analysis of student data for its original purpose: assessing and 
improving education.

    To strike the right balance between protecting privacy and 
confidentiality while still allowing access for research, Congress 
could start by specifying required levels of encryption and protection 
using the highest standards established by the National Institute of 
Standards and Technology (NIST). The NIST standards are appropriate for 
research data that must be kept confidential to protect the privacy and 
well-being of study participants.

    Clarifying Federal Authority to Conduct Research. Inconsistencies 
in Federal authority to conduct independent research and evaluation as 
well as procurement and contracting rules pose additional hurdles for 
efficient evidence-building. To guide policy, research must be 
independent, objective, and reliable. However, the authorizing 
legislation establishing agency research departments does not always 
set forth these requirements--for example, the law governing the 
Institute of Education Sciences does while the one over the Office of 
Planning, Research and Evaluation at DHHS does not. When authority is 
clear, agencies and their contractors have less difficulty accessing 
data, recruiting sites, establishing data-sharing agreements, and 
getting local buy-in. For example, in our experience studying home 
visiting programs, we found States and localities willing and ready 
partners in a random assignment research design when legislation 
instructed the Federal agency to make program funding contingent upon 
participation in the evaluation. In a complementary home visiting study 
that was not explicitly described by Congress, however, site 
recruitment proved difficult.

    Procurement and process obstacles to cost-effective evaluations 
should also be addressed. While its goals are laudable, the Paperwork 
Reduction Act's requirements for clearance by the Office of Management 
and Budget and for filing two public notices for every survey involving 
more than 10 people add time and money to fielding studies. Rules 
designed to improve government procurement of goods and services can 
create havoc in evaluation research--for instance, an 18-month follow-
up survey may span fiscal years and the pace at which the survey will 
be fielded is difficult to predict, but the funding of that survey 
can't cross fiscal years. Research, demonstration, and evaluation 
projects are not readily severable. Given the need for long follow-up 
periods, studies may spread over 5 or more years. Under current 
procurement rules, contract requirements and dollar amounts for each 
year must be specified separately. This has dramatically increased 
costs to administer and manage research.
Conclusion
    The bipartisan commitment to building evidence by Congress has 
created a new generation of innovation in education and social policy--
better programs, more effective policies, more responsible use of 
taxpayer dollars. But there is more to be done. It is not enough to 
identify isolated examples of what works. We need to build a culture of 
continuous improvement and accountability, always striving to learn 
more and to more effectively direct funding at all levels of government 
to those programs with the strongest evidence.

    Thank you for the opportunity to testify today.

                                 ______
                                 
        Prepared Statement of Tesha Bright, Nurse Home Visitor, 
         Nurse-Family Partnership of Essex and Morris Counties
    Good morning, Chairman Hatch, Ranking Member Wyden, and members of 
the committee. Thank you for the opportunity to testify on behalf of 
the Nurse-Family Partnership (NFP) program serving Essex and Morris 
Counties New Jersey in support of the life-changing potential of 
evidence-based programs like NFP. Additionally, on behalf of the 
mothers, children, and families served by Nurse-Family Partnership, I 
want to thank Chairman Hatch and this committee for their commitment to 
improving the health and well-being of at-risk families with dedicated 
funding for evidence-based home visiting programs. Your work is paving 
the way for a healthier, brighter future for at-risk children and 
families.

    I am Tesha Bright, and I have worked as an NFP Nurse Home Visitor 
for nearly 8 years. As a nurse home visitor, I serve a regular caseload 
of 25 first-time, low income mothers and their families. In those 8 
years, I have experienced several meaningful examples of how this 
innovative program can empower young mothers to succeed.

    Every year, approximately 800,000 first time, low-income mothers 
become pregnant with their first child. Nationwide, the NFP model has 
served over 239,000 families since replication began in 1996, and 
currently has over 31,000 first-time families enrolled in 43 States, 6 
tribes, and 1 territory (USVI). We believe that the national 
replication of our program is dramatically improving lives of 
vulnerable families and yielding significant returns to society by more 
stable and productive families. For every 100,000 families served by 
NFP, research demonstrates that 14,000 fewer children will be 
hospitalized for injuries in their first 2 years of life; 300 fewer 
infants will die in their first year of life; 11,000 fewer children 
will develop language delays by age 2; 23,000 fewer children will 
suffer child abuse and neglect in their first 15 years of life; and 
22,000 fewer children will be arrested and enter the criminal justice 
system through their first 15 years of life, among other outcomes.

    In New Jersey, NFP is part of the State's Home Visiting Initiative 
led by a joint effort of the Department of Health (DOH) and the 
Department of Children and Families (DCF). The first program was 
established in Trenton, NJ in 2002 and today, 9 agencies have a 
capacity to serve approximately 1,500 families in all 21 counties 
across the State. My implementing agency, the Institute of Infant and 
Preschool Mental Health, serves Essex and Morris Counties, which 
includes the city of Newark. We currently serve about 187 moms, and 
were recently able to expand to serve an additional 50 moms with the 
help of Federal Maternal, Infant, and Early Childhood Home Visiting 
(MIECHV) funding. A multitude of unfortunate factors in the community 
make Nurse-Family Partnership a critical element of the county's 
continuum of services for prevention and families in need. Still, we 
only reach about 3% of the population who could benefit from our 
services.

    NFP is a voluntary program that provides regular home visits to 
first-time, low-income mothers by registered nurses beginning early in 
pregnancy and continuing through the child's second year of life. The 
program is free and voluntary to the women that enroll. The children 
and families NFP serves are young, living in poverty, and at the 
highest risk of experiencing significant health, educational and 
employment disparities that have a lasting impact on their lives, their 
families, and communities. Nationally, 28 percent of families served by 
Nurse-Family Partnership are Hispanic; 29 percent are African-American; 
24 percent are Caucasian; 5 percent are Native American or Alaskan 
Native; and 2 percent are Asian/Pacific Islander (the remainder 
declined to identify).

    NFP nurses and their clients make a 2\1/2\ year commitment to one 
another, and develop a strong relationship over the course of 64 
planned visits that focus on the strengths of the young mother and on 
her personal health, quality of care giving, and life course 
development. Their partnership with families is designed to help them 
achieve three major goals: (1) improve pregnancy outcomes; (2) improve 
child health and development; and (3) improve parents' economic self-
sufficiency. By achieving these program objectives, many of the major 
risks for poor health and social outcomes can be significantly reduced.

    In addition to our clinical training as registered nurses, NFP 
nurses are trained in a variety of developmental concepts and 
assessments. NFP nurses use Partners in Parenting Education (PIPE) 
lessons to teach clients a variety of concepts such as attachment, 
bonding, early language, and the importance of reading and literacy. We 
also perform continual assessments of the child's growth and 
development and use tools such as the Ages and Stages Questionnaire 
(ASQ) at prescribed times help influence visit content and activities. 
By addressing deficits discovered through regular contact and use of 
the evaluative tools, nurses are able to instruct clients in a variety 
of ways such as floor play, demos with a doll, videos, handouts, and 
then finally, if necessary, a referral to early intervention. Lastly, 
using the NFP Strengths and Risks (STAR) framework we regularly access 
a variety of client risk factors and changes in areas such as personal 
health, home safety, unsafe family/friend network, and economic 
adversity. It helps us serve clients better, maintaining engagement 
with NFP and the visit schedule.

    Over the past 8 years as a Nurse Home Visitor, I have worked with 
hundreds of young parents, many involved with the New Jersey Department 
of Child Protection and Permanency, formerly the division of Youth and 
Family Services (DYFS). I have worked as part of the treatment team 
providing a variety services for this population, but most importantly, 
my role is to provide consistency and structure as we plan and prepare 
for their first child. Working with this population is especially 
trying given the extensive mental health backgrounds, lack of trust, 
transient lifestyles, and histories of sexual and drug abuse. 
Throughout each client's involvement in NFP, she will experience many 
moments of success, but also many challenges. I am a constant partner 
through both of these periods.

    I think of one of my 15-year old clients who, at the time, was 
living in a homeless shelter and was initially denied my services by 
shelter staff. They believed that this client would not be parenting 
her infant, and that the baby would be placed in a foster home upon 
discharge from the hospital until family could be located. Through 
persistence and a more flexible visitation schedule, I was able to not 
only begin seeing the client, but I was also able to deliver content in 
creative ways and encourage excitement about motherhood.

    I received a 3 a.m. call when she went into labor. Upon reaching 
the hospital, I discovered she was being treated without compassion. 
This experience had the potential to be quite traumatic for this teen 
but by advocating for her and pulling staff aside, I ensured she was 
treated fairly. In the end, we delivered a healthy baby girl, and 
capturing those first photos of mom and baby were priceless. 
Breastfeeding was initiated at that time. Sadly, further arrangements 
were not made and mom went home without her baby, but I worked with the 
client to visit her infant. Over that time, this client continued to 
pump and provide breastmilk for the baby and our work encouraged a 
continued bond until both were united at a shelter/group home.

    Another case involved pregnant sisters living in a foster home 
where lack of communication and cultural differences made the home a 
``silent battleground'' fraught with passive-aggressive behavior and 
disrespect. This example shows how my job is so much more than 
``nursing'' duties. My training in motivational interviewing and family 
communication was instrumental in encouraging open communication and 
understanding between all parties, which afforded the development of 
chore charts and house rules agreed upon by all.

    I have learned many things over my years as a nurse home visitor 
that have helped me serve my clients better. I believe that the beauty 
of the model is meeting our clients where they are and building on 
their own desire to change their lives. When needed, flexibility of not 
only a visit schedule and location, but also the ability to check-in 
via text, encourages continuity of care during a very important time in 
a teen's life. I also believe that sustained involvement of family 
members and fathers during visits is very important to the Nurse-Client 
relationship.

    One of the biggest challenges I have identified when working with 
my teen population is maintaining participation when mom is not quite 
on board or feels that the program will be intrusive and/or has no 
value. By identifying this obstacle during intake, I try to defer to 
mom's own role as parent--emphasizing her strengths and encouraging her 
to share home remedies and beliefs. This type of conversation goes a 
long way in developing trust between the nurse and client. 
Additionally, spending time with the family doing creative activities 
(like making green smoothies or homemade baby food) helps to encourage 
participation in a more relaxed manner while also attempting to make 
small changes in the families food choices and health practices.

    These stories are just a glimpse of the impact that Nurse-Family 
Partnership has on low-income, first-time parents. NFP can help break 
the cycle of poverty by empowering young mothers to become 
knowledgeable parents who are able to confidently care for their 
children and guide them along a healthy life course. NFP nurses use a 
client-centered approach, which means the nurse is constantly adapting 
to the needs of the family, ensuring that each visit is relevant and 
valued by the parent(s). These client-centered principles drive our 
practice with families to create positive, lasting change for the 
family that sustains long after our time as their nurse home visitor 
has ended. These principles include:

          The client is the expert on her own life. When the client is 
        the expert, you build solutions based on information provided 
        by the client on what's relevant and valued to her.
          Follow the client's heart's desire. The client leads the way 
        and the central focus is on what the client wants. Find out 
        what they want to do and help them do it.
          Focus on strengths. By focusing on capabilities, 
        opportunities and successes, while being aware of risk factors, 
        you can support the client through tough situations and 
        encourage them to move forward, in turn, helping them to 
        develop this strength within themselves that can sustain long 
        after my visits are completed.
          Focus on solutions.
          Only a small change is necessary. The experience of one 
        small success builds self-efficacy and causes a ripple effect 
        in other areas of functioning and creates a context for bigger 
        changes.

    NFP nurses also continue to monitor the model's progress in the 
field through data collection, which nurses submit to the national 
database, and receive quarterly and annual reports evaluating the local 
program's ability to achieve sizeable, sustained outcomes. Each NFP 
implementing agency's goal is not only to improve the lives of first-
time families, but also replicate the nurse home visitation model that 
was proven to work through rigorous research.

    NFP is an evidence-based program with multi-generational outcomes 
that have been demonstrated in three randomized, controlled trials that 
were conducted in urban and rural locations with Caucasian, African-
American and Hispanic families. A randomized, controlled trial is the 
most rigorous research method for measuring the effectiveness of an 
intervention because it uses a ``control group'' of individuals with 
whom to compare outcomes to the group who received a specified 
intervention. The NFP model has been tested for over 38 years through 
ongoing research, development, and evaluation activities conducted by 
Dr. David L. Olds, founder of the NFP model and Director of the 
Prevention Research Center for Family and Child Health (PRC) at the 
University of Colorado in Denver.

    Dr. Olds and his research team have conducted three randomized, 
controlled trials with diverse populations in Elmira, NY (1977), 
Memphis, TN (1987), and Denver, CO (1994). Evidence from one or more of 
these trials demonstrates powerful outcomes including the following (in 
connection to each of NFP's program goals):

Improved pregnancy outcomes

          Reductions in high-risk pregnancies as a result of greater 
        intervals between first and subsequent births, including a 28-
        month greater interval between the birth of first and second 
        child:
            31% fewer closely spaced (<6 months) subsequent 
        pregnancies,
            23% reduction in subsequent pregnancies by child age 
        2, and
            32% reduction in subsequent pregnancies for the mother 
        at child age 15 (among low-income, unmarried group);
          79% reduction in preterm delivery among women who smoked; 
        and
          35% fewer hypertensive disorders during pregnancy.

Improved child health and development

          39% fewer injuries among children (among low-resource 
        group);
          56% reduction in emergency room visits for accidents and 
        poisonings;
          48% reduction in child abuse and neglect;
          50% reduction in language delays of child age 21 months;
          67% reduction in behavioral and intellectual problems at 
        child age 6;
          26% improvement in math and reading achievement test scores 
        for grades 1-3;
          59% reduction in arrests at child age 15; and
          90% reduction in adjudication as PINS (person in need of 
        supervision) for incorrigible behavior.

Increased family self-sufficiency

          61% fewer arrests of mothers at child age 15;
          72% fewer convictions of mothers at child age 15;
          20% reduction in welfare use;
          46% increase in father presence in household; and
          83% increase in labor force participation of mothers at 
        child age 4.

    As the NFP model has moved from science to practice, great emphasis 
has been placed on building the necessary infrastructure to ensure 
quality and fidelity to the research model during the replication 
process nationwide. In addition to intensive education and planned 
activities for nurses to conduct in the home, NFP has a unique data 
collection system called Efforts-to-Outcomes (ETO) that helps NFP 
monitor program implementation and outcomes achieved. It also provides 
continuous quality improvement data that can help guide local practices 
and monitor staff performance. NFP's ETO system was designed 
specifically to record family characteristics, needs, services 
provided, and progress towards accomplishing NFP program goals.

    NFP's replication plan reflects a proactive, state-based growth 
strategy that maximizes fidelity to the program model and ensures 
consistent program outcomes. NFP urges Congress to support a wide range 
of home visitation models that meet the highest level of evidentiary 
standards in order to ensure the largest possible economic return on 
investment. NFP applauds Congress for their bipartisan, bi-cameral 
support for the MIECHV program and in particular, this committee for 
your collective commitment to funding programs proven to work through 
rigorous, scientific evidence and research.

    In addition, NFP strongly supports Pay for Success as way to bring 
our program to more moms and babies. We recently launched our first Pay 
for Success project in South Carolina, which will expand NFP services 
to an additional 3,200 families statewide over the next 4 years. 
Thirteen million dollars of the $30 million project is funded by a 
1915(b) Medicaid waiver, which was awarded to South Carolina by the 
Centers for Medicare and Medicaid Services. The remaining $17 million 
is supported by philanthropic investors. South Carolina will make up to 
$7.5 million in success payments to sustain our services in South 
Carolina only if the independent evaluator, J-PAL of North America, 
finds positive results. The pilot for this project launched in January 
and we had a successful full launch last month.

    We believe that Pay for Success represents an opportunity for smart 
policy to incentivize the growth of evidence-based programs. For that 
reason, we firmly support S. 1089, the Social Impact Partnerships Act 
(SIPA), sponsored by Mr. Chairman and Senator Bennet of Colorado, as 
well as its House companion, H.R. 1336. Amongst several provisions, 
this bill would create a new 10-year, $300 million fund to support 
State and local pay for success projects. Federal financial support for 
Federal savings achieved through State PFS projects is critical, and 
these bills provide critical Federal incentives to support smart State 
policies. For NFP, this part of SIPA is particularly important since 
Dr. Ted Miller's analysis of NFP outcomes across 39 evaluation reports 
project that 65% of NFP savings accrue to Medicaid (explained in 
further detail below). Without Federal support for NFP PFS projects, 
States are required to pay back investors for all of the Federal 
Medicaid and other savings achieved. Absent SIPA, South Carolina was 
able to build the PFS project on the foundation of the 1915(b) waiver, 
which made it possible to leverage Federal financial support through 
that vehicle.

    Independent evaluations have found that investments in NFP lead to 
significant returns to society and government (Washington State 
Institute for Public Policy, 2004 and 2008; 3 RAND Corporation studies 
1998, 2005, 2008; Blueprints for Violence Prevention, Office of 
Juvenile Justice and Delinquency Prevention; and Pacific Institute for 
Research and Evaluation). Blueprints identified NFP as 1 of 11 
prevention and intervention programs out of 650 evaluated nationwide 
that met the highest standard of program effectiveness in reducing 
adolescent violent crime, aggression, delinquency, and substance abuse. 
The RAND and Washington State reports weighed the costs and benefits of 
NFP and concluded that the program produces significant benefits for 
children and their parents, and demonstrated a savings to government in 
lower costs for health care, child protection, education, criminal 
justice, mental health, government assistance and higher taxes paid by 
employed parents. Most recently, the Pacific Institute for Research and 
Evaluation released a study in August 2015 which found significant 
government savings from the NFP model in particular, Medicaid and 
health care cost savings. This study projects that NFP will reduce 
Medicaid spending per child by 8.5% from birth to age 18, leading to 
$1.4 billion in total savings for the 177,517 children served by 
operational programs from 1996-2013. The study also projects that NFP 
will reduce estimated spending on Temporary Assistance by Needy 
Families (TANF) and food stamps by $3 billion (present value in 2010 
dollars). By comparison NFP costs $1.6 billion to serve those children 
and their families.

    The Nurse-Family Partnership thanks the committee for your 
continued interest in harnessing the ability of evidence-based programs 
to improve the daily lives of people who need it most. Programs like 
NFP improve a host of conditions that hinder children and families from 
becoming healthy, thriving in school and achieving economic success, 
and smart implementation and expansion can save scarce taxpayer 
resources and produce tangible results. I hope that the committee will 
continue to support and expand funding streams that promote evidence-
based social programs. Thank you again, Chairman Hatch, Ranking Member 
Wyden, and members of the committee, for the opportunity to testify 
today.

                                 ______
                                 
 Prepared Statement of Robert Doar, Former Commissioner, New York City 
Human Resources Administration, and Current Morgridge Fellow in Poverty 
                 Studies, American Enterprise Institute
    The American Enterprise Institute for Public Policy Research (AEI) 
is a nonpartisan, nonprofit, 501(c)(3) educational organization and 
does not take institutional positions on any issues. The views 
expressed in this testimony are those of the author.
               following the evidence to better policy: 
        how evidence-based policymaking helped poor new yorkers
    Chairman Hatch, Ranking Member Wyden, and other distinguished 
members of the committee, thank you for the opportunity to testify 
today on how the use of 
evidence-based policy can improve our safety net and help low-income 
Americans move up.

    In my 18 years of experience in New York City and New York State 
administering many of our Nation's major safety net programs, we were 
determined to achieve progress in the fight against poverty. Results 
mattered much more than intentions. In both New York and here in 
Washington, I have found that conservatives and liberals may have 
different ideas for helping low-income Americans, but we all share a 
desire to enact policies that actually succeed in reducing poverty.

    At a time when government resources are limited, it is more 
important than ever to make sure the programs we do fund are effective 
and achieve results. Relying on evidence when making decisions on how 
to use government funds can lead to better policy and better outcomes 
for Americans.

    Evidence-based policymaking entails compiling strong evidence about 
what works and what doesn't, using administrative data systems more 
effectively, and ending failing programs, while scaling up successful 
ones. During my time in government, I've been a part of a number of 
efforts that modeled this approach. Today, I will share the lessons 
learned in those experiences as well as highlight areas where 
policymakers could do a better job bringing these principles to bear.
I. Conducting Rigorous Evaluations
    In order to pursue evidence-based policymaking, we must first build 
the evidence around practices, policies, and programs. Often, this 
requires randomized controlled trials (RCTs) that randomly assign 
participants into a treatment group that receives the intervention or a 
control group and tracks their results over time. This type of 
evaluation helps researchers mitigate selection bias and conduct impact 
analyses of government initiatives that can compare the program's 
outcomes to a counterfactual without the intervention.

    In New York City, we performed rigorous evaluations of over 30 new 
initiatives as a part of Mayor Bloomberg's Center for Economic 
Opportunity. These experiments ranged from increasing the earned-income 
tax credit for childless workers (Paycheck Plus) to a city office 
dedicated to educating low-income residents on managing their finances. 
But one in particular received a lot of attention, the first 
conditional cash transfer program in the developed world. The program--
Family Rewards--provided cash payments to individuals who took positive 
actions, such as going to the doctor or ensuring their children 
regularly attended school.

    New York City leadership was excited about the potential of this 
program, but we lacked solid evidence of whether or not it would 
actually work. In order to find out, Gordon Berlin and MDRC conducted 
the evaluation of the experiment. Overall, the results showed the 
program was not successful. While participants saw lower poverty levels 
as a result of the program, most of the income gains came from the 
transfers themselves, not from increased earnings. And once the program 
ended, the treatment group's incomes were not substantially different 
from the control group. We were also disappointed to see that these 
incentives did not significantly change the behavior of participants in 
the vast majority of the outcomes incentivized in the program.\1\
---------------------------------------------------------------------------
    \1\ James Riccio et al., ``Conditional Cash Transfers in New York 
City: The Continuing Story of the Opportunity NYC-Family Rewards 
Demonstration,'' MDRC, September 2013, http://www.mdrc.org/sites/
default/files/Conditional_Cash_Transfers_FR%202-18-16.pdf.

    It was not surprising that a program that gave people cash 
transfers increased the amount of cash participants received. But a 
major objective of the program was to reduce intergenerational poverty 
by encouraging human capital investments and positive behavior change. 
Importantly, when the program did not have the positive impact we were 
hoping for, Mayor Bloomberg phased out the program. This does not mean 
that the experiment itself failed. Rather than business-as-usual, 
indefinite spending with unknown results, we avoided sinking resources 
into expanding a program citywide that would not meet our expectations. 
In addition, we also learned important lessons that have informed new, 
---------------------------------------------------------------------------
similar experiments in other cities across the country.

    Throughout the country and the Federal Government, there should be 
a similar effort to rigorously evaluate new and existing programs and 
policies whenever possible. The Commission on Evidence-Based 
Policymaking, established by the recent Ryan-Murray bill, is an 
excellent step in the right direction. The commission will reduce 
barriers for researchers, support the creation of more helpful data 
sets to answer key policy questions, and facilitate the use of RCTs for 
compiling evidence across the country.

    An important new report from the National Academy of Sciences, 
``Advancing the Power of Economic Evidence to Inform Investments in 
Children, Youth, and Families,'' recommends that government agencies 
document the extent to which existing funding is supporting programs 
backed by evidence. While that report focuses on best practices around 
economic evidence, such as cost-benefit analysis, it notes that such 
methods rely on intervention impact evaluations. Preferably, cost-
benefit analysis should be based on evaluations that use an RCT or a 
quasi-experimental method that can reasonably support causal inference. 
However, as the report notes, often this data does not exist due to 
``previous inattention to what might be required for later 
evaluations.'' \2\ Federal lawmakers and the new Commission of 
Evidence-Based Policymaking should take steps to encourage proper 
attention to rigorous evaluations, improve access to needed data, and 
promulgate best practices.
---------------------------------------------------------------------------
    \2\ Eugene Steuerle and Leigh Miles Jackson, eds., Advancing the 
Power of Economic Evidence to Inform Investments in Children, Youth, 
and Families (Washington, DC: The National Academies Press, 2016).

    As a senior fellow at Results for America and a member of the new 
Evidence-Based Policymaking Collaborative (which brings together 
scholars from a range of think tanks), in the coming months I will be a 
part of efforts to celebrate successes in using evidence and publish 
briefs on new tools that can help bridge the divide between program 
administrators and researchers.
II. Scaling Up Successful Programs
    Just as programs failing to show results must be ended, programs 
backed by rigorous evaluations should see more resources channeled 
their way. This does not have to necessarily mean more government 
spending overall. Instead, policymakers should make a consistent effort 
to shift the resources we decide we are willing to commit to these 
areas away from ineffective programs and toward ones that are evidence-
based.

    One program that has been subject to rigorous evaluations and 
consistently delivered a positive impact on outcomes was the Nurse-
Family Partnership (NFP). Created by Dr. David Olds, the initiative 
connects registered nurses with first-time, low-income mothers during 
pregnancy and the early years of the child's life. While the woman is 
pregnant, the home visits provide guidance on diet and substance abuse 
and other choices that can affect the health of the child. After the 
birth, nurses can teach the mothers about the importance of child-
parent interaction for the development of the child and help the 
mothers better care for themselves as well.

    Critically, Dr. Olds and his colleagues conducted three RCTs in 
different places to evaluate the program and followed up with 
participants in the study regularly for decades. They found that it 
generated long-lasting benefits for both mothers and their children. 
Participating children saw improved cognitive development and reported 
fewer behavioral problems, and their mothers saw reduced mortality and 
relied less on public benefits.\3\ A RAND Corporation study estimated 
the program returned $5.70 in social benefits for every dollar invested 
in the high-risk population.\4\
---------------------------------------------------------------------------
    \3\ David Olds et al., ``Effect of Home Visiting by Nurses on 
Maternal and Child Mortality: Results from a 2-Decade Follow-Up of a 
Randomized Clinical Trial,'' JAMA Pediatrics 168, no. 9 (September 
2014); John Eckenrode et al., ``Long-Term Effects of Prenatal and 
Infancy Nurse Home Visitation on the Life Course of Youths: 19-Year 
Follow Up of a Randomized Trial,'' Archives of Pediatrics and 
Adolescent Medicine 164, no. 1 (January 2010); David Olds et al., 
``Effects of Nurse Home-Visiting on Maternal Life Course and Child 
Development: Age 6 Follow-up Results of a Randomized Trial,'' 
Pediatrics 114, no. 6 (December 2004); and David Olds et al., ``Effects 
of Home Visits by Paraprofessionals and by Nurses: Age 4 Follow-Up 
Results of a Randomized Trial,'' Pediatrics 114, no. 6 (December 2004).
    \4\ Lynn Karoly, Rebecca Kilburn, and Jill Cannon, Early Childhood 
Interventions: Proven Results, Future Promise (Washington, DC: RAND 
Corporation, 2005), http://www.rand.org/content/dam/rand/pubs/
monographs/2005/RAND_MG341.pdf.

    Once the Nurse-Family Partnership model had developed this strong 
evidence base, it warranted being adopted on a large scale. In New York 
City, a small public-private partnership NFP initiative was piloted in 
2003, but Mayor Bloomberg's Center for Economic Opportunity, of which I 
was a part, made scaling up the program a priority. The program grew by 
383 percent between 2007 and 2011.\5\ And our program made a 
significant impact: children in the program are 16 percentage points 
more likely to be current with their immunizations at 24 months, and 
teenage mothers in the program are 15 percentage points more likely to 
attain a high school diploma or GED.\6\
---------------------------------------------------------------------------
    \5\ Altman Foundation, ``Fund for Public Health in New York/Nurse-
Family Partnership,'' http://www.altmanfoundation.org/our_approach/
program_highlights/fund-for-public-health/.
    \6\ Ibid.

    Policymakers across the country should take similar steps to expand 
programs that rigorous evaluations show are affecting outcomes. This 
has implications for Federal policymakers. For instance, in the AEI-
Brookings report on poverty and opportunity, our bipartisan group 
agreed to continue Federal support of the Maternal, Infant, and Early 
Childhood Home Visiting (MIECHV) program, which funds home-visiting 
programs (including NFPs) and allocates 75 percent of its grant dollars 
to evidence-backed programs.\7\ And we called upon States--who allocate 
around a billion dollars annually to similar programs--to explicitly 
tie more of their funding to evidence-based models.\8\ However, this 
principle should not be limited to home-
visiting initiatives. From work programs to child nutrition 
interventions, only practices with a proven track record of results 
should be expanded.
---------------------------------------------------------------------------
    \7\ AEI-Brookings Working Group on Poverty and Opportunity, 
Opportunity, Responsibility, and Security: A Consensus Plan for 
Reducing Poverty and Restoring the American Dream, American Enterprise 
Institute and Brookings Institution, 2015, http://www.aei.org/
publication/opportunity-responsibility-and-security/.
    \8\ Pew Center on the States, ``States and the New Federal Home 
Visiting Initiative: An Assessment from the Starting Line,'' Pew 
Charitable Trusts, August 2011, http://www.pewtrusts.org/en/research-
and-analysis/reports/2011/08/24/states-and-the-new-federal-home-
visiting-initiative-an-assessment-from-the-starting-line.

    Other approaches, such as performance-based contracting, can ensure 
that government dollars are being directed toward programs that work. 
In New York City, vendors who contracted with the Human Resources 
Administration were placed on a 100 percent performance-based payment 
structure that compensated service providers for helping an individual 
gain employment. Contractors were only paid for job placements where 
they could demonstrate that the client had retained the job for at 
least 30 days. Not only did this incentivize vendors to improve their 
performance, it ensured that taxpayer dollars went only to contractors 
when they delivered the outcome we were looking for--a job for the 
---------------------------------------------------------------------------
recipient of assistance.

    In a recent paper, my AEI colleague Kevin Corinth proposes using 
performance-based contracting to help alleviate homelessness. His plan 
involves measuring the performance of specific service providers in 
helping their clients avoid sleeping on the streets, make mental health 
gains, and stay out of prison. Then, service providers with 
consistently better performance, after adjusting for the vulnerability 
of their clients, should receive more clients and more government 
funding.\9\
---------------------------------------------------------------------------
    \9\ Kevin Corinth, ``Pay for Performance: A New Solution for 
Vulnerable Homeless Adults,'' AEI Economic Perspectives, April 2016, 
http://www.aei.org/publication/pay-for-performance-a-new-solution-for-
vulnerable-homeless/.

    Similarly, pay-for-success models, also known as Social Impact 
Bonds, allow innovative social programs to receive upfront funding from 
private investors, and if they meet an agreed-to metric of success, 
only then will government compensate investors. This approach has 
tremendous potential but will also come with administrative challenges 
---------------------------------------------------------------------------
and has only been used in a handful of trials in the United States.

    One challenge in particular is finding governments willing to pay 
for specific outcomes. For example, the Nurse-Family Partnership, which 
is part of a pay-for-
success project in South Carolina, can drive savings to health, child 
welfare, and other systems--but getting any single system to backstop 
repayment for the program is a barrier. Bipartisan legislation--in the 
form of the Social Impact Partnership Act (SIPA) sponsored by Senators 
Hatch and Bennet and Representatives Young and Delaney--could help to 
solve that problem by setting aside Federal resources to help State and 
localities pay for better outcomes and incentivize collective savings 
across multiple layers of government. Further, SIPA requires rigorous 
evaluations of new pay-for-success projects ensuring that we will 
continue to learn more about what works and bolster the evidence base 
for social interventions.

    Finally, we should continue to build infrastructure that helps 
policymakers at all levels of government advance evidence-based 
reforms. The Education Department's What Works Clearinghouse, which 
reviews and summarizes recent scientific evidence on the effectiveness 
of certain practices, has been a tremendous resource for State and 
local leaders. I have called for the Administration for Children and 
Families to create a similar hub for research on evidence-based 
practices that help TANF recipients find employment.\10\ All Federal 
agencies should pursue a similar approach.
---------------------------------------------------------------------------
    \10\ Robert Doar, Angela Rachidi, and Maura Corrigan, ``Comments on 
the House Ways and Means TANF Reauthorization Discussion Draft,'' 
statement to the Subcommittee on Human Resources, Committee on Ways and 
Means, U.S. House of Representatives, July 24, 2015.

    Results for America recently released their 2016 Invest in What 
Works Index, which highlights the extent to which specific agencies and 
departments are currently building the infrastructure necessary to be 
able to use data and evidence in budget, policy, and management 
decisions.\11\ The index shows the important work already being done to 
incorporate evidence into policy at the Federal level, as well as 
places where improvement is necessary.
---------------------------------------------------------------------------
    \11\ Results for America, ``2016 Federal Invest in What Works 
Index,'' April 18, 2016, http://results4america.org/policy-hub/2016-
federal-invest-works-index/.
---------------------------------------------------------------------------
III. Harnessing Administrative Data
    To build the evidence base around policy ideas, researchers need 
high-quality data. Policymakers cannot make informed decisions without 
a clear picture of what is happening in our safety net programs. Both 
of those objectives are complicated by the fact that there are inherent 
flaws in our primary tool for collecting information about these 
programs: government survey data. Dr. Bruce Meyer of the University of 
Chicago has documented in several studies that misreporting of income 
and benefit receipt are common in surveys. In one recent study that 
matched State administrative records to Census Bureau survey data, he 
and a coauthor found that the Current Population Survey missed program 
receipt for 40 percent of SNAP recipients and 60 percent of TANF and 
General Assistance recipients.\12\
---------------------------------------------------------------------------
    \12\ Bruce Meyer and Nikolas Mittag, ``Using Linked Survey and 
Administrative Data to Better Measure Income: Implications for Poverty, 
Program Effectiveness, and Holes in the Safety Net,'' AEI Economics 
Working Paper Series (2015), https://www.aei.org/publication/using-
linked-survey-and-administrative-data-to-better-measure-income-
implications-for-poverty-program-effectiveness-and-holes-in-the-safety-
net/.

    However, administrative data is important because it provides not 
only more accurate information, but also enables new ways of evaluating 
policies and practices. For instance, RCTs are often expensive and 
time-consuming, particularly if they require longitudinal follow-up. 
After separating participants into the treatment and control groups and 
administering the treatment, researchers must then keep up with the 
participants for years, tracking their life outcomes through surveys. 
But not all experiments need to be so costly. An alternative is to use 
administrative data for low-cost RCTs that are fairly easy to 
---------------------------------------------------------------------------
administer for States and localities.

    Consider a hypothetical example of how this technique could be used 
to test a job training program. Researchers administer the program 
through an RCT, but instead of having to stay in touch with thousands 
of participants, they could simply compare the treatment group with the 
control group in outcomes that administrative data already tracks. In 
evaluating a job training program's impact, determining whether its 
participants receive higher earnings, depend less on government 
assistance, or are more likely to pay owed child support can likely 
show whether it is effective or not. To illustrate just how cost-
effective this approach can be, the Coalition for Evidence-Based 
Policymaking held a competition for designing and conducting a low-cost 
RCT, and all three winners had a total cost of less than $200,000.\13\ 
While not every evaluation can be done this affordably, efforts should 
be made to encourage this important tool, which can radically expand 
our evidence base for many programs and interventions at all levels of 
government.
---------------------------------------------------------------------------
    \13\ Coalition for Evidence-Based Policy, ``Low-Cost RCT 
Competition,'' http://coalition4
evidence.org/low-cost-rct-competition/.

    Similar in concept is what has been termed ``rapid-cycle 
evaluation.'' Rapid-cycle evaluation is intended to quickly study a new 
program or program change using rigorous methods. It is designed to 
help policymakers make tough decisions about the best way to implement 
programs and whether reforms and tweaks make sense without waiting 
years for the results of an evaluation. Evaluators work closely with 
program administrators to test new strategies and quickly provide 
---------------------------------------------------------------------------
results so that decisions can be made.

    In New York City, we performed a number of rapid-cycle evaluations. 
We piloted a Child Support Enforcement initiative that invited 
noncustodial parents to an initial meeting at the Customer Service 
Center in hopes that we could increase the number of orders established 
by trying to reach an agreement in a friendlier environment than a 
courtroom. We tested incorporating different messages into the SNAP 
online application that behavioral economics evidence suggested would 
improve accuracy and honesty from applicants. All involved a randomly 
assigned treatment and control group, and we used administrative data 
to compare outcomes across groups.

    The uses of this technique are limitless for administrators. From 
studying whether a reminder phone call improves client attendance at 
meetings to piloting new approaches for educating recipients about 
healthy behaviors, rapid-cycle testing allows policymakers to 
constantly improve existing programs.

    But evidence-based strategies shouldn't end once programs have 
proven effective through rigorous evaluations. Administrative data 
should also be used for ongoing performance monitoring. Data-driven 
oversight can improve program performance by holding managers 
accountable for delivering results. In New York City, we used a 
performance management system called ``JobStat,'' modeled after the 
CrimeStat initiative undertaken by the NYPD.

    Every local welfare office, or ``job center'' as we called them, 
was issued a monthly report card that compared their performance on a 
number of measures, such as job placements, to what they did the 
previous month and what has happened in other offices. Managers heard a 
very clear message from the administration as to which measures we were 
interested in and what goals we expected them to meet. We met with each 
manager every month to hear how they were doing and, sometimes, to 
press them on why they weren't doing better.

    This process engrained a culture of focusing on outcomes and 
learning from others who were having success--values central to the 
evidence-based policymaking approach. Throughout government agencies at 
all levels, administrators should be expected to develop similar 
cultures that emulate the principles of evidence-based policymaking in 
the day-to-day functioning of the bureaucracy.
IV. Conclusion
    Evidence-based policymaking should not be a partisan issue. 
Liberals and conservatives are interested first and foremost in 
results, and we all agree that the government dollars we already spend 
fighting poverty should be used in ways that deliver the biggest 
impact. While all policymakers believe their decisions are backed by 
evidence, evidence-based policymaking is about following a specific 
process. New and existing programs must be evaluated in a way that 
establishes impact over a counterfactual; programs that rigorous 
evaluations show to be effective should be scaled up, while initiatives 
failing to have success must be phased out; and administrative data 
should be used to make it easier to conduct evaluations and to enable 
incremental improvements in program administration.

    I know from personal experience that program administrators are 
always looking for new research that can help them do their jobs 
better. Federal policymakers should encourage, enable, and remove 
barriers to conducting evidence-based policymaking at all levels of 
government.

                                 ______
                                 
              Prepared Statement of Hon. Orrin G. Hatch, 
                        a U.S. Senator From Utah
WASHINGTON--Senate Finance Committee Chairman Orrin Hatch (R-Utah) 
today delivered the following opening statement at a hearing to examine 
the role of outcomes and evidence standards in shaping social policies 
and how they can be best applied to program delivery and financing 
models:

    Good afternoon. I'd like to welcome everyone to today's hearing on 
evidence-based practices and their potential impact on our child 
welfare system.

    According to the Social Policy Institute, ``Evidence-based practice 
is a process in which the practitioner combines well-researched 
interventions with clinical experience and ethics, and client 
preferences and culture to guide and inform the delivery of treatments 
and services. The practitioner, researcher, and client must work 
together in order to identify what works, for whom, and under what 
conditions. This approach ensures that the treatments and services, 
when used as intended, will have the most effective outcomes as 
demonstrated by the research. It will also ensure that programs with 
proven success will be more widely disseminated and will benefit a 
greater number of people.''

    Over the years, in an effort to use taxpayer dollars more 
efficiently, policymakers have attempted to incorporate more evidence-
based practices in order to improve outcomes for vulnerable children 
and families. Just looking at the jurisdiction of the Senate Finance 
Committee, there are a couple of major examples, such as the Regional 
Partnership Grants and the Maternal, Infant, and Early Childhood Home 
Visiting Program.

    Many experts and observers agree that, when implemented correctly 
and with strict adherence to the model, evidenced-based interventions 
can be an effective strategy to help vulnerable families and at-risk 
individuals. They can also reduce bureaucracy and eliminate the 
creation of perpetual and redundant programs that do not work. And, 
they can allow for local leaders to decide what is best and inject 
private-sector creativity into social services.

    But most important, evidenced-based interventions help ensure that 
taxpayers only pay for what works.

    In most programs, the Federal Government and States pay for 
processes or simply reimburse for costs, while evidenced-based 
interventions, when implemented correctly, help guarantee that 
government pays for success in achieving a desired outcome.

    This is particularly true in the context of the child welfare 
system.

    For example, we know that untreated substance abuse and mental 
health issues can lead to situations where children are neglected, 
which is the most common impetus for removing children from their homes 
and placing them in the foster care system. However, if we can find 
ways to effectively address these conditions, more children will remain 
safely at home. That is why Senator Wyden and I have been working for 
some time now on a proposal to improve the child welfare system. And, a 
key component of the Hatch-Wyden proposal is that these types of 
interventions must be evidenced-based. Currently, we are working with 
our House colleagues on bipartisan, bicameral legislation that we hope 
will provide more effective up-front services to help vulnerable 
families.

    As part of the discussion on evidence-based practices, we will also 
focus on what some call social impact financing, sometimes referred to 
as social impact bonds, social impact partnerships, or pay for success.

    I am a strong supporter of this approach, which is why I am pleased 
to have been able to work with Senator Bennet to introduce legislation 
that will foster the creation of public-private partnerships that will 
harness philanthropic and other 
private-sector investments to establish or scale up evidence-based 
social and public health programs.

    Furthermore, under our Social Impact Partnership bill, the Federal 
Government would establish desired outcomes to pressing social 
challenges that, if achieved, would improve lives and preserve taxpayer 
resources. State and municipal governments could then submit proposals 
to work towards those outcomes by establishing or scaling up existing 
evidence-based interventions.

    We believe this program would encourage private-sector investors to 
provide the necessary capital to establish or expand the interventions. 
Then, if an independent evaluator is able to certify that the desired 
outcomes are achieved at reduced costs, the investors would be paid 
back their initial investment plus a small return from the realized 
government savings. There are a number of reasons I believe that social 
impact financing is key to improving outcomes for vulnerable children 
and families.

    For example, social impact financing provides for continual program 
improvement and ensures that all parties remain focused on the 
performance of the program and have the ability to make ongoing 
adjustments to ensure the outcomes are realized.

    In addition, social impact financing gives local leaders the 
flexibility to design and adjust programs to fit local needs in order 
to ensure they have the desired impact.

    And, as I stated earlier, when done correctly, social impact 
financing ensures that taxpayers pay only for what works. In most 
Federal programs, taxpayers are on the hook for set costs of processes 
and/or reimbursements with little or no regard for effectiveness. With 
social impact financing, success is measured by the ability of a 
program to achieve a desired outcome, and taxpayers only have to pay 
for whatever achieves that objective.

    Now, some critics of social impact financing may point out examples 
where the proposed interventions have not produced the desired results. 
They'll raise examples of specific instances in which an intervention 
did not achieve the desired outcome and try to claim that it was a 
failure.

    But I think these critics are missing the point.

    Make no mistake, there have been instances in which, under a social 
impact financing model, a specific proposal has not produced the 
desired outcome and was eventually discontinued. However, that is 
precisely how the model is supposed to work. Indeed, programs and 
policies that are flexible enough to respond to outcomes--recreating 
and disseminating successes while eliminating failures--is our goal 
with social impact financing.

    That said, I am willing to admit that there is much more we can and 
should learn about the implementation and delivery of social impact 
financing. That is part of the reason for today's hearing.

    Today we will hear from a distinguished panel of witnesses who will 
discuss 
evidenced-based policies and practices and share with us some of their 
successes and warnings for the future. I look forward to an interesting 
and robust discussion of all of these issues.

                                 ______
                                 
          Prepared Statement of James Lee Sorenson, Chairman, 
             Board of Directors, Sorenson Impact Foundation
    It is a pleasure and an honor to be with you today to discuss a 
matter of great importance--which is how can we more effectively 
measure and direct social spending in this country to produce 
successful outcomes.

    My life is one as a business entrepreneur turned philanthropist. 
When I made the decision to devote my time, efforts and financial 
resources to giving back, I was unsatisfied with traditional 
philanthropy that, compared to the business world I came from, was 
inefficient, unaccountable and didn't move the needle enough in solving 
core problems to produce real outcomes in the lives of those in need.

    Four years ago, I endowed an applied academic center at the 
University of Utah's Business School in order to help direct private 
and philanthropic capital to help solve some of the most perplexing 
social problems, both here in America and abroad in measurable more 
scalable ways through what is known as impact investing.

    Since its inception, the Sorenson Impact Center has facilitated 
over $100 million in investments into scalable, sustainable solutions 
to problems like chronic unemployment and criminal recidivism in the 
U.S. and unsafe drinking water, access to education and health care, 
and rural poverty in places like Sub-Saharan Africa and Southeast Asia.

    Over the past 2 years, the Center has also been engaged in 
structuring nearly a dozen ``pay for success'' projects around the 
country with a variety of stakeholders, including State and local 
government, nonprofit organizations, academics, philanthropists, and 
other funders.

    These projects are aimed at addressing some of the most complex and 
challenging issues facing our country today, including 
intergenerational poverty, homelessness, foster care, mass 
incarceration, chronic unemployment, educational achievement gaps, 
mental illness, and substance use disorders, to name just a few. But 
most importantly, they do it in a way that is more effective by 
employing evidence based best practices and measured outcomes.

    I'd like to give you a brief overview of how the projects work:

        (1)  First, government or another entity like a hospital 
        decides to pay for certain meaningful and measurable outcomes--
        not for activities, not for the promise of outcomes, but for 
        actual achieved outcomes. An example may include a sizable 
        increase of students with diagnosed learning disabilities 
        meeting grade-level performance targets.
        (2)  A service provider--which can be local, regional, or 
        national--then agrees to provide the necessary intervention(s) 
        to deliver the desired outcomes.
        (3)  Philanthropists and/or other funders provide upfront 
        capital to finance the service provider's intervention.
        (4)  An independent evaluator conducts a rigorous evaluation in 
        order to determine whether the service produced those specific, 
        predetermined outcomes.
        (5)  Finally, if those exact outcomes are achieved and the 
        project is successful, government, the hospital, or whichever 
        entity promised to pay upon successfully meeting those 
        outcomes, will then--and only then--pay back the initial 
        funders.

    These projects are noteworthy for a number of reasons:

        (1)  Stakeholders agree at the outset of the project on a set 
        of definitive, measurable indicators of success.
        (2)  We learn more about what programs actually work and which 
        don't, knowledge that Congress and others can use to decide 
        where to allocate limited taxpayer dollars. Often innovative 
        preventative programs that are unfunded by resource scarce 
        government budgets can receive funding.
        (3)  This fosters a competitive social services environment--a 
        virtuous ``race-to-the-top''--for nonprofits and other social 
        service providers since only the most impactful, evidence-based 
        programs are eligible for this type of funding.
        (4)  Nonprofits and social service providers are encouraged and 
        supported to focus more on serving people in need and less on 
        fundraising.
        (5)  Proven, high-quality preventative programs are prioritized 
        over costlier and less effective remedial programs and 
        infrastructure.

            a.  For example, funding an evidence-based substance abuse 
        treatment keeps at-risk individuals out of more expensive jails 
        and prisons, homeless shelters, and emergency departments and 
        keeps their children out of the child welfare and foster care 
        systems.
            b.  This evidence-based intervention results both in a more 
        optimal outcome for the individual and saves society a lot of 
        money over the long-run.

    We have seen significant traction with these projects at the State 
and local levels--nearly a dozen have launched in recent months/years, 
with another 50 in various stages of development across the country, 
spanning both Republican and Democratic States.

    I would also note the tremendous power of the model to bring 
together stakeholders from across the government, nonprofit, academic, 
philanthropic, and for-profit sectors to collectively problem-solve and 
serve individuals and families in need.

    While the Federal Government has, thus far, played an important 
role in all of this by encouraging and developing the capacity of 
various stakeholders to help build a pipeline of projects, it has been 
conspicuously absent in one critically important respect:

        In many of these State and local projects, the lion's share of 
        the societal value and economic benefit generated actually 
        accrues to the Federal Government budget, not the local 
        budgets.

        We call this a ``wrong pockets'' problem in the industry 
        because there's effectively a mismatch between who gets asked 
        to pay for a program and ultimately who stands to benefit most 
        from that program.

    This is why I am so thankful for Chairman Hatch's and Senator 
Bennet's introduction of the Social Impact Partnership Act, S. 1089, 
legislation that directly addresses this issue by enabling the Federal 
Government to pay for a portion of the project outcomes that deliver 
the government direct Federal savings or value. Because State and local 
government cannot, in most cases, tap Federal funding to pay for 
outcomes, they currently have no ability to leverage Federal savings to 
pay for positive outcomes that benefit Federal budgets alongside State 
and local budgets. Consequently, State and local governments today are 
severely limited in the number and scale of pay for success projects 
that can be developed.

    Two examples are worth highlighting in this context:

        (1)  An evidence-based asthma prevention program drives 
        significant savings to the Federal Medicaid budget by cost-
        effectively addressing the key causes of asthma in low-income 
        homes and thereby reducing the incidence of emergency 
        department hospitalizations due to acute asthma attacks.

            a.  However, in many States, local/State governments will 
        realize only pennies on the dollar of overall cost savings to 
        society.
            b.  The Federal Government, on the other hand--through 
        Medicaid in this instance--is the primary beneficiary of the 
        program. Yet Federal agencies currently do not have the ability 
        to negotiate success payments for outcomes with local 
        stakeholders.
            c.  As a result, promising projects like these don't 
        happen, children don't receive proven preventive solutions to 
        debilitating problems like asthma, and the Federal Government 
        keeps paying for costly emergency room visits.

        (2)  A highly evidence-based nurse home visitation program that 
        works with low-income, first-time mothers results in 
        tremendously positive (and valuable) outcomes, like reductions 
        in the incidence of pre-term births, domestic violence, etc.--
        thanks to the tireless work of healthcare providers like Teisha 
        who is with me on the stand from Nurse Family Partnership.

            a.  As with the asthma program, State and local government 
        budgets benefit to a certain degree, but the bulk of the 
        overall benefit accrues to the Federal Government.
            b.  Again, without the ability to leverage those Federal 
        savings, it is very difficult for State or local dollars alone 
        to fund an intervention like Nurse-Family Partnership at scale.

    Tying taxpayer dollars to actual performance in the social sector--
and securing measurable results in individuals' and families' lives--is 
a pretty remarkable innovation, and pay for success financing is 
becoming an important tool to address some of society's most chronic 
and persistent social problems.

    What's also remarkable about the model is the level of bipartisan 
support in State governments and city halls around the country--people 
from across the political spectrum agree that it makes sense to be more 
results-oriented, data-driven, and, ultimately, more accountable in the 
way we address social problems in this country.

    This level of bipartisan support is a tribute to the fact that the 
Senate bill is itself a bipartisan effort by Senators Hatch and Bennet, 
as is its companion bill in the House. This legislation has also been 
cosponsored by Republican Senator Kelly Ayotte and Democratic Senator 
Cory Booker. Further, the legislation's companion bill in the House has 
41 cosponsors and is publicly supported by Chairman Ryan.

    In my experience, pay for success financing really resonates with 
policymakers, partly because they take seriously their role as stewards 
of precious taxpayer resources; it also resonates with many who hold 
out hope that if we are deliberate and thoughtful enough and partner 
with a range of stakeholders along the way, these problems can, in 
fact, be solved.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    I would like to start off by noting that--if my research is 
correct--this is the first ever hearing this committee has held on this 
topic.

    This is a great opportunity to dig into an issue that really should 
be an underpinning of the work Congress does every day. That is to say, 
we should be constantly asking whether the laws we write are working as 
they ought to be.

    And to add another layer on that: does the way the Federal 
Government funds our programs obstruct or facilitate improvement?

    Right here in this committee, there are shining examples on both 
ends of the spectrum.

    The home visiting grants fund a variety of models to help parents 
of young children essentially improve their parenting skills. More 
resources are available for programs that can demonstrate the best 
results, with help along the way for newer, promising programs to build 
up their evidence base.

    The home visiting models have had huge success, leading to 
healthier births, reduced child maltreatment, reduced criminal justice 
system involvement, and higher employment rates for the parents 
themselves.

    On the other end of the spectrum is the Temporary Assistance for 
Needy Families program.

    There are real questions about whether the way success is measured 
in the TANF program is leading to success for the families it is meant 
to help.

    Instead of rewarding States for helping families find work or 
reduce poverty, TANF rewards States for simply reducing the number of 
families they serve regardless of the need.

    And while a small amount of TANF dollars is reserved for welfare 
research, there's no built-in feedback loop to ensure what's being paid 
for is actually what works. Congress ought to be finding ways to build 
in that type of continuous program improvement.

    Now, there are certainly limitations to this approach of funding 
what works and not funding what doesn't.

    To start, researching and evaluating programs can be expensive, and 
in some programs it would be unethical to have a control group that is 
actively denied services. For example, it would be wrong to deny a 
child access to foster care when she is being abused and neglected just 
for the sake of scientifically evaluating the effects of foster care 
against a control group.

    Additionally, bringing evidence-based programs to bigger scale can 
also be expensive--they often rely on a highly educated and trained 
workforce. So progress may be slow.

    Finally, reasonable people can disagree on what it really means for 
a program to be successful. For example, there's no question the SNAP 
program has had success in reducing hunger and food insecurity for many 
families across the Nation, but others may place less value on those 
outcomes.

    I know that witnesses today will speak to new approaches to testing 
out and paying for innovation--especially social impact financing or 
pay for success.

    My home State of Oregon, like many States, is exploring the 
feasibility of social impact financing. And like many States, Oregon is 
witnessing firsthand the challenges with deciding whether taxpayer 
dollars should be used for this type of financing.

    I look forward to the discussion around the strengths and 
limitations of that model.

    I commend the chairman and our colleague Senator Bennet for 
bringing the conversation around these innovative partnerships to the 
Senate and to this committee with their Social Impact Partnership Act.

    To our esteemed witnesses--you've got a lot of ground to cover 
today. This topic is anything but narrow, so I commend you in advance 
for the breadth of expertise you bring to the conversation and look 
forward to hearing from you this morning.

                                 ______
                                 

                             Communications

                              ----------                              


                         Adoption Rhode Island

                      Every Child Deserves a Home

               Two Bradford Street  Providence, RI 02903

       tel: 401-865-6000  fax: 401-865-6001  www.adoptionri.org

To:  Senator Orrin Hatch, Chairman Committee on Finance
    Senator Ron Wyden, Ranking Member Committee on Finance
    Members of the U.S. Senate Committee on Finance

From:  Darlene Allen, Executive Director, Adoption Rhode Island

Re:  Using Evidence-Based Programs to Promote Child Welfare Outcomes

Date:  May 19, 2016
_______________________________________________________________________

Adoption Rhode Island, on behalf of the thousands of children, youth, 
and families we serve in Rhode Island, is pleased to submit this 
written testimony on the importance of evidence-based and evidence-
informed practice in public child welfare. As Chairman Hatch expressed 
during the Senate Finance Hearing on Evidence-Based Delivery and 
Funding for Social Welfare Programs, evidence-based practice can be an 
effective strategy to help vulnerable families and at-risk individuals. 
Adoption Rhode Island strongly supports evidence-based and evidence-
informed interventions designed to improve outcomes for foster children 
and we advocate for funding opportunities to test and evaluate the 
effectiveness of innovative strategies to improve permanency outcomes 
for children and youth.

Founded over 30 years ago, Adoption Rhode Island's mission is to 
facilitate, promote and support the permanent placement of children 
waiting for adoption and to improve the well-being of foster and 
adopted children and their families. We provide services to children 
and families, educate and advocate for a child's right to a safe 
environment, and increase public awareness of the unmet needs of 
children and families impacted by foster care and adoption.

Adopted children who have experienced trauma are two to five times more 
likely to require psychological treatment. Providing individual 
supportive counseling and crisis intervention helps address problems 
early and effectively so that children can move beyond their traumas 
and experience the joy of childhood again. Each year, Adoption Rhode 
Island serves nearly 1,500 children and families through comprehensive 
and flexible support services, including adoption recruitment and 
placement support; individual, family, and group counseling; support 
and education groups for parents, children, teens, and families; and 
adoption preparation and disruption prevention services.

Rhode Island's rate of youth placed in congregate care is twice the 
national average and the foster care system in Rhode Island and across 
the nation experience an over-reliance on psychotropic medication. 
Thirty-five percent (35%) of children in foster care are prescribed 
psychotropic drugs, compared to 10% of other children. Although many 
youth in foster care experience significant emotional challenges, 
mental and behavioral health is the largest unmet health need for 
children and teens in foster care, according to the American Academy of 
Pediatrics. In fact, 30% of foster care alumni are diagnosed with Post-
Traumatic Stress Disorder (PTSD), about twice the rate of combat 
veterans.

According to a ground-breaking study from the Centers for Disease 
Control and Prevention and Kaiser Permanente, experiencing trauma in 
childhood has a significant impact on development, including illness, 
early death, and poor quality of life. When people caring for a 
traumatized child do not understand the connections between a child's 
behavior and his/her trauma history, they can become frustrated and 
impatient with a child's development, which can impact bonding, 
attachment, and permanency. When that child is a foster child, lack of 
understanding of the long reach of trauma can lead to unstable foster 
home placements, exacerbation of traumatic stress, secondary trauma for 
family members, and disruptions in placement and even adoption 
dissolutions.

Foster, adoptive, and kinship caregivers (i.e., resource parents) need 
a foundation of information about child traumatic stress, so they can 
help the child develop new, more positive coping skills. Having this 
knowledge and skills helps resource parents create a nurturing 
environment in which children can thrive. In Rhode Island, there has 
been a significant increase in the number of relatives and kinship 
placements caring for children, up to 31% of out-of-home placements in 
2014. In addition, there are an untold number of relatives caring for 
children who have not been removed from the home by child protective 
services, but whose parents cannot care for them. Many of these 
families who are not involved in public child welfare may need services 
and may be receiving other community-based services. These families 
need access to trauma-informed and permanency-competent services to 
achieve positive outcomes for these youth and families.

Public and private agencies that provide services to children and 
families impacted by foster care and adoption must be able and willing 
to enhance accountability, improve results, and adjust service delivery 
based upon learning what works. Funding of public child welfare 
services must consider compelling evidence that programs will have a 
meaningful and observable impact on the children and families in their 
care, and that demonstrate how the outcomes against which programs have 
been evaluated are relevant, achievable, and impactful. Evidence-based 
programs, evidence-informed programs, and innovative programs developed 
with deep knowledge of child safety, permanency and well-being are 
paramount to achieving success for children and families in the United 
States.

Below are evidence-based, evidence-informed or effective and promising 
practice models offered by Adoption Rhode Island that improve outcomes 
for children and families who have been impacted by foster care and/or 
adoption. We also provide training and education for professionals such 
as the Child Welfare Trauma Training Toolkit, outreach and public 
awareness about foster care and adoption, court liaison services with 
Family Court, and a host of adoption-competent consultation services in 
order to promote not only permanency, but child and family well-being 
as well.

      Caring for Children who have Experienced Trauma (aka Resource 
Parent Curriculum), available through the National Center for Childhood 
Traumatic Stress (NCTSN).
      Darla Henry's 3-5-7 Model--Preparing Children for Permanency.
      Post-adoption Support Services and Family Preservation.
      Wendy's Wonderful Kids Child-Focused Recruitment.
      Family Finding: Family Search and Engagement for Relational and 
Legal Permanency.
      Trauma-Focused Cognitive Behavioral Therapy (TF-CBT).
      Eye Movement Desensitization and Reprocessing (EMDR).

We are encouraged by the commitment to children's safety, permanency, 
and well-being demonstrated by Chairman Hatch, Ranking Member Wyden, 
Senator Bennet, as well as their House colleagues Congressman Langevin 
and Congresswoman Bass and many on both sides of the aisle. It is our 
hope that across the country, effective, efficient and child/family 
focused services are available and accessible for all children and 
families who need them and that the voice of children and families 
impacted by foster care and adoption continues to drive policy and 
financing discussions.

If you would like any more information about the innovative and best-
practice work being done in Rhode Island and other parts of the 
country, please feel free to contact me at 401-865-6000 or 
[email protected]. We look forward to continuing to work together 
to improve the lives of children and families.

Sincerely,

Darlene Allen, MS
Executive Director
Adoption Rhode Island

                                 ______
                                 
                    American Evaluation Association

  2025 M Street, NW, Suite 800 | Washington, DC 20036 USA | Phone: +1-
                              202-367-1166

  USA Toll Free: 1-888-232-2275 | Fax: +1-202-367-2166 | www.eval.org

Date:  May 16, 2016
To:     The Honorable Orrin G. Hatch, Chairman, U.S. Senate Finance 
Committee 
The Honorable Ron Wyden, Ranking Member, U.S. Senate Finance Committee
From:  John Gargani, President, American Evaluation Association
Re:    Senate Finance Committee Hearing ``Can Evidence-Based Practices 
Improve Outcomes for Vulnerable Individuals and Families?'' held on 
Tuesday, May 10, 2016

The American Evaluation Association (AEA) is pleased to write in 
support of the work of this Committee regarding rigorous evaluation of 
federal social programs intended to help low-income Americans. This 
area has a rich tradition of applied research and experiments that have 
provided invaluable information to policy makers. We applaud your 
interest in applying evidence to identify those programs which can best 
help vulnerable families and at-risk individuals.

You mentioned in the recent Committee hearing, ``Can Evidence-Based 
Practices Improve Outcomes for Vulnerable Individuals and Families?'' 
that you have been working for some time now on a bipartisan, bicameral 
legislative proposal to improve the child welfare system. A key 
component of this Hatch-Wyden proposal is that these types of 
interventions must be evidence based. In addition, you cited the Hatch-
Bennet Social Impact Partnership bill reintroduced in April 2015 (S. 
1089), which also relies on evaluation evidence to establish model 
impact before establishing or scaling up programs. Both of these 
initiatives are positive approaches to strengthening the link between 
evaluation and program effectiveness.

Program evaluation is essential because it contributes to assessing the 
strengths and weaknesses of programs, policies, and organizations to 
improve their effectiveness. It provides a useful and important tool to 
address the need for credible information, well-grounded decision 
making, and governmental transparency. Evaluation uses systematic data 
collection and analysis to address questions about how well government 
programs and policies are working, whether they are achieving their 
objectives, and why they are, or are not, effective. It produces 
evidence that can be used to compare alternative programs, guide 
program development and decision making, and reveal effective 
practices. By its very nature, it supplies the publicly accessible 
information that is at the heart of transparency and open government.

AEA supports efforts to ensure more social programs are evaluated to 
determine their impact and to consider how high-quality evidence can 
best be used to inform the design of social programs at the federal 
level. In particular, AEA believes that Congress should ensure that 
sufficient resources are made available for quality evaluation and 
encourage agencies to set guidelines for the conduct of evaluations, 
including the development of evaluation agendas and plans for 
disseminating evaluation findings to staff and the public.

AEA heartily endorses the use of rigorous evidence about what works. 
Depending on the focus of the inquiry and the circumstances under which 
programs operate, a range of evaluation study designs are available to 
provide high-quality actionable evidence about programs. Furthermore, 
evaluations of program impact are most likely to be useful in a broader 
portfolio of evaluation activity which includes attention to program 
enhancement, program implementation, and evidence about the 
generalizability of impact evaluation findings. For example, ancillary 
study of the operations and best practices of programs could inform 
managers and policy makers how best to modify promising programs in 
order to maximize their effectiveness or how to best scale up model 
programs on a wider basis.

These different uses of rigorous, actionable evidence highlight the 
importance of matching available evaluation methods to specific 
contexts. For example, randomized control trials are excellent for 
answering some questions for evidence-based 
decision-making but not others. Further, in some situations where 
ethical, legal, or logistical restrictions may constrain the assignment 
of program participants in a randomized control trial, experimental 
research has shown that strong quasi-
experimental study designs can supply high-quality, credible evidence 
for decision making.

AEA has approximately 7,200 members representing all 50 states and the 
District of Columbia as well as over 80 foreign countries. Members have 
backgrounds in government, academia, foundations, and organizations, 
bringing with them a wealth of knowledge on evaluation approaches and 
the use of evaluation results. On the AEA website is posted a document 
we developed to help governments engage in effective evaluation: An 
Evaluation Roadmap for a More Effective Government [http://
www.eval.org/evaluationroadmap]. I hope you will find it useful.

AEA has long sponsored academic research and fostered exchanges among 
evaluation practitioners regarding evaluation methodologies that can 
most effectively shed light on the causes and remedies for poverty. If 
we can be of assistance, or if you need more information on our 
organization, please do not hesitate to contact me 
([email protected]) or Dr. Cheryl Oros, our senior advisor for 
evaluation policy ([email protected]; 202-367-1166).

Sincerely,

John Gargani, Ph.D.
President, American Evaluation Association

                                 ______
                                 
                            America Forward

                     1400 Eye Street, NW, Suite 400

                          Washington, DC 20004

Senate Finance Hearing:  ``Can Evidence-Based Practices Improve 
Outcomes for Vulnerable Individuals and Families?''
Date:  May 10, 2016

Chairman Orrin Hatch                Ranking Member Ron Wyden
Senate Finance Committee            Senate Finance Committee
Dirksen Senate Office Building      Dirksen Senate Office Building
Washington, DC 20510-6200           Washington, DC 20510-6200

Dear Chairman Hatch and Ranking Member Wyden,

Thank you for the opportunity to submit a Statement for the Record in 
follow up to the Committee's May 10th hearing entitled ``Can Evidence-
Based Practices Improve Outcomes for Vulnerable Individuals and 
Families?''

America Forward is the nonpartisan policy initiative of New Profit, a 
pioneering national venture philanthropy fund that seeks to break down 
barriers between all people and opportunity in America. To date, New 
Profit has invested over $150 million in scaling innovative 
organizations' impact. America Forward's mission is to unite social 
innovators with policymakers and advance a public policy agenda that 
fosters innovation, rewards results, catalyzes cross-sector 
partnerships, and translates local impact into national change.

The America Forward Coalition is comprised of more than 70 social 
innovation organizations that champion innovative, effective, and 
efficient solutions to our country's most pressing social problems. Our 
Coalition members are achieving measurable outcomes in more than 14,500 
communities nationwide, touching the lives of 8 million Americans each 
year, and driving progress in education, workforce development, early 
learning, poverty alleviation, public health, Pay for Success, social 
innovation, national service, and criminal justice reform. Together, we 
have leveraged $1.5 billion for social innovation and have driven 
millions of federal resources toward programs that are achieving 
measurable results for those who need them most. America Forward 
believes that our nation's social innovators can lead the way to 
unlocking America's potential--and help move all of America forward.

What We Believe

At America Forward, we value innovation as an essential mechanism for 
improving our nation's efficiency and effectiveness in addressing 
social challenges. We view innovation as a cycle in which a pattern-
changing idea is developed, assessed, tested, evaluated, and then 
refined (if it successfully achieves greater value) or abandoned (if it 
does not). For this cycle to work in the social policy arena, there 
must be clarity regarding the outcomes sought, flexibility to try new 
approaches and providers, a measurement system to determine if the 
approach is effective, and resources that follow positive results. 
Unfortunately, it is the rare government program that adopts and 
supports this cycle. Too often, outcomes are not clearly specified or 
focused on at all, approaches are too narrowly dictated and do not 
focus on prevention, the ability to measure results are severely 
limited, and resources are locked into specific providers or programs, 
even if others would yield greater value. As a result, the federal 
government may fund the same ineffective programs for decades without 
combating the root cause of the targeted problem, costing taxpayers 
billions of dollars and undermining the potential of the people who the 
programs are intended to help.

During the Senate Finance Committee hearing, the value of outcomes, 
flexibility, measurement, and paying for what works were all touched on 
both by the witnesses and members of the Committee. In addition, the 
current reality of federal government policies and programs, and their 
misalignment with these elements of an innovative approach to our 
social services system, was also lifted up. America Forward believes 
there are key policies that could be advanced to address this 
disconnect and our Coalition members are proof points of how these 
ideas could translate into real impact for individuals in communities 
across our country.

Data, Outcomes, and Measurement

A key element of an innovative and evidence-based social services 
sector is the development of data, the use of data to determine 
outcomes, and access to measurement tools that can analyze data to 
appropriately assess impact. Though the development of data and data 
points across agencies and programs is not an issue for the federal 
government, right now, and for a variety of reasons, the use of and 
access to that data to determine outcomes and assess impact are areas 
where there is a lack of clear policy and needed resources. America 
Forward has concrete ideas as to how to address these problems and 
believes the Committee should consider these policy changes in order to 
advance the effort to an evidence-based social services sector.

    (1)  Subject to privacy protections, the federal government should 
amend laws and regulations to permit relevant federal, state, and local 
agencies, nonprofit organizations, social enterprises, and other 
institutions to have access to federal databases such as the National 
Directory of New Hires and to the Unemployment Insurance Wage Records 
in order to better assess impact of federal programs using 
administrative datasets such as these to drive down the cost of 
evaluations.
    (2)  For key outcomes that are of interest to the federal 
government, Congress, in consultation with relevant agencies, should 
establish uniform outcome definitions and an accurate methodology for 
analyzing these outcomes in order to ensure consistent and accurate 
illustrations of the impact (or lack thereof) of providers and programs 
funded by federal funding.
    (3)  The federal government also has the opportunity to encourage 
the use of low-cost Randomized Controlled Trials (RCTs) that are seen 
as the most rigorous evaluation design format. The government can also 
encourage the use of quasi-experimental designs, which do not require 
random assignment, thereby ensuring that services are not denied to 
those who need them, but maintain control and experimental group rigor.
    (4)  Recently, the Evidence-Based Policymaking Commission Act (H.R. 
1831 and S. 991) was enacted into law establishing a Commission on 
Evidence-Based Policymaking. This Commission is tasked with studying 
how best to expand the use of data to evaluate the effectiveness of 
federal programs and tax expenditures. The development of this 
commission should be supported and the findings of their work should be 
swiftly integrated into the work of this Committee and Congress.

Flexibility

Many federal policies and funding streams have rigorous definitions 
associated with how programs should be structured and the inputs/
outputs associated with the allocation of funding. This lack of 
flexibility results in a lack of innovation in our approach to 
government funded social services. Agency-wide waivers and Performance 
Partnership Pilots are just two examples of current federal policies 
that allow flexibility and the ability for states, localities, and 
providers to innovate on their approach to the delivery of social 
services programs.

Waivers and Performance Partnership Pilots allow demonstration of ways 
to more efficiently and effectively allocate federal mandatory and 
discretionary funding respectively to implement evidence-informed 
practices to improve outcomes for various populations. Broad 
utilization of waivers should be encouraged by states and ideas such as 
Performance Partnership Pilots should be resourced and applied to 
populations beyond opportunity youth. These demonstrations should also 
be continued and expanded to other federal programs serving populations 
in need, both for the knowledge they generate and to inform permanent 
policy approaches to the issues and populations addressed by these 
time-limited demonstrations.

Pay for Success

Pay for Success is a funding approach where government pays for 
services if a program gets results. Pay for Success drives government 
funding toward high-quality, effective programs that measurably improve 
lives. Specific interventions are not spelled out, allowing providers 
the flexibility to adopt whatever strategies they determine will be 
most effective in achieving outcomes for those in need. In some cases, 
private investment provides upfront financing, taking on the risk that 
the intervention will not succeed and recovering the investment if it 
does.

Contracts designed to ``pay for success'' and emphasize outcomes have 
several advantages: (1) incentives are created for cost-effective 
interventions and thus programs have the flexibility to focus on the 
most effective strategies and emphasize prevention over remediation; 
(2) investments are supported that have longer-term social and 
financial benefit than those currently supported within the typical one 
year government budget cycle; (3) fewer resourcesare wasted on 
bureaucracy so more funds can go to program delivery rather than to 
compliance with rules and regulations; and finally, (4) government, and 
therefore taxpayers, only end up paying for effective programs that 
work.

Pay for Success gives governments the ability to support high-impact 
service providers; drive resources to effective social programs; and 
track outcomes, not just outputs, for individuals and communities. This 
structure helps government to effectively and efficiently provide 
services to those in need.

In some cases, an intervention may prove to reduce public costs. 
Sometimes these reduced costs can be used to repay private investors 
who funded the cost-saving intervention up front. When these public 
savings accrue to a single agency--e.g., the prison system for example, 
the savings can be captured and repurposed to repay this kind of 
investment. In other cases, these public savings may accrue to multiple 
agencies, making it more challenging to consolidate the funds and 
repurpose the savings to repay investors. And in still other instances, 
the public savings may not occur for many years--e.g., investments in 
education for youth that result in savings later in life--and thus not 
produce funding that can be used in the short term to repay investors. 
It is also the case that some interventions may not directly reduce 
public costs but instead are budget neutral while increasing the number 
of individuals served. In these instances, there is not a specific 
dollar figure that can be repurposed or reinvested by government but a 
noted increased efficiency in the utilization of public dollars. The 
ultimate efficiency benefit of a Pay for Success arrangement is not 
reducing budgets or cutting funds, but rather the more efficient use of 
public dollars to achieve better outcomes and measurably improve 
people's lives.

However, Pay for Success is also about effectiveness--moving public 
funding to interventions that build and use evidence to deliver 
results--this mechanism can be used to structure government contracting 
and funding in ways that incent these results, with or without private 
sector investment. For example, government can provide funding for the 
evaluation required to build the evidence base, and for performance 
management systems that enable organizations to use evidence in program 
implementation. Government can provide financial incentives--bonus 
payments and the like--when programs demonstrate better than average, 
measurable impact. Government can also incent the leveraging of private 
philanthropy to provide matching funds that cover these costs. Pay for 
Success has many important implications for retooling government's 
approach to tracking the allocation of funds from one focused primarily 
on outputs and within individual agencies to one tying funds to results 
impacting multiple agencies.

Federal policymakers can advance Pay for Success by creating incentives 
for federal agencies or state and local governments to test such 
models, providing funding for and encouraging technical assistance 
advisors to explore the feasibility of and create pathways towards 
potential Pay for Success transactions, and addressing data systems and 
privacy issues related to the evaluation of programs in Pay for 
Success. Shifting resources from unproductive programs to Pay for 
Success models that pay based on the achievement of outcomes will 
ultimately make taxpayer dollars more productive and improve the lives 
of those whom these programs are designed to help.

America Forward is encouraging the creation of an incentive fund at the 
federal level to expand the piloting and use of Pay for Success. 
America Forward has been working closely with the current 
Administration and key champions in Congress on a bipartisan, bicameral 
approach to create such a fund that could be used to structure Pay for 
Success projects and contracts, fund feasibility work, evaluation, and 
contribute to success payments. This legislation, known in the Senate 
as the Social Impact Partnership Act (S. 1089), was introduced in both 
the 113th and 114th Congresses by Committee Chairman Hatch and Senator 
Bennett. This legislation would provide funding to promote a variety of 
Pay for Success approaches and also test social innovation financing of 
Pay for Success strategies. In times of tighter budgets and greater 
demand for social services, we must work together to direct government 
resources to the most efficient programs that measurably improve 
people's lives. Pay for Success has the potential to incentivize more 
efficient use of government resources to reward what works, linking 
government dollars to positive outcomes, and leveraging those dollars 
to attract private capital into the social services sector.

The results from the first Pay for Success project in the U.S. at 
Riker's Island were much anticipated and particularly important not 
only for the young men being served by the intervention but to the 
overall Pay for Success movement. Last year, when the results from the 
project to that point were released, there was initial disappointment 
for those who are Pay for Success champions and who hoped for a better 
result for the young men in Riker's. Though the intervention lacked 
evaluative impact, and thus was discontinued and the Pay for Success 
project ended, the messaging around the results was helpful in 
articulating that ``success'' in Pay for Success means many things. 
Specifically, not only did the project end but the government did not 
pay out any money for the project given the lack of evaluative impact. 
The `'success'' here then is that the approach--to pay only if a 
successful outcome is achieved--is possible and can be effectively 
executed.

The announcement that followed from the second Pay for Success project 
in the U.S., the Utah High Quality Preschool Program, was very 
different from the announcement made regarding the Riker's project but 
no less significant. The headline of the United Way of Salt Lake press 
release perfectly sums up the results: ``Social Impact Bond for Early 
Childhood Education Shows Success.'' It was determined that 109 out of 
110 at-risk Utah students avoided special education services following 
access to high-quality preschool. This is a 99 percent success rate, 
which is incredibly impressive. These results are also incredibly high 
and may be called into question as a result. As those stakeholders in 
the Riker's Island Project did, the Utah Pay for Success community has 
been open to criticism and transparent about the evaluation design, 
process, and analysis of their effort. With each milestone in these 
projects, there is an opportunity for education and development of a 
deeper understanding of Pay for Success and those engaged in these 
projects need to support transparency from their development and 
resource the ability to share lessons learned.

At America Forward, we believe that Pay for Success has the potential 
to bridge the divide between the ``business as usual'' system--where we 
continue to provide the same services, in the same way, to address the 
same problems but with little to no accountability for achieving the 
desired results--to the future we want, where we are able to provide 
high-quality prevention services to ameliorate future remedial services 
such as special education, increase employment opportunities for those 
seeking second chances, and provide the opportunity for families to 
stay together and thrive without the need for government intervention 
or support. It is only by testing the approach to ``paying for 
success'' that we can determine how to really bridge this divide.

As the Committee considers legislation supporting Pay for Success, we 
urge that you consider the following principles:

      Enable providers to participate even if they have not previously 
been a major recipient of public funding. If opportunities are limited 
to existing providers, innovative organizations that offer better 
outcomes will be excluded.
      Be careful to identify a range of appropriate benchmarks rather 
than a single long-term outcome. Such benchmarks enable organizations 
to track their results and make adjustments as necessary.
      Ensure that consideration is given not only to the potential for 
cost savings or increased tax revenue through these arrangements but 
also to greater efficiency in the utilization of public dollars 
resulting in more individuals served using the same allocations, and to 
the potential for long-term impact across multiple government agencies.
      Include resources for a partnership with a credible technical 
assistance advisor. It is difficult for governments to work alone to 
support the education, feasibility analysis, and the financial modeling 
necessary to launch these initiatives. The technical assistance advisor 
should have a track record of exploring the feasibility of Pay for 
Success in different localities and in launching Pay for Success 
transactions.
      Develop systems that prevent providers from choosing only those 
clients who are easiest to serve, while also retaining flexibility for 
providers to serve multiple at-risk populations.
      Include a partnership with a credible research organization to 
conduct evaluations that most feasibly and appropriately measure the 
reform's impact on government spending and on participants' well-being 
(and any other key program goals).
      Create opportunities and funding for government agencies to 
learn from others' experiences and build the capacity of providers, 
technical assistance advisors, and intermediaries to participate in Pay 
for Success programs.
      All final Pay for Success documents are encouraged to be in an 
``open source'' format and should be posted on the internet/web 
platform.

Thank you for the opportunity to submit a Statement for the Record. 
America Forward would be happy to provide clarification of any of the 
points raised or provide any additional information you request. Please 
do not hesitate to contact Nicole Truhe, Government Affairs Director of 
America Forward at Nicole truhe@
newprofit.org if you would like to discuss these comments further.

Sincerely,

Nicole Truhe
Government Affairs Director, America Forward

                                 ______
                                 
              Campaign to End Obesity Action Fund (CEO-AF)

           1341 G Street, NW, 6th Floor, Washington, DC 20005

                        STATEMENT FOR THE RECORD

    ``Can Evidence-Based Practices Improve Outcomes for Vulnerable 
                      Individuals and Families?''

                              May 10, 2016

The Board, advisors, and supporters of the Campaign to End Obesity 
Action Fund (CEO-AF) appreciate the Senate Finance Committee's efforts 
to examine the role of outcomes and evidence standards in shaping 
social policies and how they can be best applied to program delivery 
and financing models. This approach to policymaking, alternately called 
``social impact financing,'' has the potential to leverage taxpayer 
dollars in a smarter, more efficient way. In this context, we urge the 
Committee to also consider tax policy approaches that increase access 
to resources that elude many Americans and that are proven to be an 
effective tool in the fight against America's obesity epidemic.

The CEO-AF is the largest non-partisan advocacy organization focused on 
changes in federal policy to prevent and treat obesity America. In its 
work, the CEO-AF convenes leaders from across industry, academia, 
patient, public health, and disease communities to speak with one voice 
for commonsense, consensus policy measures to reverse the epidemic and 
promote healthy weight in children and adults.

The Need for Policy

The need for federal policy measures to address obesity has never been 
more acute. By virtue of the sheer prevalence of the disease, as well 
as the direct health care costs associated with treating the 
individuals with obesity, the economic toll of the U.S. obesity \1\ 
epidemic threatens the viability of both our health care marketplace 
and our budget. Currently, nearly 100 million Americans have obesity. 
As a result, the Congressional Budget Office reported in 2010, nearly 
20 percent of the increase in U.S. health care spending is attributable 
to growing obesity rates. Today, spending (both direct and indirect) on 
care for individuals with obesity in the U.S. may exceed $275 billion 
annually.\2\ In addition, annual medical costs for individuals with 
obesity are $2,741 higher than they are for healthy weight 
individuals.\3\ Absent a reversal in the current obesity trend, experts 
project that 50 percent of Americans will have obesity by 2030, and 
this will increase medical and other costs to our nation by hundreds of 
billions of dollars every year. Taking steps to address this crisis 
simply cannot wait.
---------------------------------------------------------------------------
    \1\ The United States Center for Disease Control and Prevention 
defines obesity in adults as having a body mass index (BMI) of 30 or 
higher.
    \2\ Cawley, J., Meyerhoefer, C. The Medical Care Costs of Obesity: 
An Instrumental Variables Approach. Journal of Health Economics. 2012; 
31(1): 219-230.
    \3\ Cawley, J., Meyerhoefer, C. The Medical Care Costs of Obesity: 
An Instrumental Variables Approach. Journal of Health Economics. 2012; 
31(1): 219-230.
---------------------------------------------------------------------------

Access to Resources for At-Risk Communities

We know that for a large portion of the population, a key to combatting 
obesity is providing access to healthy, affordable, and culturally 
relevant foods as well as to recreation and fitness facilities. 
Unfortunately, individuals who live in both rural and urban, low-income 
communities often cannot access these resources safely or economically. 
It is in these same communities where we find disproportionately high 
rates of obesity and other associated conditions, including 
cardiovascular disease, stroke, Type II diabetes, and cancer.\4\ 
Initiatives that increase access to healthy living resources in these 
communities are shown to improve health outcomes, save money, and 
reduce obesity rates in these communities. For example:
---------------------------------------------------------------------------
    \4\ Ernst and Young. The New Markets Tax Credit: Opportunities for 
Investment in Health Foods and Physical Activity. Washington, DC: Ernst 
and Young; 2013.

      Studies show that decreasing the number of households that lack 
access to a vehicle and are located in ``food deserts \5\'' by 1 
percentage point results in a nearly 1 percentage point decrease in the 
obesity rate in that community. For an average county, that translates 
to 875 fewer individuals with obesity.
---------------------------------------------------------------------------
    \5\ According to the United States Department of Agriculture, a 
food desert is defined as an urban household more than 1 mile from the 
nearest supermarket and a rural household more than 10 miles from one.
---------------------------------------------------------------------------
      Data also suggests that increasing the number of recreation and 
fitness facilities from 1 per 10,000 people to 2 per 10,000 people 
would result in a 7 percent decrease in the obesity rate (from 29.8 
percent to 27.8 percent) in an average county, which translates to 
1,000 fewer individuals with obesity.\6\
---------------------------------------------------------------------------
    \6\ Ibid.
---------------------------------------------------------------------------
      When taken together, these modest changes could reduce one 
county's medical costs by over $5 million--yielding resources that 
could, in turn, be reinvested in those same communities.

The Role of Tax Policy

Historically, the federal government has used tax policies to support 
and incent desired social ends--such as home ownership, building 
retirement savings and charitable giving. In the same vein, the tax 
code can be an important policymaking tool to drive resources to 
efforts that will combat obesity and, in doing so, yield measurable net 
savings for American health and the U.S. economy. A critical place to 
begin is in traditionally underserved communities.

The idea of utilizing tax policy to improve living conditions and 
generate economic benefits is not foreign to Congress. Indeed, Congress 
enacted the New Markets Tax Credit (NMTC) in 2000 in order to encourage 
new and targeted investments in low-income communities. By lowering 
economic risk to developers and the finance sector, the credit has been 
profoundly impactful in generating new infrastructure in communities 
across the nation where needs for safe and dignified housing and 
amenities have been dire. The NMTC also had a halo effect in bolstering 
access to healthy-living resources for communities where these 
investments have occurred; between 2003 and 2010, the credit helped 
finance 49 supermarkets that improved access to healthy foods for more 
than 345,000 Americans, including 197,000 children.\7\
---------------------------------------------------------------------------
    \7\ Ernst and Young. The New Markets Tax Credit: Opportunities for 
Investment in Health Foods and Physical Activity. Washington, DC: Ernst 
and Young; 2013.

The NMTC's beneficial effects for the kind of healthy living needed to 
prevent and treat obesity, while laudable, are somewhat modest. This is 
hardly a flaw of that program, but rather a reminder that as a nation 
we lack similar policy more explicitly designed to address obesity that 
resides so disproportionately in the communities served by the NMTC. In 
fact, the success of the NMTC is a reminder that direct, intentional 
tax policies can and should be utilized to provide incentives for 
investment in communities that suffer disproportionately from obesity 
and whose children are most likely to grow up suffering from this 
---------------------------------------------------------------------------
disease and the many medical conditions it brings.

There are real and focused ways that tax policy can be used to achieve 
this aim, from modifications to the Low-Income Housing Credit that 
would encourage development projects to plan for areas for recreation 
and physical activity to expansion of the Work Opportunity Tax Credit 
to draw needed professionals into at-risk communities to engage 
families in healthy food choices and nutrition and exercise education. 
Congress can also use tax policy to incent an array of private 
interests to contribute infrastructure where it is most lacking and, in 
doing so, give communities safe and accessible soccer fields, jogging 
paths, and even gyms.

We know from the NMTC and many other tax programs that tax policy can 
drive social change. There is also substantial evidence that well-
targeted steps such as these to direct tax policy at this national 
health and economic crisis can produce the double benefit of improving 
health outcomes while simultaneously creating local and national 
savings associated with decreased rates of obesity. Data show that a 
population-wide reduction in body mass index (BMI) of just 5 percent 
could lead to more than $29 billion in health care savings in just 5 
years. The same study found that the country could save $158 billion 
over 10 years and $611 billion in 20 years with the same BMI reduction 
percentage.\8\
---------------------------------------------------------------------------
    \8\ Trust for America's Health. F as in Fat: How Obesity Threatens 
America's Future 2012. Washington, DC: Trust for America's Health; 
2012. Available at: http://healthyamericans.org/assets/files/
TFAH2012FasInFatFnlRv.pdf.

CEO-AF urges the Committee to seriously consider tax policy approaches 
such as those outlined above that can lower costs and provided targeted 
incentives to individuals, businesses, and investors that will result 
in increased access to healthy lifestyles for Americans living in low-
resource, low-income communities. There have been many studies that 
demonstrate the workability of these programs. The challenge now is to 
apply tax policy approaches to the programs that can be most effective, 
and in doing so, move the needle on obesity in America's most 
underprivileged communities. There is hardly an opportunity with 
---------------------------------------------------------------------------
benefits as potentially great as this.

We applaud the Senate Finance Committee's efforts to examine evidence-
based models that can help vulnerable families and at-risk individuals 
and we hope to work with the Committee and its leaders to further 
assess and advance tax policies to combat the obesity epidemic. We 
appreciate the opportunity to submit this statement for the record.

                                 ______
                                 
                 Center for the Study of Social Policy

1575 Eye Street, NW  Suite 500  Washington, DC 20005  p 202-371-1565

     50 Broadway  Suite 1504  New York, NY 10004  p 212-979-2369

                              www.cssp.org

  

                              May 10, 2016

          ``Can Evidence-Based Practices Improve Outcomes for 
                 Vulnerable Individuals and Families?''

The Center for the Study of Social Policy (CCSP) is pleased to provide 
a statement for the record on the May 10, 2016 Senate Finance Committee 
hearing ``Can 
Evidence-Based Practices Improve Outcomes for Vulnerable Individuals 
and Families?''

First, we thank the Committee for taking up this important discussion 
on the use of evidence-based practices in improving outcomes for 
vulnerable children and families involved in the child welfare system 
and we appreciate the opportunity to provide comment on this matter. 
With limited public and private resources and in order to best meet the 
needs of families and children, it is imperative that funds be invested 
in programs that credibly demonstrate a positive impact on child and 
family well-being and that robust evidence of success is used in 
developing new strategies for families facing multiple barriers. 
However, simply funding or designing programs based on currently 
available evidence is not sufficient to the task. Stable financing must 
be available to propel and support innovation in the development and 
implementation of preventative support programs for children and 
families with multiple and complex needs--especially if we are to make 
progress to improve well-being and address current challenges faced by 
families involved with child welfare systems. Programs must be 
implemented with a clear attention to measuring and understanding 
results, using that information to make well-conceived adaptations and 
mid-course corrections when programs fall short of achieving desired 
results and insuring that processes are in place for continuous 
learning and accountability to funders, taxpayers and service 
recipients.

The remainder of our statement will focus on suggested definitions, 
strategies and proposed areas of concentration based on our extensive 
experiences helping child welfare and other public human services 
systems improve their work and achieve improved outcomes for the 
children and families in their care as well as our leading role as the 
founding member of Friends of Evidence--a group of distinguished 
leaders across diverse fields, disciplines and sectors--concerned with 
the limitations of prevailing approaches to obtaining evidence and 
focused on defining and promoting more effective approaches. We 
specifically address (1) the need for an inclusive definition of 
evidence supported by multiple rigorous assessment and evaluation 
methods; (2) the need to support disciplined plans for rigorous 
learning and innovation through continuous quality improvement (CQI) 
processes; (3) attention to the impacts of evidence requirements on the 
necessity of funding programs to advance equity; and (4) making the 
best use of taxpayers' dollars by investing in innovations that support 
the needs of vulnerable populations.

A Comprehensive Definition of Evidence Supported by Multiple Rigorous 
Methods

CSSP recognizes that the use of evidence of effectiveness is important 
for both the selection and implementation of programs aimed at 
improving outcomes for vulnerable populations. The definition of what 
constitutes acceptable evidence is critically important. The recent 
federal budget included a statement from the Office of Budget and 
Management (OMB) that offers the following definition, ``Broadly 
speaking, `evidence' is the available body of facts or information 
indicating whether a belief or proposition is true or valid.'' OMB 
states that: ``The best government programs use a broad range of 
analytical and management tools, which collectively comprise an 
`evidence infrastructure' to learn what works (and what does not) for 
whom and under what circumstances, as well as improve results.'' We 
support this definition. Evidence is derived from several sources: 
program management and monitoring as well as formal evaluations that 
employ a range of data collection and analytical methods and research 
that has relevance to achieving desired results. In addition, the rigor 
and credibility of evidence is not established by a single evaluation 
method. It is determined by the use of multiple methods appropriately 
matched to what we want to learn and need to know.

Current reliance on Randomized Control Trials (RCTs) as the primary 
method for definitive evidence about ``what works'' can answer certain 
questions, but it does not answer all the questions decision-makers 
need to consider. The type of evidence acquired through an RCT may 
establish that a program has worked for some people, on average, in a 
particular context compared to those in a control group who did not 
receive the intervention. This however, is only a small part of the 
information a decision-maker would like to have in choosing whether to 
adopt and/or scale-up a program. In reality, what often works for one 
client or community may not work for another unless adaptations are 
made to account for variables such as culture, race or location. 
Decision-makers need the evidence to answer such questions as: ``Will 
it work here, in my context for my citizenry?'' and ``What is needed to 
make it work?'' Furthermore, most evaluation findings are rarely 
definitive, revealing mixed results that typically require additional 
testing and evaluation. Consequently, the questions of most interest to 
policymakers and of benefit to children and families can go unanswered 
when only relying on an RCT for answers. As a result of these issues, 
we believe that a more narrowly constructed definition of evidence, 
driven by a single methodology or data source, has the potential to 
stymie innovation, limit which programs can receive funding for 
implementation and may end up increasing programming costs as decision-
makers attempt to make an evidence-based program fit the problem they 
are addressing.\1\
---------------------------------------------------------------------------
    \1\ Schorr, L., Farrow, F., and Sparrow, J. (2014). An Evidence 
Framework to Improve Results. 2014 Harold Richman Public Policy 
Symposium: The Future of Evidence. Center for the Study of Social 
Policy. Available at http://www.cssp.org/policy/evidence/AN-EVIDENCE-
FRAMEWORK-TO-IMPROVE-RESULTS.pdf.

A Disciplined Plan for Learning, Accountability and Innovation Through 
---------------------------------------------------------------------------
a Rigorous Continuous Quality Improvement (CQI) Process

Generating evidence should not be left solely to outside evaluators, 
and timing of corrective action should not have to wait for or be 
dependent on an evaluator's final report. Initiative staff--at all 
organizational levels--play a critical role in generating reliable and 
valid evidence and ensuring implementation integrity in a timely 
manner. Innovation must be accompanied by an organizational focus on 
results and a commitment to learning what is working and what is not 
and using the learning to hold themselves accountable to funders and 
beneficiaries alike. The learning must be used to facilitate program 
redesign if necessary or identify additional necessary evidence for 
decision-making. This process, often referred to as Continuous Quality 
Improvement (CQI), is crucial to understanding what truly works for 
vulnerable groups and is an important process for improving programs, 
even those that are considered evidence-based.

As evidence-based programs are implemented with different populations, 
engagement in a rigorous CQI process becomes key to ensuring that the 
model is having the intended impact for children and families. CQI can 
ensure practice integrity when fidelity measures may not be appropriate 
or they have not yet been designed. A robust evidence generating 
infrastructure must include both CQI and external evaluation, yet 
creating this infrastructure often does not receive adequate attention 
of time and resources. Internal CQI capacity requires a culture of 
curiosity and many of the same analytical skills employed by external 
evaluators. While CQI is a discipline, it should not be a rote process 
installed to be compliant with a mandate. A robust approach to CQI 
requires measurement of both the quantity and the quality of services 
delivered, the impact of services on child and family outcomes and 
well-being and the effectiveness of processes and systems. For example, 
the New Jersey Department of Children and Families (DCF) implemented a 
competitive ``Data Fellows Program'' that provided 100 middle-
management DCF staff with the opportunity to utilize data to support 
improved case practice and outcomes for the children and families they 
serve in their areas or local offices all while developing skills in 
the areas of presenting information, for management and decision-
making, leadership, and team building.\2\ This program demonstrates the 
DCF's commitment to managing by data and using it as a catalyst for 
continuous quality improvement. While New Jersey took the initiative to 
invest in workforce capacity building, other organizations may need 
incentives and support to build the processes and staff capacities 
required by such a robust CQI process.
---------------------------------------------------------------------------
    \2\  Initial funding for this program came from the Children's 
Bureau through the Northeast and Caribbean Implementation Center.

Funding Innovation to Advance Equity

Existing funding streams often require strict adherence to program and 
practice protocols. Adaptations to a chosen model are typically not 
allowed if the intervention wants to receive continued funding and 
designation as an evidence-based program. However, this requirement may 
produce unintended inequities as a result of the population--including 
race, gender, and cultural characteristics--with whom the program was 
tested and impacts determined. Meeting the needs of those families 
facing the greatest barriers in any given community may require 
adaptions to the interventions that are specific to the populations 
being served. Moreover in some cases, the evidence-building evaluation 
was conducted over 20 years ago with a population with different 
characteristics and facing different challenges than those who would 
benefit from the program today. Consequently, if adaptation is not 
allowed, certain populations and communities may not be able to benefit 
from an evidence-based program. For example, because pregnant 
adolescents in foster care often do not disclose their pregnancy until 
their second or third trimester, they become ineligible for evidence-
based programs such as Nurse Family Partnerships that only enroll 
mothers in their first trimester. Yet these young women are in critical 
need of the knowledge and caring relationship a Nurse Family Partner 
can provide.

Paying for innovative programs or investing in adaptations of an 
evidence-based program for a new population--like a Nurse Family 
Partnership model for young women in foster care who disclose pregnancy 
after the first trimester--often requires large upfront costs, making 
them unattractive to legislators and policymakers. However, this is one 
example of an opportunity for investment and innovation that may be 
attractive to those in the private sector who could employ a Social 
Impact Financing (SIF) \3\ or Pay for Success strategy--which have been 
proposed as an alternative funding approach.
---------------------------------------------------------------------------
    \3\ Also referred to as Social Impact Bonds, Social Impact 
Partnerships, or Pay for Success.

In order for these funding strategies to have the desired impact of 
providing financial support for innovation and adaptation, it is 
critical to understand what government incentives will be used to 
attract private interest. In an effort to maximize investments, we urge 
the Committee to consider incentives that would support research, 
development, and evaluation that reflect a broader definition of 
evidence. Currently, the majority of SIF and Pay for Success models 
employ RCTs as the methodology for evaluation and verification of 
results achieved. While RCTs are one form of evaluation, there are 
benefits to utilizing different methodologies when testing a new 
approach. As previously mentioned, programs evaluated through a RCT 
generally have little ability to adapt during testing. By limiting the 
ability for such adaptation, the implementation is also risking a poor 
return on investment since any lessons learned cannot be applied during 
the course of the evaluation. In the private sector, investors do not 
expect fund managers to continue doing the same thing if they are 
losing money, or if it is shown they are not generating as much revenue 
as they could--the ability to adapt is critical. Lastly, from a cost 
benefit perspective, a broader range of methods can often produce 
credible evidence of initiative results carried out in a less costly 
manner than RCTs without compromising integrity.\4\ By supporting a 
broader range of evidence-building methods, investors would also have 
the opportunity for more timely innovation and adaptation in 
communities where families face multiple barriers.
---------------------------------------------------------------------------
    \4\ Olsen, L., Grossmann, C., and McGinnis, J.M. (2011). Learning 
What Works: Infrastructure Required for Comparative Effectiveness 
Research: Workshop Summary. Available at http://www.ncbi.nlm.nih.gov/
books/NBK64787/pdf/Bookshelf_NBK64787.pdf.

The Best Use of Taxpayers' Dollars Includes Investing in Innovations 
---------------------------------------------------------------------------
That Support the Needs of Vulnerable Populations

Credible evaluation methodologies that align meaningful solutions with 
problems and a comprehensive evidence generating infrastructure are the 
most responsible way to invest taxpayer dollars. This is particularly 
important when striving for positive outcomes for populations that are 
disproportionately impacted by child welfare systems and where an RCT 
alone may not be the definitive evaluation strategy. Choosing to rely 
solely on SIF or Pay for Success models to fund innovative strategies 
for these populations can disproportionately impact those facing the 
compounding effects of race, class, gender and sexual orientation as 
marginalized groups would be competing for funder interest. 
Additionally, it must be noted that since private investors, rather 
than the government, absorb the financial risk in a SIF or Pay for 
Success approach, reliance on this model to fund innovations could 
prove to be an unstable funding source--which is particularly 
problematic when families facing multiple barriers are precisely the 
families child welfare systems are aiming to serve.

We live in an ever more complex world and the challenges faced by our 
most vulnerable families are also growing more complex. Proven programs 
from 20 years ago are insufficient to meet today's challenges and to 
take advantage of today's knowledge. Continued adaptation and 
innovation is essential. But, these efforts must be disciplined and 
generate evidence that decision-makers can readily use to replicate 
success or infuse existing programs with new ideas. Using taxpayer 
dollars to invest in research, development, and rigorous evaluation 
using multiple methods is a good investment. A positive opportunity for 
federal investment is to support long term research-practice 
partnerships and technical assistance on the use of continuous 
improvement practices and the facilitation of partnerships with 
external evaluators.

CSSP commends the Senate Finance Committee for addressing this critical 
issue. We thank you for your continued commitment to improving the 
well-being of vulnerable populations coming into contact with the child 
welfare system.

If you have any questions, please don't hesitate to contact Megan 
Martin, (202) 371-1565; [email protected] and thank you in advance 
for consideration of our comments and recommendations.

                                 ______
                                 
                              Child Trends

                   7315 Wisconsin Avenue, Suite 1200W

                           Bethesda, MD 20814

                          www.childtrends.org

                 Statement of Carol C. Emig, President

          ``Can Evidence-Based Practices Improve Outcomes for 
                 Vulnerable Individuals and Families?''

                              May 10, 2016

Introduction

On behalf of Child Trends, a nonpartisan, nonprofit research 
organization focused exclusively on improving the lives and prospects 
of children, youth, and their families, we would like to extend our 
thanks to the Senate Committee on Finance for holding the hearing on 
May 10, 2016 on evidence based practices. We appreciate their attention 
to such an important issue and the opportunity to participate in that 
conversation.

We applaud the recent efforts of the Congress in recognizing and 
supporting 
evidence-based work to improve child well-being through legislation 
such as the Every Student Succeeds Act, the Investing in Innovation 
Fund (i3), and H.R. 5170 currently in mark up. Child Trends brings 37 
years of experience conducting research about children, families, and 
the programs that serve them. A major component of our work involves 
building an evidence base around ``what works'' for our most vulnerable 
children and families. With this experience, we are grateful for the 
chance to describe the powerful role that an evidence base can play in 
improving outcomes for children and families, and share some of the 
lessons we've learned through our own experience evaluating programs 
and services.

Building the Evidence Base is Valuable, Important Work

The hearing on May 10, 2016, explored the question: ``Can Evidence-
Based Practices Improve Outcomes for Vulnerable Individuals and 
Families?'' As researchers and evaluators, we wholeheartedly answer 
``yes.''

Child Trends' own What Works database houses data on nearly 800 
programs that have had at least one randomized, intent-to-treat 
evaluation to assess child or youth outcomes related to education, life 
skills, and social/emotional, mental, physical, behavioral, or 
reproductive health. Importantly, this database includes programs that 
do no work, as well as those with positive impacts. In addition to a 
searchable catalogue of programs, we have written numerous ``What 
Works'' syntheses--on various populations--summarizing what the 
evidence base can teach us about ``what works'' for populations (such 
as Latino or black children and adolescents, and older youth); for 
program outcomes (such as reducing problem behaviors in early childhood 
and preventing bullying); and for program approach (such as mentoring 
and home visiting).

Another example springs from the work of the Teen Pregnancy Prevention 
Program (TPP) administered by the Office of Adolescent Health (OAH). 
OAH houses a searchable database of three dozen evidence based TPP 
programs--all of which have had at least one program evaluation and 
have shown a positive impact on preventing teen pregnancies, sexually 
transmitted infections, or sexual risk behaviors. The two-tiered grant 
program provides funds for grantees who replicate evidence-based models 
and additional evaluations, as well as grants to develop and test new 
and innovative strategies to prevent teen pregnancy.

We also work closely with several child welfare agencies, evaluating 
work funded through Diligent Recruitment Grants, awarded by the 
Children's Bureau. As the evaluator, we learned valuable lessons about 
``what works'' for children and families who came into contact with the 
child welfare system, specifically around strategies to support foster 
families in their critical, yet challenging work.

However, as enthusiastically as we stand behind the need to build and 
strengthen the evidence base, we also believe it is important to share 
four cautions with you today. We hope that these inform your work as 
you promote and mark up legislation like H.R. 5170 and the Families 
First Act.

    (1)  Although rigorous evaluations are powerful tools in the 
evidence toolbox, becoming an evidence-based practice is a process.

As shown in the figure below, Child Trends views the process of 
becoming an 
evidence-based program as a critical, albeit under-appreciated, effort 
that requires several years of investment. The process begins with a 
needs assessment to identify the issues faced by a community; and the 
information from this assessment should then inform identification of 
the population that will be the focus of intervention efforts. Next it 
is critical to identify the intervention program or services, to 
develop a theory of change, and to formulate a logic model that 
specifies the intended inputs, outputs, and outcomes.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


Having completed these steps with staff, board, and stakeholders, a 
performance management system can be developed so that program inputs, 
outputs, and outcomes can be tracked and reported. The goal is to 
improve the program and confirm that it is achieving its intended 
outcomes before engaging in a formal evaluation. Performance management 
is the evaluation ``workhorse'' and, as such, it is crucial to give it 
sufficient time and attention to make sure that the goals of the 
intervention are being met. Once that is assured, it may be time to 
conduct a formal evaluation--the race horse. Either a quasi-
experimental evaluation or a random-
assignment evaluation may be appropriate; but, in either case, it is 
also critical to conduct an implementation evaluation. And it is 
essential to continue performance management work throughout the life 
of the intervention.

Recommendations

    -  Recognize and support programs and practices that are at other 
stages of the evidence-based continuum, and not limit support to 
randomized-controlled trials (RCTs).
    -  Encourage and support programs and services to develop and use 
strong performance management techniques to promote continuous quality 
improvement in their work. Using regular data analysis and review can 
help programs not ready for a rigorous evaluation still understand 
pieces of ``what works'' for their clients.

    (2)  Protect against potential unintended consequences of building 
an evidence base.

In our role as evaluators and research partners to agencies, programs, 
and initiatives that support children and families, we've spent a great 
deal of time working closely with the people who implement programs and 
interventions. With that experience, we've learned that a close tie 
between evaluation results and funding streams can raise fears and 
stifle innovation. This type of reaction runs counter to the goals of 
initiatives like ``Pay for Success,'' which aim to open the field to 
new ideas and creative problem solving.

We believe that the tiered approaches of Home Visiting and TPP can 
continue to motivate the field to try new approaches. As described 
above, through the TPP grants, the Office of Adolescent Health provides 
funds to both programs that are replicating evidence-based strategies 
and those who are testing new innovative strategies in communities with 
high teen birth rates. Those grantees working on innovative strategies 
also receive technical assistance from other federal agencies.

Recommendations

    -  Continue to support a tiered approach towards supporting 
programs both implementing evidence-based practices and programs using 
research to inform new strategies that may be promising.
    -  When working with programs and agencies, generate excitement 
over possibilities in growing our understanding of ``what works'' and 
creating stronger and better programs, rather than focusing the 
conversation on cutting programs that may be struggling. Ensure that 
technical assistance is available to help those programs do better.

    (3)  Challenges can arise in sharing the messages from evaluations 
broadly.

As the federal government and states move forward with a stronger 
emphasis on using evidence-based program and practices, we need to 
prioritize sharing ``what works'' with decisionmakers at all levels. 
Policymakers, state agency leaders, and program staff need to know 
``what works'' for their target populations and under what 
circumstances. Perhaps even more valuable, leaders need to be aware of 
what we don't know yet, so they can bring a full understanding of 
potential solutions as they approach challenges within their 
communities. In times when states and localities face fiscal 
challenges, it is particularly important that information about ``what 
works'' is shared with all stakeholders.

Although an important goal, we know that evidence can sometimes be 
buried. Generally, researchers and academics are incentivized to write 
for other researchers, in peer-reviewed articles. Such articles are not 
easy for laypeople to locate or access, and may be too technical to fit 
the needs of local stakeholders. Findings, implications, and 
limitations need to be clearly described in ways that are useful to 
state and local decisionmakers and program implementers.

Researchers who have conducted evaluations that have null or negative 
findings, and the programs that were evaluated, may be unwilling to 
share those findings with a broader audience. But much can be learned 
from what doesn't work--and that evidence should be shared widely to 
prevent other programs from making the same mistakes.

Recommendations

    -  Encourage and fund researchers to share their findings widely, 
through dissemination channels beyond peer-reviewed articles and 
researcher conferences.
    -  Help with the translation of research into plain language for 
communication to the various stakeholder groups of interest, and 
contextualize the findings. The message around ``what works'' in an 
educational setting may be different for a policymaker than for a 
teacher.

    (4)  Support broad implementation of successful strategies and 
programs.

In the same way that our work does not begin with a rigorous 
evaluation, it does not end with one. To ensure that a program achieves 
the intended results--also known as fidelity--work must be done around 
implementation. We work closely with programs that serve children, 
youth, and families, helping them improve their quality and achieve 
their intended outcomes. We also support their use of data to better 
understand what is working, or not working, for them.

In addition to being an important piece of the research arrow, it's 
also an important component of this policy conversation. Legislation or 
regulations that promote or require the use of evidence-based programs 
or practices operate under an assumption that those programs and 
practices lead to positive outcomes for individuals. However, if 
improperly implemented, the positive outcomes may be altered or, worse 
yet, may result in negative outcomes.

Recommendations

    -  In legislation and funding, recognize that the work isn't over 
when rigorous evaluations are conducted and positive outcomes are 
achieved. Fidelity of implementation needs to be monitored. Also, 
replication is important, because a program that works in one community 
may not achieve the same results in another setting.
    -  Support new programs as they implement evidence-based practices 
and existing programs as they begin to scale up by facilitating 
technical assistance and supporting additional evaluation as needed.

Final Comments

We appreciate the Committee's important work to bring attention to 
building the evidence base for the programs and practices that support 
our country's most vulnerable children and families, We would be happy 
to provide the Committee with further research and analysis should 
there be a need.

                                 ______
                                 
                Corporation for Supportive Housing (CSH)

                       Testimony by Andy McMahon 
         Managing Director of Government Affairs and Innovation

                          Contact: Eva Wingren

                      Phone: 202-715-3985 ext. 70

                       Email: [email protected]

CSH's mission is to advance solutions that use housing as a platform 
for services to improve the lives of the most vulnerable people, 
maximize public resources and build healthy communities. We provide 
financing, technical assistance and consulting, and policy leadership 
at the local, state, and national levels to incorporate evidence based 
and promising practices into investments in affordable and supportive 
housing.

Over the last several years, CSH has pioneered effective strategies for 
addressing the needs of families with high needs and complex child 
welfare cases by aligning the affordable housing and child welfare 
systems. We are working extensively with the Administration for 
Children, Youth, and Families, as well as child welfare systems across 
the country, to move towards a model that keeps families together. We 
appreciate the opportunity to share the lessons we have learned from 
this work and hope that you will include them in legislation around the 
use of evidence based practices and social impact financing to address 
the needs of vulnerable individuals and families.

Additionally, CSH sees Pay for Success (PFS) as a promising and 
important tool for the creation of supportive housing targeted to 
vulnerable populations. CSH is involved in more than 14 social impact 
investments at various stages of completion. We play a variety of 
roles, including feasibility technical assistance provider, transaction 
structurer, investor and project manager. CSH is uniquely positioned to 
support government and social impact investors in executing social 
impact investment partnerships, given our deep expertise designing, 
implementing and evaluating initiatives across the country aimed at 
addressing the needs of these target populations coupled with our role 
as a community development financial institution.

With this background, we respectfully offer our reflections and 
recommendations as the Committee explores opportunities for employing 
evidence-based practices to improve outcomes for vulnerable individuals 
and families.

Pay for Success

Federal investment in PFS structures has the potential to greatly 
increase the scale at which these investments can be made. PFS projects 
that facilitate systems change and program development currently 
typically require additional funding for the setup, intermediary, and 
evaluation work required.

CSH is an awardee of the Social Innovation Fund's Pay for Success 
initiative through the Corporation for National and Community Service 
(CNCS). To date we have selected 10 communities through 2 rounds of 
competition where we are working to determine the feasibility of PFS as 
a tool to scale supportive housing for vulnerable populations. This 
work includes using data to define the target population for a 
potential PFS transaction, conducting cost benefit analysis to 
understand potential cost avoidance and value creation if members of 
the target population gained access to supportive housing, working with 
stakeholders to define project outcomes and success, and solidifying 
commitments from key partners such as end payers who would make 
payments based on success.

In our most recent round of competition, we selected three communities 
that are focusing their PFS exploration on populations of persons who 
are super utilizers of health care, criminal justice, or other crisis 
resources. In communities across the country, there is a cohort of 
people who cycle between emergency rooms, hospitals, jails, detox 
facilities and homeless shelters, at enormous expense to these systems. 
We also selected the Oklahoma State Department of Mental Health and 
Substance Abuse Services (ODMHSAS) as a recipient of technical 
assistance focused on determining the feasibility of a PFS project 
focused on creating supportive housing for young adults (18-25) with 
mental health, substance use, or co-occurring disorders, lacking stable 
housing or experiencing homelessness or chronic homelessness. The 
project in Oklahoma will place a special emphasis on youth 
transitioning out of foster care and/or the juvenile justice system.

We also see great potential for PFS to pair well with a target 
population of families with high utilization of the child welfare 
systems and histories of homelessness. The PFS model offers an 
opportunity to create supportive housing for families, helping them 
gain stability, increase family functioning, and improve child and 
adult well-being, across a range of outcome areas and measures. Federal 
funding to kick-start PFS projects would have a tremendous impact on 
further developing the potential of PFS as a tool to improve outcomes 
for families and youth.

Social Innovation Fund funding has always been highly competitive, and 
CSH received more than 60 applications in our two rounds of competition 
to date. We are confident that the competitive nature of the funding 
proposed by Congress will drive high quality projects that address 
critical social issues, including improving outcomes for vulnerable 
families.

In addition to advancing the PFS industry, the federal government could 
also use PFS is the opportunity to capture federal savings. Effective 
models exist for repurposing federal expenditures on programs used by 
low income people to achieve better outcomes. Supportive housing is an 
evidence based intervention that saves money in the health care, 
criminal justice, and emergency homelessness systems--and we are 
exploring the extent of possible savings in child welfare, education, 
and other programs that target vulnerable families.

CSH's Focus on Vulnerable Families

Supportive housing harnesses the resources of multiple public agencies 
and service providers to offer whole-family care, healing parents and 
children to create a safer environment so they can stay together and 
thrive in their own home.

Homeless families who frequently encounter the child welfare system are 
one of our target groups for PFS projects because of the poor outcomes 
for the adults and children in these families and the high costs they 
incur to multiple systems. In fact, expenditures associated with these 
families are seven times those associated with non-frequently-
encountered families (Loman and Siegel, 2006). Costs associated with 
child maltreatment are extensive and impact nearly every social service 
sector from child welfare to health care to the criminal justice 
system. According to a report by Prevent Child Abuse America (2008) the 
direct costs associated with families who are involved in the child 
welfare system is staggering: $33.1 billon per year. The largest cost 
associated with these families is the child welfare system at $25.4 
billion/year. Other direct costs include hospitalization/treatment of 
injuries ($6.6 billion) and mental health care ($1.1 million). Law 
enforcement intervention is estimated at $33.3 million per year.

The needs of this subset of families and children are longer term and 
require an intervention that is focused on acquiring new skills that 
allow them to manage their chronic challenges like any chronic health 
challenge. The costs to children in these families are too great to 
continue to rely on overburdened systems and short term solutions. By 
creating the housing assistance, resources, and supports needed for 
parents and children to grow together in safe, stable homes, we are 
reducing the need for child welfare system expenditures. We are 
building strong and compelling evidence of supportive housing's 
potential as a cost-effective tool for improving family and child 
outcomes while addressing avoidable family separations and child 
removals.

In many circumstances families staying together means better lives for 
children, whereas forced separation and foster care placement can have 
devastating consequences. Although limited national data exists 
regarding the overlap between family homelessness and involvement with 
the child welfare system, many studies have shown a link between the 
two. A study found that as many as 49% of the sample of children in 
foster care in one California county were removed from homeless or 
unstably housed parents (Zlotnick, Kronstadt, and Klee, 1998). Research 
by Partners for Our Children in Washington State indicates that 37% of 
the families with a child who experienced an out-of-home placement were 
homeless in the 12 months prior to the loss of custody (Courtney, 
2010). In addition, child welfare involvement is highly predictive of 
homelessness in adulthood; 40% of adults experiencing homelessness 
indicate they were once in foster care.

The U.S. Department of Health and Human Services Administration for 
Children Youth and Families (ACYF) bolstered by promising results from 
CSH's Keeping Families Together (KFT) and other supportive housing 
initiatives (Swann-Jackson, 2010), assembled a $35 million 5-year 
public-private partnership with four philanthropic organizations to 
evaluate the impact of KFT-modeled supportive housing initiatives in 
five communities. This demonstration represents the first federal 
investment specifically focused on reducing child welfare system 
involvement by supporting the whole family with affordable housing and 
tailored services. It reflects our beliefs that supportive housing 
holds tremendous promise for breaking the cycle of homelessness, 
parental behavioral health challenges, child neglect, and child removal 
among the highest-need families. Supportive housing has the potential 
to change the life trajectory of vulnerable children.

The five federal grantees in the demonstration are located in Broward 
County, FL; Cedar Rapids, IA; Memphis, TN; San Francisco, CA; and the 
State of Connecticut and together are striving to provide supportive 
housing to more than 400 families with children at risk of, or already 
in, foster care placement.

Three years into the 5-year demonstration, we are seeing results that 
indicate supportive housing is making a real difference in the lives of 
vulnerable, fragile families. Here is some of what we know so far:

      Sites have successfully housed over 300 families.
      Families are staying housed with high rates of housing 
stability--roughly 91%. Housing stability has been a key success metric 
in all other PFS supportive housing transactions to date.
      Anecdotally, we know that there have been high rates of family 
reunification and foster care avoidance.

The Urban Institute is conducting a Randomized Control Trial (RCT) 
across sites. Specifically, their research study is accessing child 
welfare and homeless system administrative and survey data to examine 
the following:

      Targeting and Prediction Model: How is supportive housing being 
targeted in each site to the highest-need families? How can 
practitioners use quantitative predictors in assessment tools to better 
target and prioritize high-need families? How do we gather high quality 
data from child welfare and homeless system administrative data, 
referral forms and the family survey?
      Process and Implementation Study: What are the basic housing and 
services components of the program model and how do these differ across 
sites? Has the program been implemented according to each site's plan? 
What are the major implementation challenges? Does supportive housing 
lead to improved, sustainable coordination between the child welfare 
agency and public housing agency/homeless service agency? How do 
programs and partnerships change over time? Annual or semiannual site 
visits and key informant interviews, review of local evaluation process 
studies
      Impact Analysis: What impact does the program model have on 
housing stability, parenting skills, family stability, parent and child 
well-being, and child welfare involvement? Child welfare and homeless 
system administrative data, family survey data
      Cost Study: What is the cost-benefit across different systems 
and to society?

Other places are financing family supportive housing in unique ways, 
including social impact investments. We worked with New Jersey and New 
Mexico to re-direct TANF, child welfare, and other state dollars to 
family supportive housing. Cuyahoga County, Ohio is using a similar 
model in a Pay for Success transaction.

Promising Practices

We are actively working with the Departments of Housing and Urban 
Development and Health and Human Services to create robust guidance 
explaining how to use existing dollars in such investments. Actions 
such as coordinating data across systems and removing elective 
screening criteria from housing resources will remove barriers to 
future PFS replication. Guidance will help governments integrate 
successful PFS projects into their regular budgets after the investment 
period.

Through our work, systems-level partnerships and strategies are 
emerging to better coordinate and serve vulnerable families with 
complex needs. We recommend that PFS transactions dealing with 
vulnerable families keep these lessons in mind when structuring their 
programs.

      Use of cross-systems data to target families most in need: 
Limited data exists regarding the links between family homelessness and 
involvement with the child welfare system. To make the best use of 
limited resources, sites needed to create data collection processes 
that used cross-system data to develop a profile of those most in need 
of supportive housing and then target them accordingly.
      Establishing multi-agency teams to coordinate services to 
families: Stabilizing the most vulnerable families requires tailored 
access to services as identified by the families themselves. This could 
involve a variety of partners, from the landlord to a behavioral health 
counselor to the family's own support network. The demonstration sites 
are utilizing a family-engagement approach to meet families where they 
are at, and to coordinate the family and multiple service partners to 
achieve the goals identified by child welfare case plans and the 
family.
      Creative housing partnerships: Working partnerships between 
state and local housing agencies, such as Public Housing Authorities, 
and local child welfare agencies have been strengthened and are 
critical to our success so far. Several sites have changed their PHA 
administrative plans to remove barriers for high need families. Housing 
subsidies are an allowed use of PFS funds, but PFS is typically only 
part of the overall budget, so other housing subsidies are needed.
      Adopting a Housing First lens: Housing First is an approach to 
quickly and successfully connect families experiencing homelessness to 
permanent housing without preconditions and barriers to entry, such as 
sobriety, treatment or service participation requirements. Supportive 
services are offered to maximize housing stability and prevent returns 
to homelessness as opposed to addressing predetermined treatment goals 
prior to permanent housing entry. Housing First models have been highly 
effective in ending homelessness and addressing high service needs. In 
a child welfare context, housing stability should be the first step in 
reunification, not the last step.

Recommendations to the Committee

Based on our experience with PFS and with vulnerable populations, we 
recommend that the Committee include the following elements in social 
investment legislation:

      Fund applicants to work with state and federal partners to build 
the data systems necessary to support better performance management and 
evidence building. The availability of data has been critical to the 
success of all of our PFS initiatives so far, particularly high quality 
data from multiple systems that is cross-referenced to identify high 
users of systems, understand their needs, and measure progress in 
serving them.

      Make sure that PFS projects are serving the most vulnerable 
households. PFS is such a powerful tool for solving complex social 
problems because the most vulnerable households are often also the 
highest users of services and therefore have the most potential for 
savings. However, such households may face complex challenges that make 
achieving specified outcomes more difficult, so applicants may 
experience resistance to serving high need households. The Committee 
should request PFS evaluations to include an assessment of the 
participant selection criteria and fidelity to the model.

      Make the evidence based standard be achievable and relevant to 
the intervention. As stated by several of the panelists in the hearing, 
the insights into what works to address social problems should not come 
solely from PFS but should also be paired with a robust federal 
research agenda. The goals of PFS and the goals of a research agenda 
are not always aligned, since typically payback is tied to one or two 
of the many possible relevant outcome measures. A base level of 
research is frequently required in order to attract PFS investors. 
Conversely, at some point the evidence base will be established and 
there will be diminishing returns on investments in rigorous 
evaluation. The Committee should strive to balance developing new 
approaches, testing promising programs at some scale, and expanding 
programs with the strongest evidence. They should also require high 
quality outcome measures that are appropriate to the project and 
actually measure success.

      Consider projects that might otherwise offer valuable and 
readily quantifiable returns to participants and society at large in 
addition to those that produce cashable government savings. This 
includes considering allowing for value that might accrue over a longer 
timeframe than the typical PFS transaction length of 5-7 years. CSH 
also recommends considering approaches that monetize social benefits. 
CSH is also interested in quantifying the generational impacts of 
avoiding family homelessness. The legislation should also allow for the 
consideration and testing of alternative funding models when PFS 
financing does not appear to be feasible or the best way to implement 
an intervention in a given community.

      Scale up PFS by building on previous deal structures, while also 
allowing for specific initiatives to adapt its model to best fit the 
needs of a particular target population and community. As several 
panelists stated, broad latitude to partners allows the private market 
aspects of PFS to work, while still insisting on rigorous evidence and 
payment terms that are fair to both taxpayers and investors. CSH is 
experienced with providing technical assistance using a cohort model, 
where numerous places were tackling the same problem. While the cohort 
offered valuable opportunities for learning from others' challenges, 
the experience also illustrated that tailoring deals to the local 
context is critical for their success.

      Make sure that federal partners are engaged in defining the 
relevant federal savings. The value of the proposed legislation is that 
for the first time federal funds can be used to support project costs--
essentially allowing the Treasury Department to be a financing party in 
SIB deals, providing dollars to state and local entities so that they 
may in turn pay back investors if an initiative is found to be 
effective by a rigorous third-party evaluation. CSH recommends that the 
Committee charge the relevant federal agencies with defining areas of 
federal savings upfront, so that potential projects can evaluate 
federal payments as a revenue stream going forward.

      Incorporate successful PFS projects into the relevant ongoing 
federal agency budgets by directly investing in scaling and sustaining 
proven interventions. PFS transactions are complex and have associated 
costs. Once the evidence base is established, there is a diminishing 
return on further investments in research and evaluation. Moreover, as 
a program gets refined to the point where it is no longer significantly 
risky, it makes more sense to be provided at scale by government rather 
than paying a risk premium to investors.

Conclusion

Having been an integral part of the development of the Pay for Success 
industry, CSH applauds the Finance Committee for lifting it up as a 
promising tool. In this limited funding environment, the Pay for 
Success model offers a win-win way to get better outcomes from public 
expenditures. We look forward to working together to support more child 
welfare and supportive housing partnerships in the future.

References

Courtney, M. (2010). What are we learning from the SBC evaluation? 
Presentation for House Early Learning and Children's Services 
Committee. Accessed at http://www.partnersforourchildren.org/pocweb/
userfiles/Mark%20SBC%20jan%2014%20
leg%20presentation.pdf.

Loman, L.A., and Siegel, G.L. (2006). Minnesota Alternative Response 
Evaluation: Final Report. St. Louis, MO: Institute of Applied Research.

Prevent Child Abuse America (2008). Research Spotlight on Success: 
Healthy Families America Promotes Child Health and Development. 
Available online at: http://www.healthyfamiliesamerica.org/downloads/
HFA_Developement08.pdf.

Swann-Jackson, R., Tapper, D., and Fields, A. (2010). Keeping Families 
Together: An Evaluation of the Implementation and Outcomes of a Pilot 
Supportive Housing Model for Families Involved in the Child Welfare 
System. New York: Metis Associates.

Zlotnick, C., Kronstadt, D., and Klee, L. (1998). ``Foster care 
children and family homelessness.'' American Journal of Public Health, 
88: 1368-1370.

                                 ______
                                 
                      Institute for Child Success

                102 Edinburgh Ct., Greenville, SC 29607

               https://www.instituteforchildsuccess.org/

               Comments for the Record by Bryan Boroughs 
          General Counsel and Director of Legislative Affairs

Introduction

The Institute for Child Success is excited by the continuing progress 
in Congress regarding Pay for Success financing models (sometimes 
called Social Impact Bonds) that can advance the well-being of young 
children and their families. We thank Chairman Hatch for holding this 
hearing, and both the Chairman and Senator Bennet for their leadership 
on S. 1089.

The Institute for Child Success respectfully submits the following 
written comments to the hearing record for your consideration. In these 
comments, we begin with an overview of our perspective on the benefits 
of Pay for Success financing. We then discuss the substantial benefits 
of federal involvement, the reasons that legislation is necessary for 
meaningful federal engagement, and the ways in which S. 1089 responds 
to that need.

Though both this hearing and S. 1089 deal with a broader array of Pay 
for Success or Pay for Performance tools, and the Institute for Child 
Success is generally supportive of those tools, we limit our comments 
here to the model that is sometimes called ``Social Impact Bonds'' or 
Pay for Success Financing.

Benefits of Pay for Success Financing (or, Social Impact Bonds)

Pay for Success financing is a model that can help effective 
interventions scale up to improve outcomes for young children and their 
families, while reducing or eliminating financial risks to the 
taxpayers. The fundamental structure is well known to many, so we will 
only provide a very brief overview here. That most basic theoretical 
structure involves four pieces:

      An intervention that has been tested, and has demonstrated that 
it reliably produces outcomes;

      Investors who provide the upfront capital required to bring the 
intervention up to a larger scale;

      A government entity that is interested in paying for those 
outcomes--sometimes using funds saved as a result of those outcomes--if 
the agreed-upon success measures are achieved; and

      An independent evaluator that determines whether the 
intervention accomplishes the predetermined measures of success and, 
therefore, the government should repay the investor.

Because of the relative novelty and complexity of these projects, a 
third-party intermediary has also been involved in many of the Pay for 
Success contracts entered into to date.

Pay for Success financing provides a number of benefits over 
traditional government mechanisms for selecting and scaling up 
interventions, including:

      It allows governments to shift resources towards effective 
prevention and early intervention;

      It draws on expertise and energy from outside investors, who 
bear much or all of the financial risk if a program is ultimately not 
as effective as expected;

      A rigorous cost and benefit analysis is necessary to even 
consider a Pay for Success arrangement, increasing the ability of the 
government to invest wisely;

      Outcome tracking is a centerpiece at every step, allowing the 
necessary tracking processes to be ``baked in'' to an intervention from 
the very beginning; and

      While Pay for Success does not privatize critical government 
services (such as remedial education, criminal justice, or the like), 
it does hold the potential to reduce the overloaded demand on many of 
those services, allowing them to better fulfill their missions.

Pay for Success and Effective Early Childhood Interventions

As we discussed in our 2014 brief on this topic, Pay for Success is 
particularly well suited to help scale effective early childhood 
interventions.\1\ Many interventions exist today with long-term 
outcomes that are independently compelling, create significant value 
for governmental entities, and produce outcomes that advance priorities 
outlined in S. 1089. Those outcomes include:
---------------------------------------------------------------------------
    \1\ Institute for Child Success. Pay for Success Financing for 
Early Childhood Programs: A Path Forward. 2014. Available at: http://
www.instituteforchildsuccess.org/mydocuments/pay_ for_
success_ financing_ for_early_childhood_ program2.pdf.

---------------------------------------------------------------------------
      More economically independent mothers,

      Reduced incarceration rates,

      Fewer teen pregnancies,

      Fewer closely spaced second births and fewer preterm second 
births,

      Fewer injury-related visits to the emergency room,

      Reductions in child maltreatment,

      Less youth crime,

      Higher achievement in school or careers, and

      Increased lifetime earnings.

Yet despite wide agreement that we should develop and implement these 
effective early childhood interventions broadly, it is very challenging 
to do so. Many governmental agencies are working to implement effective 
early childhood interventions, but those efforts are far from full-
scale. Two barriers stand out:

    (1)  Resources are tied up in responding to problems, leaving 
little room for prevention. Governments are busy putting out fires--
that is, responding to problems after they happen--and after more cost-
effective responses are no longer an option. Given the fiscal and 
political pressure faced by all governmental entities, government is 
rarely able to devote sufficient up-front resources to developing or 
implementing effective methods to prevent problems in the first place, 
even if those approaches would save money in the long run. For 
instance, the Institute of Medicine has documented the costs of failing 
to focus on prevention, finding that many mental, emotional, and 
behavioral disorders in young people are preventable, but that 
prevention remains underfunded.\2\
---------------------------------------------------------------------------
    \2\ National Research Council (U.S.) and Institute of Medicine 
(U.S.) Committee on the Prevention of Mental Disorders and Substance 
Abuse Among Children, Youth, and Young Adults. Preventing Mental, 
Emotional, and Behavioral Disorders Among Young People: Progress and 
Possibilities. 2009. Available at http://www.ncbi.nlm.nih.gov/books/
NBK32775/.

    (2)  The costs of wide-scale implementation are immediate, but the 
payback takes time. Although many programs will deliver both social and 
financial returns, those benefits take time. Governments often find it 
---------------------------------------------------------------------------
difficult to afford investments with delayed returns.

Pay for Success can help address both of those barriers. Governments 
are able to implement tested interventions without immediately 
burdening the budget, since the model allows governments to wait until 
the relevant outcomes are met before payments must be made. If those 
interventions are ultimately effective at scale, then any resulting 
cost-savings can be used to help repay the investors' principal and any 
premium that is agreed to at the outset. Moreover, if the interventions 
do not produce the agreed-upon outcomes, then the government does not 
have to pay.

Why Does the Federal Government Need to Get Involved?

One of the questions that often arises in discussions about Pay for 
Success is this: Why is it important for the federal government to get 
involved? The simple answer is that many effective interventions 
produce positive results and save money at both the federal and state 
or local levels, and--for many of those--the federal government has a 
significant interest. For example, some two-generation early childhood 
interventions result in the improved birth spacing and more 
economically self-
sufficient mothers, and therefore reduce dependency on a range of 
entitlement programs including Medicaid and TANF. Congress should, 
therefore, position federal programs to foster and leverage those 
outcomes. If it does so as structured in S. 1089, both states and the 
federal government will benefit.

In addition, the federal attention and support for outcome-based 
payments will incentivize jurisdictions around the country to increase 
accountability for outcomes in government programs. Identifying the 
most effective programs and tracking their outcomes requires capacity 
and effort. This legislation will support and incentivize jurisdictions 
to build that capacity. The result will be more cost effective 
government investments and better outcomes for our communities and our 
country.

Why Do We Need Legislative Action to Support Pay for Success?

The typical appropriations process presents two significant barriers 
that prevent agencies from engaging in meaningful Pay for Success 
deals, both of which are addressed by S. 1089. First, federal 
appropriations typically have to be ``obligated'' by September 30 of 
any given fiscal year. What we've learned over the last few years is 
that many of these deals take more than one year to develop to the 
contract-
signing phase. Knowing that the money may evaporate after months of 
diligent work, but before a deal is finalized, is a substantial hurdle.

Second, federally appropriated dollars typically have to be disbursed 
within 5-years after the fiscal year in which they are appropriated 
(under 31 U.S.C. 1552(a)). Many Pay for Success contracts are best 
suited to something a little longer than a 5-year window, if only 
because most programs take a couple of years to reach scale, and long-
term outcomes may take several years to be fully measured after that. 
As an example, the first Social Impact bond out of the United Kingdom 
was a 6-year contract.

Both of those barriers require Congressional action, but the fix is 
relatively simple and is handled in S. 1089. However, there is a larger 
challenge the federal government will face as it engages in Pay for 
Success financing projects, and that is a challenge of human capital. 
Federal entities are generally not experienced in this field, and we 
need to develop that expertise in a deliberate fashion. Through the 
commission created in S. 1089, we can begin building expertise 
throughout the federal systems, allowing us to operate more efficiently 
in this field going forward.

What Are the Limitations and Challenges of Pay for Success Financing?

As with any exciting new model, it is easy to lose sight of the 
limitations and challenges. There are some problems for which Pay for 
Success is simply not a solution. For example, it does not provide a 
sound model for providing ongoing funding programs, or for encouraging 
better evaluation of programs, that are already operating at scale.\3\ 
It also is not yet well-suited to fund untested innovations (though, a 
robust Pay for Success mechanism might encourage novel innovations to 
look to earlier evaluations).
---------------------------------------------------------------------------
    \3\ Some Pay for Performance systems, which are supported also by 
S. 1089 but are beyond the scope of these comments, would allow for 
ongoing funding and evaluations.

Similarly, Pay for Success might not make the most sense for those 
specific services in those rare circumstances where success is nearly 
guaranteed, because the model does involve premium payments in exchange 
for investors bearing the risk of failure. In a case where there is 
virtually no risk, then the investment would be less beneficial from a 
financial perspective. Even in that scenario, however, Pay for Success 
financing may provide governments with the fiscal relief they need to 
help shift resources from remediation towards prevention by enabling 
---------------------------------------------------------------------------
them to pay at the end of the project rather than at the beginning.

Moreover, Pay for Success financing deals are difficult to put 
together, from a technical perspective, so they are currently only 
appropriate for larger projects where the benefits exceed the 
transaction costs.

What Are Some of the Technical Challenges of Pay for Success Financing?

      Identifying rigorously tested interventions: We have to find and 
develop interventions with rigorous evidence of outcomes. There are 
many interesting interventions out there with great confidence in, but 
little proof of, their results. So the first hurdle is identifying the 
rigorously tested programs, and then also encouraging promising 
programs to develop the kind of evidence that investors and governments 
need. S. 1089 wisely emphasizes the importance of feasibility studies 
to address both of these issues.

      Identifying governmental entities: One difficulty here flows 
from the fact that many governments are interested in this model 
primarily for interventions that produce net cost savings (in that they 
cost less now than they save later). However, those savings may spread 
among various governmental entities, especially with early childhood 
interventions, from Medicaid to juvenile justice to education. It is 
sometimes difficult to find a single agency that reaps enough of the 
benefits, then, to afford the full costs of a successful program. S. 
1089 addresses this issue in two ways. First, it provides for a single 
entity that can look at benefits across the federal government and, 
second, the legislation is created to support state and municipal deals 
that impact federal priorities.

      Identifying appropriate outcome metrics: We have to be very 
cautious to identify outcome metrics with which the service providers, 
the investors, and the government are all comfortable. This is one of 
the most challenging elements, particularly with respect to concerns 
over creating perverse incentives. PFS financing should avoid the 
danger that providers will ``game the system'' by determining outcomes 
compared to a control group or a matched comparison group. If the 
evaluation is well designed, any changes in how outcomes are counted 
will affect both the program group and the control group and thus will 
not translate into better results. This challenge is also why building 
expertise and collaboration within the federal contracting system--as 
S. 1089 envisions--is critical to long-term success.

      Building the system to measure success: As mentioned above, a 
centerpiece of Pay for Success financing is rigorous and ongoing 
outcome measurement, which is challenging for even the best-resourced 
programs. Pay for Success, however, builds that evaluation into the 
model from beginning to end, and in such a way that it cannot get lost 
in the shuffle--investors only invest, and only get a return, if 
successes are measured and verified by an independent evaluator. S. 
1089 supports that model by expressly requiring that the evaluation 
mechanisms be identified at the beginning.

Given These Difficulties, Why Is so Much Progress Happening Anyway?

      Investors are asking for it: We frequently hear from bank 
executives that their high-net-worth clients increasingly seek 
investments that are aligned with their values. More and more, the 
industry is focusing on generating both direct financial returns and 
positive social outcomes.

      Governments are looking for more cost-effective strategies to 
achieve public goals: Governments spend a tremendous amount of 
resources responding to crisis situations and providing remediation 
services. Those governments would normally have to sacrifice some of 
those critical services to invest resources in early interventions. Pay 
for Success allows governments breathing room to pay for interventions, 
in full or part, out of the long-term savings they produce. Moreover, 
Pay for Success financing helps governments move in a direction they 
are increasingly interested in: toward analyzing benefits and costs of 
specific strategies and choosing the ones that produce the best value 
for taxpayers.

Conclusion

Pay for Success Financing is a promising tool for improving social 
outcomes and government efficiency. The Institute for Child Success is 
encouraged by the attention this financing model has received by our 
elected officials at the federal level, and we are even more encouraged 
by the Committee's positive hearing on S. 1089. This financing model is 
challenging, especially for the federal government, but has tremendous 
potential for improving our collective fiscal position while directly 
improving social outcomes. We look forward to continued work with the 
Committee and Congress on this issue in the weeks and months to come. 
Thank you for the consideration of these comments.

                                 ______
                                 
               International Foster Care Alliance (IFCA)

                             Seattle Office

          6542 4th Avenue NW, Seattle, Washington 98117 U.S.A.

                         1-888-447-IFCA [4322]

                              Tokyo Office

         1-33-6-202 Tomigaya, Shibuyaku, Tokyo, 151-0063 JAPAN

                          [email protected]

                          www.ifcaseattle.org

                  Statement of Miho Awazu, MSW, LICSW

_______________________________________________________________________

I would like to thank Chairman Hatch, Ranking Member Wyden, and other 
distinguished members of the Senate Finance Committee for the 
opportunity to submit this statement for a matter that is of great 
importance for me and for my nonprofit organization members.

I am the founder and board president of International Foster Care 
Alliance (IFCA), a nonprofit organization based in Seattle, Washington. 
As an international child welfare organization, we create and sponsor 
collaborative projects that connect foster youth, foster parents and 
child welfare professionals between the United States and other 
countries. We are currently working primarily with our branch office 
and project partners in Japan.

IFCA believes that the shift of focus from traditional psychotherapy to 
more 
evidence-based practices (EBP) and increase in accessibility of these 
quality EBPs for children and youth in foster care is a pressing issue 
that needs urgent policy attention.

The purpose of this statement is to:

  Illustrate the needs of quality evidence-based mental health 
treatment for children and youth in the foster care system in this 
country, and the consequences of not pursuing this goal for the future 
of our young people and taxpayers;

  Recommend Trauma-Focused Cognitive Behavioral Therapy (TF-CBT) as an 

evidence-based treatment method for child and youth who experienced 
traumatic events in their lives;

  Inform others about our organization, which promotes collaboration 
between mental health professionals and foster youth, and explain why 
it is important to include foster youth's voice as some of the best 
spokespersons for the future mental health policy and practice reform 
in the U.S. and beyond.

Current Conditions of Mental Health Services for Children and Youth in 
Foster Care

Each year, approximately 250,000 children enter foster care in this 
country. These foster care populations disproportionately include low-
income families and communities with racial and ethnic minorities.

Prior to entering foster care, approximately 90% of these children were 
exposed to multiple traumatic experiences that include but are not 
limited to physical and sexual abuse, serious and chronic neglect, and 
exposure to domestic and community violence. Prolonged trauma exposure 
in childhood significantly increases the risk of negative developmental 
outcomes. A study indicates that up to 80% of the children in foster 
care require interventions for serious behavioral and mental health 
problems. It found that about three out of five children in foster care 
have a lifetime mental health diagnosis and close to one in five 
children has three or more lifetime mental health 
diagnosis.\5\, \8\

Despite this great concern regarding mental health of children entering 
foster care, an astounding 75% of investigated children with mental 
health problems are not likely to receive needed treatment. It is 
speculated that even higher rates of unmet need are found among 
children who remain at home after child protection agencies' 
investigations.\1\

Some researchers argue that one of the biggest reasons why foster 
children do not receive mental health services is because they are not 
provided with necessary mental health screening or assessment after the 
initial investigation. A study found that more than half of all 
agencies surveyed did not require systematic, universal mental health 
evaluations for children entering foster care. Only 20% had limited 
policies that required mental health evaluations, and about 30% of 
agencies lacked any policy regarding mental health assessment. With no 
policy or limited mental health assessment policy agencies, concerns 
related to children's behavioral and emotional problems, suicidal 
risks, substance abuse and other impaired functioning can easily be 
neglected.\6\

In contrast, interventions with medications are far more frequently 
used among the foster care population in this country. In 2011, the 
Government Accountability Office (GAO) reported that a child in foster 
care is up to 4.5 times more likely to receive psychotropic drugs 
compared to a non-foster child. Psychotropic medications created to 
address serious mental health disorders alter children's behaviors, 
mood and emotions. Furthermore, GAO reveals that foster children are 
more likely to be prescribed five or more psychotropic drugs at an age 
and at doses not approved by the Federal Drug Administration. It is 
alarming that many of these children receive psychotropic medications 
with no additional interventions such as psychotherapy and behavioral 
treatment.\2\, \10\

Need for Evidence-Based Treatment for Children in Foster Care and Cost 
of Not Providing Such Services

Adolescents age out from the foster care system between age 18 and 21 
are newly independent young adults who have very little support and 
resources and encounter astonishingly high rates of unemployment, 
homelessness and other adversities. Mental health, social, and other 
concerns continue among youth who have experienced foster care 
throughout their childhood.

Child trauma experts state that trauma exposure, especially exposure to 
child abuse and neglect, appear to have a life-long impact. Adults who 
at some point were in foster care are two to seven times more likely to 
have PTSD, anxiety disorders, depression and drug dependence than 
adults who were not in foster care, and these diagnoses are also 
frequently associated with a number of other mental health issues such 
as aggression, attention deficits, eating disorders, and suicidal 
thoughts and behaviors.\11\

Also in recent years, increasingly more studies have been conducted on 
links between mental health and physical health, and the results 
indicate that co-occurrence of mental and physical illnesses is a 
notable consequence of childhood maltreatment. Children diagnosed with 
mental health disorders such as depression, anxiety and PTSD, often 
receive medical diagnoses including heart diseases, diabetes and 
cancer.\9\

Considering the multiple traumatic exposures and other life 
difficulties that foster children experience before entering state 
care, one could imagine that their mental health costs are very high. 
Regarding the cost of mental health services, Medicaid expenditures for 
children in foster care receiving behavioral health services are 
significantly higher than for other children in Medicaid. Children in 
foster care have the highest mean behavioral health expenditures at 
$8,094 per year, compared to other children in Medicaid ($4,868).\2\

As stated above, cost of mental health for maltreated children is a 
societal issue. However, if we all know that the mental health 
conditions of foster children continue onto their adulthood and affect 
their physical health throughout their life, the benefits of these 
youth receiving services far exceed the potential cost of them not 
receiving timely and effective treatment.

The use of traditional never-ending psychotherapy, however, is not the 
answer to solve the financial and other challenges. A study showed that 
traditional psychotherapy received for six months by foster children at 
the time of entry into foster care did not have any overall outcome in 
depression, self-esteem, and behavior problems. It is urgent that 
policy makers and other stakeholders pay close attention to time-
limited, effective treatment methods supported by evidence.

Psychologist Shannon Dorsey is one of the most well-known child trauma 
treatment researchers and trainers. She is one of IFCA's project 
partners. In her 2012 research, Dr. Dorsey concludes that routine 
trauma exposure screenings should be utilized for all children entering 
foster care. Treatment should include trauma-focused, evidence-based 
treatment, and information sharing needs to be increased among 
caregivers, child welfare workers, and all professionals providing care 
for foster children and their families.\7\

Trauma-Focused Cognitive Behavioral Therapy (TF-CBT) Is One of the Most 
Preferred Treatment Methods for Children and Youth in Foster Care

Trauma-Focused Cognitive-Behavioral Therapy (TF-CBT) is the most well-
supported and effective treatment for children ages 3 to 18 who have 
been abused and traumatized. Multiple clinical research studies 
consistently have found it to help children with PTSD and other trauma-
related problems, and it has been rated a Model Program and Best 
Practice for use with abused and traumatized children. TF-CBT currently 
is being used successfully in child welfare and community service 
agencies across the country.

The treatment is based on learning and cognitive theories and addresses 
distorted beliefs related to the abuse. Combining elements drawn from 
various therapy techniques including cognitive therapy, behavioral 
therapy and family therapy, TF-CBT provides a supportive environment in 
which children are encouraged to talk about their trauma experience. 
TF-CBT also helps children's caregivers cope effectively with their own 
emotional distress and develop skills that support the 
children.\2\, \3\, \12\

Barriers often documented for implementing evidence based practices in 
the United States are:

      The need for the development of more culturally appropriate and 
sensitive services while maintaining the fidelity of the practices; and

      Accessibility to affordable and specific training for clinicians 
on trauma focused interventions.

TF-CBT addresses the above two barriers with these solutions below:

      When TF-CBT was developed by 3 mental health professionals 
on the east coast, they looked at the cultural and ethnic diversity of 
this county, and at the possibility of disseminating this treatment 
model worldwide. The result was a trauma treatment method known to be 
one of the most ``culturally relevant'' evidence based practices. The 
training manuals contain many materials to teach clinicians cultural 
considerations and sensitivity.

      The ``TF-CBT Web'' is a free, open website that contains 
many lessons for clinicians and students. Anyone who has a master's 
degree in related fields can access this website and receive a 
certificate upon completion of the 15-hour course. In addition, in the 
last 15 years, the developers trained over 50 train-the-trainers across 
the nation certifying them to train other TF-CBT trainers and 
increasing the accessibility of trainers. They also have several world 
trainers who have traveled to many parts of the globe to teach this 
method.\2\, \3\, \13\

Furthermore, TF-CBT is a time limited (12 to 16 weeks) treatment that 
involves not only traumatized children but also their caregivers. By 
involving caregivers in the therapeutic process, child clients are 
always with them caregivers' recoveries accelerated. This unique child-
caregiver dyad practice thus makes the treatment model cost effective.

IFCA's Global Programs Involving TF-CBT Dissemination Efforts and 
Partnership Between Mental Health Professional's Expertise and Foster 
Youth

In the last 10 years, child abuse and neglect cases have rapidly 
increased in Japan and, more than ever before, effective therapeutic 
methods are sought for these child victims. In 2011, the large 
earthquake/tsunami in eastern Japan brought challenges to many children 
who lost their family members. Abuse and disaster victim children and 
youth suffered complex trauma and grief symptoms and needed effective 
and timely therapy.

IFCA's first project since its inception in 2012 was to bring one of 
the best American TF-CBT to Japan.

Monica Fitzgerald, Ph.D. (University of Colorado), a world TF-CBT 
trainer, has visited Japan 4 times in the past 3 years and taught over 
200 clinicians in the Tsunami disaster affected area and other major 
cities in Japan. In 2016, Shannon Dorsey, Ph.D. (University of 
Washington) came to Tokyo with IFCA's invitation and taught TF-CBT 
method to an additional 40 clinicians in Japan. These 240 clinicians 
have treated a total of over 1,000 children with this evidence-based 
trauma treatment method.

        On the following pages of this document, you will be able to 
        read a Japanese clinician's notes from her work using TF-CBT 
        with boy ``H'' who was a child abuse victim and lost his only 
        relative.

One another major program that IFCA offers is foster youth 
collaboration between Japan and the United States. Foster youth and 
foster care alumni from the Tokyo and Seattle areas visit one another's 
country once per year to learn about foster care systems in a 
culturally and geographically broader context. From these exchanges, 
youth members learned that youth in these two countries suffer from 
complicated emotions and trauma related to their past abuse and 
neglect, as well as from an astounding lack of quality mental health 
services available to them. In both countries, foster youth have 
considerably worse outcomes than youth who grow up in traditional home 
settings.

To bring about public awareness and changes in the metal health policy 
field, IFCA has established a unique collaboration model where foster 
youth and mental health experts present together at national and world 
scholastic conferences.

Our young member team with mental health professionals from Japan and 
the U.S. presented at the International Society for the 2014 Prevention 
of Child Abuse and Neglect (ISPCAN) World Conference in Nagoya. They 
also presented at the 2015 American Professional Society of the Abuse 
of Children (APSAC) National Conference in Boston.

Experts in the mental health field are not just professional adults. 
Foster youth are important experts who have experienced and lived the 
system and can bring unique insider perspectives to policy discussions. 
Including youth's voices to change the current systems is far more 
effective than having only clinicians and researchers and policy makers 
involved in the reform efforts.

        On the following pages of this document, former foster youth 
        Janice shares her own experience as a foster child as well as 
        her emotional/psychological recovery, and describes some of the 
        challenges that foster youth face when receiving mental health 
        services in the U.S.

Conclusion

Since the enactment of the Adoption and Safe Families Act (1997), the 
focus of child welfare has been to achieve safety, permanency and well-
being of vulnerable children and youth in foster care. The principle of 
``well-being'' encompasses children's emotional and behavioral health. 
Despite the recognized importance of mental health services for foster 
care population, there still is a significant gap between children who 
need services and children who receive services.

If the goal is to reduce the unmet need for mental health services 
among children and youth in foster care, child welfare agencies, 
legislators and other stakeholders will need to implement high quality, 
time-limited, cost effective evidence based treatment.

                                 ______
                                 

A Child Psychiatrist's Story About 10 Year-Old Boy ``H''

A child psychiatrist who participated in Dr. Fitzgerald's workshop is 
treating 
trauma-affected children in one of the Tohoku prefectures. She sent 
IFCA the following message.

Ten-year-old boy ``H'' was abused by his parents since he was a 
toddler. After being abandoned by his parents, ``H'' has been raised by 
his grandmother. On March 11th, 2011, ``H'' lost his only relative, his 
grandmother, in the Tsunami disaster. Being in a severe state of shock 
and confusion, ``H'' was placed in a psychiatric hospital. For many 
months, this young boy was not willing to talk to anyone.

I treated ``H'' using TF-CBT's technique. Slowly but surely, ``H'' has 
opened up his mind and started to speak to me about his parents' past 
abuse towards him, the horrific experience of the Tsunami disaster, and 
his feelings towards his grandmother. TF-CBT has a wonderful tool 
called ``Trauma Narrative.'' Children use this method to create their 
own books to talk about their trauma experiences. Not only do they 
share these books with their therapists, they also share them with 
their caregivers. This experience leads the children to a state of 
self-discovery and revelation.

``H'' was released from the hospital and lives in a local children's 
facility. He can now talk with his peers about his bright future. 
Through practicing TF-CBT, I learned what traumatized children should 
learn about their internal selves.

Monica Fitzgerald, Ph.D.

                                 ______
                                 

APSAC Speech, July 23, 2015 by Janice Cole

The very circumstances by which youth enter foster care necessitate 
challenges with trauma and mental health. Consider the two reasons that 
a youth would enter foster care: (1) abuse or (2) neglect. For whatever 
and for varied reasons, their parents were unable to care for them, and 
so they are removed. Ignoring the circumstantial trauma of why youth 
enters care, the removal itself, and the separation from one's 
biological family, is a whole different trauma. Foster youth are sent 
to live with strangers, often with little to no explanation, and often 
without their siblings. I think there are few who would argue against 
the claim that people who go through situations like these need mental 
health support.

In fact, in a recent study by Casey Family Programs, it was found that 
80% of foster youth experience some kind of mental health challenge 
that requires treatment and intervention. Additionally, the study finds 
that there is a high need for mental health services, and yet an 
underutilization of the services that are available. Other challenges 
found include racial disproportionality, type of placement, over 
medication, lack of proper assessment tools, lack of appropriate 
treatments, and stigma of not only being in foster care, but also of 
accessing mental health services.

I would like to argue that while mental health services do in fact 
exist, they need to be taken a step further. We need to move away from 
simply the availability of services, and move toward providing quality, 
evidence-based services for youth and alumni of care. This is something 
I strongly believe can only be accomplished if professionals partner 
with the youth they are serving. To illustrate this point, I would like 
to share my own story of mental health.

I mentioned that foster youth typically enter foster care due to abuse 
or neglect. For me, I entered foster care at age 3 due to neglect. My 
biological parents were so addicted to drugs and alcohol that by the 
time the state intervened, my older brother (who was 5) was the sole 
caretaker of both myself and our younger brother (who was 1 year old). 
When I was put in foster care, I was separated from both of my brothers 
and had three different placements by age 5. Now, I would like to pause 
and draw your attention to the traumas I had amassed by this point in 
my life: poverty, neglect, malnourishment, loss of parents, loss of 
siblings, and placement instability. I was also extremely bullied by my 
foster brothers and sisters.

Given this, it should be no surprise that when I was adopted at age 6, 
I was immediately placed into therapy. However, I use this term 
loosely. I remember each week I would go to my therapist's office and 
play with toys while my parents sat and right in front of me would tell 
this stranger how my brothers and I were ruining their lives. I do not 
ever remember this therapist ever speaking to me, which was funny 
because I was her actual client. In fact, our therapist-client 
relationship was so non-existent that when my adoptive parents began to 
abuse me, I said nothing to her. I feared that since she only ever 
spoke with my parents, that she would simply tell them what I said, and 
I would get more hurt.

Eventually, the counseling sessions ceased, but the abuse did not. In 
fact, it worsened in every way. My adoptive parents threatened that if 
I ever told anyone what was happening, the state would come and take me 
away, and I would never see my brothers again. Having experienced the 
pain of that loss before, I stayed silent. This went on for nine years 
until I couldn't take it anymore. It was only after a failed suicide 
attempt that I finally gathered the courage to speak up.

As soon as I did, I was immediately placed back into foster care in 
relative placement with my oldest sister. I was also immediately placed 
into therapy. This time though, things were different. My therapist, 
who specialized in intensive trauma recovery, actually asked me 
questions about myself. She always asked my permission before sharing 
anything that I told her with my guardians. She also focused on 
empowering me by giving me the tools to work toward my own recovery. 
She explained to me what triggers were, and taught me grounding 
techniques so that when I was triggered and felt a panic attack coming, 
I could cope and not be afraid. Having the skills to take charge of my 
own mental health was one of the most liberating experiences I have 
ever had. I can't say that my mental health is perfect, as I am sure 
none of us can. But I can say that this therapist taught me that I was 
powerful, not broken. That I was normal and brave for asking for help. 
And she taught me that I could heal.

I hope that my story, along with those of my peers, has illustrated how 
important it is to not just offer mental health services, but to 
provide quality, evidence-based treatment. I hope we have also shown 
you how critical it is to partner WITH youth and alumni of care, and to 
empower them to be the strong and resilient people we all know them to 
be.

As a team, we put together a list of recommendations on ways mental 
health providers could incorporate these ideas into their own practice. 
I'd like to share those now, and we hope that these will be a starting 
off point as we engage in small group dialogue on practice 
implications.

(1) Know:
      The culture of foster care.
      What evidence-based practices exist.

(2) Ask:
      What do you need? What do you want?

(3) Listen:
      Affirm our experiences, and don't be afraid to ask about/
talk about our trauma.
      Normalize therapy and teach us that getting help is not only 
okay, but brave and strong.

(4) Respond:
      Teach: skills for managing trauma reactions and symptoms.
      Anticipate: resurfacing trauma and triggers.
      Connect: to support services, educate youth on how to find 
and access evidence-based mental health supports so that in the future, 
when things resurface, as we all know they will, we won't be afraid to 
take charge of our own lives.

Thank you.

References

\1\ Ai, A.L., Jackson Foster, L.J., Pecora, P.J., Deleaney, N., and 
Rodriguez, W. (2013). Reshaping child welfare's response to trauma: 
Assessment, evidence-based intervention, and new research perspective. 
Research on Social Work Practice 23(6); 651-68.

\2\ Center for Health Care Strategies, Inc. (June 2014). Medicaid 
behavioral health care use among children in foster care: Fact sheet.

\3\ Cohen, J.A., Manarino, A.P., and Deblinger, E. (2006). Treating 
trauma and traumatic grief in children and adolescents. New York: The 
Guilford Press.

\4\ Cohen, J.A., Manarino, A.P., and Deblinger, E. (2012). Trauma-
Focused CBT for children and adolescents. Treatment Application. New 
York: The Guilford Press.

\5\ Dorsey, S., Burns, B., Sutherland, D., Cox, J., Wagner, H.H., and 
Farmer, E. (2012). Prior trauma exposure for youth in treatment foster 
care. Journal of Child and Family Studies 21(5), 816-824.

\6\ Levitt, J.M. (2009). Identification of mental health service need 
among youth in child welfare. Child Welfare 88(1), 27-48.

\7\ Love, S.M., Koob, J., and Hill, L.E. (2008). The effects of using 
community mental health practitioners to treat foster children: 
Implications for child welfare planners. Scientific Review of Mental 
Health Practice 6(1), 31-39.

\8\ Pecora, P.J., Jensen, P.S., Romanelli, L., Jackson, L.J., and 
Ortiz, A. (2009). Mental health services for children placed in foster 
care: An overview of current challenges. Child Welfare 88(1), 5-26.

\9\ Pecora, P.J., Kessler, R.C., Williams, J., Downs, A.C., English, 
D.J., and O'Brien, K. (2010). What works in family foster care?: Key 
components of success from the Northwest foster care alumni study. New 
York and Oxford, England: Oxford University Press.

\10\ United States Government Accountability Office. (2011). Foster 
Children: HHS Guidance Could Help States Improve Oversight of 
Psychotropic Prescriptions: Statement of Gregory D. Kuts, Director 
Forensic Audits and Investigative Service.

\11\ Zlotnick, C., Tarn, T.W., and Soman, L.A. (2012). Life course 
outcomes on mental and physical health: The impact of foster care on 
adulthood. American Journal of Public Health 102(3), 534-540.

\12\ International Foster Care Alliance (IFCA), http://
www.ifcaseattle.org/professionals.html.

\13\ TF-CBTWeb, https://tfcbt.musc.edu.

                                 ______
                                 
              Local Initiatives Support Corporation (LISC)

                        TESTIMONY SUBMITTED BY:

             MATTHEW JOSEPHS, SENIOR VICE PRESIDENT, POLICY

Chairman Hatch, Ranking Member Wyden, and Distinguished Members of the 
Senate Committee on Finance:

The Local Initiatives Support Corporation (LISC) appreciates the 
opportunity to submit testimony for the record on how evidence-based 
practices improve outcomes for vulnerable families. We especially 
appreciate the opportunity to highlight how the Pay for Success (PFS) 
model, also known as Social Impact Bonds, is supporting 
evidence-based practices in local communities. Thank you, Senators 
Hatch and Wyden, for initiating a discussion around a relatively new 
alternative funding mechanism that will benefit low-income families and 
economically challenged communities plagued by disinvestment.

ABOUT LISC:

Established in 1979, USC is a national non-profit Community Development 
Financial Institution (CDFI) dedicated to helping community residents 
transform distressed neighborhoods into healthy and sustainable 
communities of choice and opportunity--good places to work, do business 
and raise children. LISC mobilizes corporate, government and 
philanthropic support to provide local community development 
organizations with loans, grants and equity investments, as well as 
technical and management assistance.

LISC has local programs in over 30 offices nationwide and partners with 
over 70 rural community organizations. For more than three decades, 
LISC has developed programs and raised investment capital to help local 
groups revive their neighborhoods. We deliver tailored support for 
community-based organizations to meet specific needs in the areas of 
housing, economic development, education, healthcare, community safety, 
and building family financial stability.

In recent years, LISC has been at the forefront of developing model 
initiatives that, in addition to providing tremendous benefits for low-
income families, have the potential to result in considerable cost 
savings for federal, state and local governments. Our work attempts to 
meet the comprehensive needs of communities, spanning multiple 
categories--from improving the long term financial well-being for 
families, to reducing crime in communities through targeted 
interventions, to investing in supportive housing that mitigates the 
societal cost of emergency responses for the chronically homeless.

In early May 2016, the Corporation for National and Community Service 
(CNCS) announced LISC as a Social Innovation Fund (SIF) PFS grant 
recipient. Over two years, a $1.3 million award will be used by LISC to 
provide transaction structuring support to three to four PFS projects. 
LISC's program will connect government funding to preventative programs 
in the health, youth and employment arena in an effort to demonstrate 
positive outcomes for people who access these services. By helping 
social service providers design programs, raise private capital and 
produce the metrics needed to demonstrate results, we will be 
continuing our work in revitalizing neighborhoods and improving 
outcomes for its low-income families.

IMPROVING COMMUNITIES VIA PAY FOR SUCCESS:

Evidence-based practices and policies are a way to build a culture of 
continuous improvement and accountability through the use of 
administrative data to monitor ongoing program performance. As Senator 
Wyden conveyed during the hearing, ``This is a great opportunity to dig 
into an issue that really should be an underpinning of the work 
Congress does every day: that is to say, we should be constantly asking 
whether the laws we write are working as they ought to be.'' With 
evaluation built into the PFS model, there are clear metrics of 
success. Below are several examples of our work that we believe will 
help to enrich the field of Pay For Success.
LISC NYC Two Shades of Green
LISC New York City's Two Shades of Green (TSG) program is a housing 
preservation strategy that incorporates green and healthy practices 
into the buildings. LISC received a $15 million Weatherization 
Assistance Program (WAP) contract from New York State to fund the 
installation of energy-efficiency retrofits in 2,226 apartments in 95 
buildings. LISC used this opportunity to expand the program scope 
beyond energy outcomes to capture other health, environmental and 
economic benefits.

TSG has two primary goals. First: Increase the health and wellness of 
building residents and staff by integrating green, healthy and cost-
effective measures into existing affordable housing rehabilitation and 
property maintenance. Measures include: safe and green pest control to 
reduce exposure to toxic pesticides, aperture sealants to prevent pests 
from entering and heat from escaping, smoke-free housing to reduce 
resident exposure to secondhand tobacco smoke and fire risk as well as 
decrease the cost of unit turnover, active design through low-cost 
modifications and add-ons to increase the physical activity of 
residents, and use of green cleaning products to reduce exposure to 
harmful chemicals.

Second: Help property managers and owners consume less energy and water 
and realize cost savings through more efficient operations. As such, 
TSO also provides a comprehensive set of services to advance energy and 
water conservation measures, including: benchmarking to measure project 
performance pre- and post-retrofit, project design assistance for 
energy and water retrofits, coordination with available rebate or 
incentive programs, preparation of financing packages to support 
retrofit work, and staff training and preparation of operation and 
maintenance plans.

Since 2013, LISC and our partners have helped implement TSO energy, 
water and health upgrades on 600 units. Baseline measures have been 
established to hone TSO outcomes and assess changes to asthma triggers, 
costs, and complaints over time, and the program conducts ongoing 
evaluation of both the health and utility outcomes. Preliminary 
evidence shows a reduction in the number of asthma attacks and other 
health complaints for building residents along with reduced utility 
costs for property managers.
Supportive Housing Services to Vulnerable Populations
Senate Finance Committee members emphasized a desire to see federal 
funds used more effectively to address social issues. We believe that 
providing supportive housing services to vulnerable populations 
represents an opportunity to recognize cost savings to society.

LISC, through its affiliate the National Equity Fund (NEF), financed a 
mixed-
income housing property in Brooklyn, NY which includes 60 supportive 
housing units: 20 designated for referrals from the New York State 
Office of Mental Health and 40 for referrals from the New York City 
Department of Homeless Services. All of the referrals for these 60 
units are persons living with a diagnosed mental illness, and nearly 
all (more than 90%) spent at least one year prior to their arrival in 
an expensive publically funded institutional setting (either a city 
emergency shelter or a state psychiatric center). The development 
opened in the spring of 2012; by November of that year, all 60 units 
were occupied. 18 months later (November 2013), 90% of the original 
occupants (55 out of 60) remained housed at the development. Services 
include medication monitoring and education, entitlements counseling, 
access to mental health and primary health care and supported 
employment programs.

The resultant cost savings are significant: Residents at the 
development are maintained in housing in the community at a fraction of 
the cost associated with the intuitional alternatives they resided in 
before. The annual cost to maintain a patient in a New York State 
funded psychiatric center is $292,730; the annual cost to permanently 
house a former OMH psychiatric center patient at this development is 
less than 15% of that amount, or roughly $32,000 per year.
Financial Transaction Structuring
There are many high-performing social programs operating throughout the 
country, but little capacity or capital available to such programs in 
order to bring them to scale. Transactions yield too thin a margin 
without capturing the federal component of the savings to offer risk-
adjusted returns that would attract market-oriented ``impact 
investors.'' USC is well positioned to determine whether a project is a 
best practice that can and should be replicated. We have the capacity 
to examine an 
evidence-based strategy, its social value in the targeted low-income 
communities, the magnitude of the organizational capacity to implement 
the project, its attractiveness to funders and other providers of 
capital, and its riskiness in terms of repayment of capital and 
achievement of social outcomes.

Financial intermediaries like LISC and other CDF is have much to offer 
the field of social impact investing. In a recent report by MDRC, 
Learning From Experience: A Guide to Social Impact Bond Investing, 
Gordon Berlin points out, ``Community development finance institutions 
have the infrastructure and the know-how needed to make social 
investing deals, making them the `go-to' organizations for SIBs.''

We hope to help build the body of knowledge around PFS best practices 
and transaction structuring and contribute to the ongoing conversations 
about the strengths and limitations of the Pay for Success model. LISC 
is committed to helping to shape the future of social impact investing 
in terms of program implementation, deal structuring and evaluation. As 
we share our insights with CNCS and the Social Impact Investing field, 
we hope to identify and bridge existing gaps in services needed to 
close PFS transactions. To this end, in February 2016, USC hosted a 
webinar on underwriting PFS investments targeting private investors. 
USC will build on these knowledge sharing activities through a series 
of trainings on PFS structuring and investments, risk analysis and 
contracting. These activities are intended for a wide audiences 
including investors, underwriters, service providers, government 
entities and evaluators. We intend for our work to contribute to a rich 
pool of knowledge with PFS practitioners across the country, driving up 
the number of executed high-quality PFS transactions.

PAY FOR SUCCESS SHIFTS RISK, SPURS INNOVATION:

Pay for Success investments shift the risk for government entities 
attempting innovative solutions. When there is evidence of significant 
cost savings, as demonstrated above, federal, state and local 
governments can partner with philanthropies and private investors to 
leverage financial resources. Governments pay only for outcomes 
achieved. Private investors assume the risk by initially funding the 
intervention and are repaid upon success of the program.

We applaud Congress for recognizing the utility of cross-sector 
partnerships and encouraging data-driven social investments. Social 
Impact Partnership legislation introduced by Senators Hatch and Bennet 
(S. 1089) and Representatives Young and Delaney (H.R. 5170) support 
measurable, clearly defined outcomes that result in social benefit, 
with independent evaluation as a clear indicator of program success. 
These innovative proposals encourage social service programs to have 
evidence of effectiveness in PFS projects and require rigorous 
evaluation. The bills also seek to spur innovation in the PFS arena by 
allocating $100 million in funding for projects and compensating state 
and local governments for savings that accrue at the federal level.

As Senator Hatch pointed out during this hearing, ``Social impact 
financings gives local leaders the flexibility to design and adjust 
programs to fit local needs in order to ensure that they have the 
desired impact.'' By structuring payments around measurable outcomes, 
PFS's flexibility allows implementation of evidence-based programs, 
careful testing of innovative projects, and scalability of successful 
programs.

We applaud Congress's bipartisan and bicameral efforts to investigate 
evidence-based practices. We are hopeful that Pay For Success will 
encourage the implementation of better programs and effective policies 
through the more responsible use of taxpayer dollars. If LISC can be a 
resource to you or your staff, please contact Abigail Santos, Assistant 
Policy Officer, at (202) 739-9288 or [email protected] with any 
questions.

                                 ______
                                 
     The National Campaign to Prevent Teen and Unplanned Pregnancy

   1776 Massachusetts Avenue, NW, Suite 200 | Washington, DC | 20036

         TheNationalCampaign.org | bedsider.org | StayTeen.org

                                                       May 23, 2016

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

Re: Full Committee Hearing, ``Can Evidence-Based Practices Improve 
Outcomes for Vulnerable Individuals and Families?''

Dear Chairman Hatch, Ranking Member Wyden, and members of the 
Committee:

On behalf of The National Campaign to Prevent Teen and Unplanned 
Pregnancy, thank you for the opportunity to submit a statement for the 
record for the Senate Finance Committee Hearing ``Can Evidence-Based 
Practices Improve Outcomes for Vulnerable Individuals and Families?'' 
held May 10, 2016. The National Campaign, a research-based, 
nonpartisan, nonprofit organization was founded in 1996. Our mission is 
to improve the lives and future prospects of children and families and, 
in particular, to help ensure that children are born into stable 
families who are committed to and ready for the demanding task of 
raising the next generation. Our strategy is to prevent teen pregnancy 
and unplanned pregnancy, especially among single, young adults. 
Ensuring that young people have access to high quality, 
evidence-based teen pregnancy prevention education is one critical 
element in helping more young people delay pregnancy and parenting. In 
this statement, we offer information about two such programs, the 
Personal Responsibility Education Program (PREP) and the Teen Pregnancy 
Prevention Program (TPPP), that we hope will be helpful as the 
Committee goes about its important work.

Since the early 1990s, teen pregnancy and birth rates have declined by 
55% and 61%, respectively.\1\, \2\ However, it is still the 
case that roughly one in four girls in this country will become 
pregnant before the age of 20, and nearly half of all teen girls in 
foster care have been pregnant at least once by the age of 19.\3\ Even 
with dramatic across the board declines, disparities persist by race 
and ethnicity, education and income, and geography.\4\ For example, 
four in 10 African American girls and one in three Latinas will become 
pregnant before age 20, compared to roughly one in six non-Hispanic 
White teen girls.\5\ Birth rates for Native American teens are well 
above the national average.\6\ In addition, teen birth rates in rural 
areas are nearly one-third higher compared to rates in the rest of the 
country.\7\ Moreover, the United States has much higher teen pregnancy 
rates than our trading partners.

In addition to costing taxpayers more than $9.4 billion annually, our 
high teen pregnancy rates threaten to hinder our nation's progress, as 
young parents have less opportunity to get the education and skills 
they need to compete in a 21st century workforce.\8\ For instance, 30% 
of teen girls who have dropped out of high school cite pregnancy/
parenthood as a key reason. And fewer than 2 percent of those who have 
a child before age 18 attain a college degree by age 30.\9\ However, 
the unprecedented declines over the past two decades show that progress 
is possible. Since the 
evidence-based programs PREP and TPPP began in 2010, the teen birth 
rate in the U.S. has declined 29%, a drop about twice as large as in 
any other 4-year period.\10\

Before these two programs began, there was no federal investments in 
evidence-based teen pregnancy prevention programs; research in this 
area had primarily come from private investments. In fact, our 
organization, which has had a long standing commitment to identifying 
and supporting evidence-based programs to reduce teen and unplanned 
pregnancy, published one of the first reviews of effective teen 
pregnancy prevention programs in 1997 by Dr. Doug Kirby entitled No 
Easy Answers \11\ that found very few effective programs. By 2001, when 
we published Dr. Kirby's next research review, called Emerging 
Answers,\12\ there were several rigorous studies of programs that 
showed sustained positive effects on behavior. These offered the field 
a handful of programs from which to choose, but trying to find funding 
for such programs was a struggle. When we published Dr. Kirby's updated 
literature review called Emerging Answers 2007, the quantity and 
quality of evaluation research had grown dramatically and there were 
now 15 programs with strong evidence of positive impact on sexual 
behavior or pregnancy or STD rates.\13\ However, the ability to 
replicate these programs was limited in large part by a lack of public 
funding.

In FY 2010, this changed significantly when the Finance Committee 
established PREP, funded at $75 million annually, and Congress 
appropriated $110 million for TPPP.\14\ As of FY 2016, there is $286 
million dedicated to teen pregnancy prevention education programs, of 
which $176 million is devoted to these two evidence-based programs.\15\ 
An additional $6.8 million is appropriated for evaluating teen 
pregnancy prevention programs. This was a tremendous shift towards 
evidence-based policymaking. Still, taken together, multi-year PREP and 
TPPP grants are sufficient to serve fewer than 2 percent of teens in 
the United States.

PREP and TPPP, like the Maternal, Infant, and Early Childhood Home 
Visiting program, have been recognized as pioneering examples of tiered 
evidence-based policymaking,\16\ and represent an important 
contribution to building a body of evidence of what works. They include 
high quality implementation, evaluation, innovation, and learning from 
results. The majority of PREP and TPPP funding goes toward replicating 
programs that have been demonstrated to change behavior using well 
recognized high standards of evidence. A smaller portion of funding is 
reserved for research and demonstration projects to develop, replicate, 
refine, and test additional models and innovative strategies. This 
ensures that the menu of effective approaches to reducing teen 
pregnancy will continue to grow and be refined.

Grantees can choose a program model from a list of effective programs 
that have been identified as a result of the U.S. Department of Health 
and Human Services' (HHS) ongoing systematic review of the teen 
pregnancy prevention research literature. Since 2009, HHS has sponsored 
this review of the literature to help identify programs with evidence 
of effectiveness in reducing teen pregnancy, sexually transmitted 
infections (STIs), and associated sexual risk behaviors. The review, 
conducted by Mathematica Policy Research, looked at hundreds of 
evaluations and initially identified 28 programs that met Tier 1 
criteria. That is, they must have been evaluated using a randomized 
controlled trial or quasi-experimental design. These evaluations must 
demonstrate actual changes in behavior (not just knowledge or 
behavioral intent), and results must be published in a peer-reviewed 
journal. The evidence review is updated periodically to capture the 
latest evaluation studies, and now includes 44 programs.\17\ The 
evidence reviews and searchable database of effective programs 
available on the HHS website is similar to the ``what works 
clearinghouse'' called for in Results for America's Moneyball for 
Government.\18\ The wide range of models on the HHS list of evidence-
based programs, including abstinence programs, youth development 
programs, and those that address both abstinence and contraception 
gives grantees the flexibility to choose an effective approach that 
reflects their needs and values, recognizing that what people in Utah 
choose may be different from what people in Oregon choose.

PREP was established by the Finance Committee in FY 2010, alongside the 
State Abstinence Education grants. PREP continues to be funded at $75 
million in mandatory funding annually through FY 2017. Administered by 
the Administration on Children Youth and Families (ACF), PREP supports 
states, communities, and tribes to educate adolescents on both 
abstinence and contraception to prevent pregnancy and STIs, and on 
other adulthood preparation topics such as healthy relationships, 
communication with parents, and financial literacy. PREP focuses on 
youth at greatest risk of teen pregnancy and geographic areas with high 
teen birth rates. For example, 34% of grantees targeted youth in foster 
care and 74% target youth in high need areas.\19\ Most of the PREP 
funding ($58 million) supports grants to states, territories, and 
tribes and emphasizes the use of evidence-based programs. Indeed, more 
than 95% of youth served by the state grants received one of the 
evidence-based programs from the HHS list referenced above.\20\ An 
additional $10 million supports competitive grants to public and 
private entities to develop, replicate, refine, and evaluate innovative 
strategies to reduce teen pregnancy and repeat pregnancies among youth 
up to age 21. These grants are subject to rigorous evaluation and 
reflect a ``Tier 2'' approach that support s innovation, fills gaps in 
existing programs for underserved populations, and expands knowledge 
about what works. Together, PREP grantees served more than 126,000 
youth in 2014.\21\

Funded at $101 million for FY 2016, TPPP is a discretionary program 
administered by the Office of Adolescent Health that currently supports 
81 competitive grants to a broad range of organizations and agencies in 
38 states and the Marshall Islands. The grantees focus intensely on 
communities with the highest teen birth rates and the most at-risk 
youth. These 5-year grants were awarded in FY 2015 and are contingent 
on continued appropriations. Approximately 75% of the grants funds are 
used to replicate program models that have already been shown through 
careful evaluation to change teen behavior (Tier 1),and approximately 
25% of the funds support research and demonstration projects to 
develop, replicate, refine, and test additional models and innovative 
strategies to prevent teen pregnancy (Tier 2). The first round of TPPP 
grantees served more than 140,000 youth in 2014,\22\ and the new round 
expect to serve 291,000 youth annually.\23\

PREP and TPPP have been lauded by independent experts as strong 
examples of evidence-based policymaking. For example, the Bridgespan 
group cited the TPPP as a model for how to expand evidence-based 
practices.\24\ Ron Haskins, a former Ways and Means Human Resources 
Subcommittee Staff Director, described PREP and TPPP as case studies of 
evidence-based policymaking in his book Show Me The Evidence.\25\ PREP 
is also highlighted in the Results for America Invest in What Works 
Index of federal departments and agencies.\26\ Moreover, the federal 
list of evidence-based teen pregnancy prevention programs has become a 
resource for people around the country looking for effective programs, 
allowing states and communities to leverage their resources, without 
reinventing the wheel. Also, as the National Conference of State 
Legislatures has noted, the evidence-based approach to teen pregnancy 
prevention programs has inspired legislation in several states.\27\

A number of experts, including Ron Haskins, have referenced the 
importance of continual learning and evaluation as a hallmark of 
evidence-based policymaking. Both PREP and TPPP have made a serious 
commitment to evaluation, with a combination of national and grantee 
level evaluations.\28\, \29\ This includes rigorously 
evaluating models that have already proven effective in past studies to 
see how they perform in additional sites and settings, rigorously 
evaluating promising programs to determine if they can demonstrate 
positive results, and collecting a host of grantee-level performance 
measures. They have also invested in technical assistance, training, 
and support for grantees to ensure high quality implementation.

Ongoing commitment to evidence-based approaches to reducing teen 
pregnancy will not only improve outcomes for vulnerable children and 
families, but are also a cost-effective investment.\30\ In fact, only 
about $1 out of every $100 spent on federal programs is backed by any 
evidence that the money is being spent wisely. At a time when leading 
experts--from The Brookings Institution to The Heritage Foundation to 
Results for America--and members of Congress are wisely and 
increasingly focused on ensuring that federally funded programs achieve 
results, and that they are rigorously evaluated in order to be sure 
that they do; PREP and TPPP are smart uses of taxpayer money.

Reducing teen pregnancy helps reduce poverty, increase educational 
achievement and workforce competitiveness, and improve the health and 
well-being of children and families. PREP and TPPP help achieve this 
goal by adhering to high standards of evidence, focusing on outcomes 
rather than program content, and ensuring the growth and support of a 
broad menu of proven program models that communities can choose from. 
Indeed, both programs embody many of the positive qualities of 
evidence-based programs highlighted by Finance Committee members and 
witnesses at the hearing, such as continual evaluation that allows for 
ongoing program improvement, the flexibility to respond to outcomes by 
replicating program models that demonstrate success, and the ability to 
refine what we know about what program models work best with specific 
populations and in specific settings.

In closing, thank you for your commitment to evidence-based 
policymaking and improving the lives of vulnerable individuals and 
families. If you have any questions or need additional information, 
please contact me at 202-478-8554 or akane@
thenc.org.

Sincerely,

Andrea Kane
Vice President, Policy and Strategic Partnerships

------------------------------------
\1\ Kost, K., and Maddow-Zimet, I. (2016). U.S. Teen Pregnancies, 
Births and Abortions, 2011: State Trends by Age, Race and Ethnicity. 
Washington, DC: Guttmacher Institute. Retrieved May 23, 2016 from 
https://www.guttmacher.org/sites/default/files/report_pdf/us-teen-
pregnancy-state-trends-2011_4.pdf.
\2\ The National Campaign to Prevent Teen and Unplanned Pregnancy. 
(2016). Teen Childbearing in the United States, 2014 Birth Data. 
Washington, DC: Author. Retrieved May 23, 2016 from http://
thenationalcampaign.org/resource/teen-childbearing-united-states-2014-
birth-data.
\3\ Ng, A.S., and Kaye, K. (2013). Why It Matters: Teen Childbearing 
and Child Welfare. Washington, DC: The National Campaign to Prevent 
Teen and Unplanned Pregnancy. Retrieved May 23, 2016 from http://
thenationalcampaign.org/resource/why-it-matters-teen-childbearing-and-
child-welfare.
\4\ U.S. Centers for Disease Control and Prevention. (2016). Teen birth 
rates fall nearly 50 percent among Hispanic and black teens, dropping 
national teen birth rate to an all-time low. Atlanta, GA: Author. 
Retrieved May 23, 2016 from http://www.cdc.gov/media/releases/2016/
p0428-teen-birth-rates.html.
\5\ The National Campaign to Prevent Teen and Unplanned Pregnancy. 
(2014). Teen Pregnancy in the United States. Washington, DC: Author. 
Retrieved May 23, 2016 from https://thenationalcampaign.org/resource/
fast-facts-teen-pregnancy-united-states.
\6\ The National Campaign to Prevent Teen and Unplanned Pregnancy. 
(2016). Teen Childbearing in the United States, 2014 Birth Data. 
Washington, DC: Author. Retrieved May 23, 2016 from http://
thenationalcampaign.org/resource/teen-childbearing-united-states-2014-
birth-data.
\7\ Ng, A.S. and Kaye, K. (2015). Sex in the (Non)City: Teen 
Childbearing in Rural America. Washington, DC: The National Campaign to 
Prevent Teen and Unplanned Pregnancy. Retrieved May 23, 2016 from 
http://thenationalcampaign.org/resource/sex-non-city.
\8\ The National Campaign to Prevent Teen and Unplanned Pregnancy. 
(2013). Counting It Up: Key Data. Washington, DC: Author. Retrieved May 
23, 2016 from https://thenationalcampaign.org/resource/counting-it-key-
data-2013.
\9\ Shugar, L. (2012). Teen Pregnancy and High School Dropout: What 
Communities Can Do to Address the Issue. Washington, DC: The National 
Campaign to Prevent Teen and Unplanned Pregnancy and America's Promise 
Alliance. Retrieved May 23, 2016 from https://thenationalcampaign.org/
sites/default/files/resource-primary-download/teen-preg-hs-dropout.pdf.
\10\ The National Campaign to Prevent Teen and Unplanned Pregnancy. 
(2015). Survey Says: Extend Not Eliminate. Washington, DC: Author. 
Retrieved May 23, 2016 from http://thenationalcampaign.org/resource/
survey-says-plus-july-2015.
\11\ Kirby, D. (1997). No Easy Answers: Research Findings on Programs 
to Reduce Teen Pregnancy. Washington, DC: National Campaign to Prevent 
Teen Pregnancy.
\12\ Kirby, D. (2001). Emerging Answers: Research Findings on Programs 
to Reduce Teen Pregnancy. Washington, DC: National Campaign to Prevent 
Teen Pregnancy.
\13\ Kirby, D. (2007). Emerging Answers 2007: New Research Findings on 
Programs to Reduce Teen Pregnancy--Full Report. Washington, DC: The 
National Campaign to Prevent Teen and Unplanned Pregnancy. Retrieved 
March 30, 2015 from http://thenationalcampaign.org/sites/default/files/
resource-primary-download/EA2007_
full_0.pdf.
\14\ Solomon-Fears, C. (2016). Teenage Pregnancy Prevention: Statistics 
and Programs. Washington, DC: Congressional Research Service. Retrieved 
May 23, 2016 from https://www.fas.org/sgp/crs/misc/RS20301.pdf.
\15\ For an overview of these programs, see The National Campaign to 
Prevent Teen and Unplanned Pregnancy. (2016). Federal Funding Streams 
for Teen Pregnancy Prevention. Washington, DC: Author. Retrieved May 
23, 2016 from http://the
nationalcampaign.org/resource/federal-funding-streams-teen-pregnancy-
prevention.
\16\ Results for America. (2015). Invest in What Works Fact Sheet: 
Federal Evidence-Based Innovation Programs. Washington, DC: Author. 
Retrieved May 22, 2016 from http://results4america.org/policy-hub/
invest-works-fact-sheet-federal-evidence-based
-innovation-programs/. Also, Haskins, R. (2014). Show Me The Evidence. 
Washington, DC: Brookings Institution Press.
\17\ Lugo-Gil, J., Lee, A., Vohra, D., Adamek, K., Lacoe, J., and 
Goesling, B. (2016). Updated findings from the HHS Teen Pregnancy 
Prevention Evidence Review: July 2014 through August 2015. Washington, 
DC: Mathematica Policy Research. Retrieved May 23, 2016 from http://
tppevidencereview.aspe.hhs.gov/pdfs/Summary_
of_findings_2015.pdf.
\18\ Ayotte, K., Warner, M., Hubbard, G., Sperling, G., Barnes, M. 
Bridgeland, J., . . . Madden, K. (2014). Moneyball for Government. 
United States: Results for America.
\19\ Administration for Children and Families/Family and Youth Services 
Bureau. (2015). Adolescent Pregnancy Prevention Program Fact Sheet. 
Washington, DC. Author. Retrieved May 23, 2016 from http://
www.acf.hhs.gov/programs/fysb/resource
/app-fact-sheet.
\20\ Administration for Children and Families/Family and Youth Services 
Bureau. (2015). Personal Responsibility Education Program: How States 
Planned and Implemented Adolescent Pregnancy Prevention Programs: State 
PREP Performance Measures of Structure, Cost, and Support for 
Implementation. Washington, DC: Author. Retrieved May 23, 2016 from 
https://www.acf.hhs.gov/sites/default/files/fysb/
prep_pm_brief_20151216.pdf.
\21\ The number is a combined estimate from the State, Competitive, and 
Tribal PREP grants. See Administration for Children and Families/Family 
and Youth Services Bureau. State Personal Responsibility Education 
Program. Washington, DC: Author. Retrieved May 23, 2016 from http://
www.acf.hhs.gov/programs/fysb/resource/prep-fact-sheet; Administration 
for Children and Families/Family and Youth Services Bureau. Competitive 
Personal Responsibility Education Program. Washington, DC: Author. 
Retrieved May 23, 2016 from http://www.acf.hhs.gov/programs/fysb/
resource/competitive-prep-fact-sheet; and Administration for Children 
and Families/Family and Youth Services Bureau. Tribal Personal 
Responsibility Education Program. Washington, DC: Author. Retrieved May 
23, 2016 from http://www.acf.hhs.gov/programs/fysb/resource/tribal-
prep-fact-sheet.
\22\ U.S. Department of Health and Human Services. (2015). Fiscal Year 
2016 General Departmental Management Justification of Estimates for 
Appropriations Committee. Washington, DC: Author. Retrieved May 23, 
2016 from http://www.hhs.gov/sites/default/files/budget/fy2016/fy2016-
general-departmental-budget-justification.pdf.
\23\ U.S. Department of Health and Human Services. (2015). HHS awards 
Teen Pregnancy Prevention Program grants. Washington, DC: Author. 
Retrieved May 23, 2016 from http://www.hhs.gov/about/news/2015/07/06/
hhs-awards-teen-pregnancy-prevention-program-grants.
\24\ The Bridgespan Group. (2013). The Bridgespan Group Highlights 
Federal Teen Pregnancy Prevention Program as Model for How to Expand 
Evidence-based Practices. Boston, MA: Author. Retrieved May 23, 2016 
from http://www.bridgespan.
org/About/Media/The-Bridgespan-Group-Highlights-Federal-Teen-
Pregn.aspx#.VRh
10jTD86w.
\25\ Haskins, R. (2014). Show Me The Evidence. Washington, DC: 
Brookings Institution Press.
\26\ Results for America. (2016). Invest in What Works Index. 
Washington, DC: Author. Retrieved May 23, 2016 from http://
results4america.org/policy-hub/2016-federal-invest-works-index/.
\27\ Blackman, K. (2016). Evidence-Based Policies to Prevent Teen 
Pregnancy. Washington, DC: The National Conference of State 
Legislatures. Retrieved May 23, 2016 from http://www.ncsl.org/
documents/health/lb_2416.pdf.
\28\ U.S. Health and Human Services Administration/Office of Adolescent 
Health. (2015, July). TPP Resource Center: Evaluation. Washington, DC: 
Author. Retrieved May 23, 2016 from http://www.hhs.gov/ash/oah/
DEPRECATED/evaluation-original/evaluation.html.
\29\ Mathematica Policy Research. Personal Responsibility Education 
Program Evaluation. Retrieved May 23, 2016 from http://
www.prepeval.com.
\30\ Sawhill, I., Thomas, A., and Monea, E. (2010). An Ounce of 
Prevention: Policy Prescriptions to Reduce the Prevalence of Fragile 
Families. Future of Children Vol. 20 (2). Retrieved May 23, 2016 from 
http://futureofchildren.org/publications/docs/20_02_07.pdf.

                                 ______
                                 
                      Nonprofit Finance Fund (NFF)

                      5 Hanover Square, 9th Floor

                           New York, NY 10004

                        Statement for the Record

          ``Can Evidence-Based Practices Improve Outcomes for 
                 Vulnerable Individuals and Families?''

                              May 10, 2016

Nonprofit Finance Fund

Nonprofit Finance Fund (NFF) is a national 501(c)(3) community 
development financial institution with over 35 years investing in and 
advising the social sector. We unlock the potential of mission-driven 
organizations through tailored investments, strategic advice, and 
accessible insights. NFF has partnered with a wide range of public and 
private providers of capital to develop and implement innovative and 
effective ways to increase the flow of capital to a chronically 
undercapitalized social sector. Throughout this time, we have also 
worked closely with the providers of services to empower them with the 
skills and capacity necessary to convert capital into meaningful, 
positive outcomes for the individuals, families and communities that 
they serve. We are a financial educator and trusted advisor to 
nonprofits and funders. We surface and communicate trends that emerge 
from serving thousands of organizations.

NFF's aspiration is to share the learnings from our work in the sector 
to help government and other stakeholders make public policy changes 
that benefit nonprofits and help them accomplish their mission. NFF is 
uniquely positioned for this work, building from a distinguished record 
of direct investment, advisory work and applied research. Our 
transactional experience in the trenches and our demonstrated ability 
to communicate complex financial concepts to nonprofit practitioners 
provide a unique and powerful base from which to move forward. NFF 
continuously advocates for the health and vitality of the social 
sector, providing critical insights in response to challenging 
environmental conditions, a sector-wide need for reform, public policy 
changes or lack thereof, and apparent fragility among organizations 
working in the current system.

Pay for Success

Pay for Success is a creative approach to funding social services, with 
potential to bring new, significant, and reliable resources to proven 
preventative programs. In a Pay for Success deal, private investors pay 
for preventative or interventional social services up front. Should 
these services deliver their intended results, governments then 
reimburse the investors with a return on their investment, while saving 
money on what they otherwise would have spent. It is a model designed 
to both improve outcomes and reduce costs. Pay for Success centers upon 
evidence-based practices that have demonstrated effectiveness in 
addressing some of society's most intractable issues. From reducing 
chronic homelessness and jail recidivism, to improving early childhood 
education and health outcomes for vulnerable populations across the 
nation, Pay for Success is shifting the sector's focus to the 
importance of understanding and scaling services that have demonstrated 
evidence of effectiveness and propelling states and counties across the 
United States to form multi-sector stakeholders aligned around shared 
outcomes goals. NFF believes that the system change work of aligning 
spending and program delivery around outcomes-oriented services 
requires the collaboration of public, private, nonprofit and academic 
stakeholders. PFS is but one tool that can catalyze this shift, but it 
has had a notable impact to date, bringing attention to innovative 
means to align resources around evidence-based programs.

NFF's Work in Pay for Success

With the arrival of Pay for Success (PFS) in the United States in 2010, 
we at NFF, along with many others in the sector, recognized its 
potential to catalyze improved delivery of and investment in better 
social outcomes. Equally as important was the recognition that PFS also 
had the potential to motivate a needed discourse among service 
providers, traditional and new social sector investors, governments and 
other stakeholders in the sector on how to align their efforts to 
improve our society's capacity to deliver better outcomes more cost 
effectively for the beneficiaries of social programs.

NFF continues to provide capital to the U.S. social sector through 
facility, working capital and bridge loans from our $80 million loan 
fund and New Markets Tax Credit transactions and to deliver strategic 
financial management advice and capacity building programs to service 
providers and providers of capital. We have also made a strong 
commitment to supporting an investigation of PFS's potential and to 
systematically preparing the sector for outcomes-based financing of 
social services more broadly.

Within this framework, the portion of NFF's work devoted to the PFS 
space has focused from the outset on helping service providers, 
investors, and governments understand and build readiness for 
productive participation in a U.S. social sector where providing and 
accessing capital is increasingly tied to the achievement of meaningful 
and measurable outcomes. During this time, NFF has led sector-wide PFS 
education, outreach and convening efforts in close collaboration with 
multiple stakeholders, including the Rockefeller Foundation, the White 
House Office of Social Innovation and Civic Participation, William and 
Flora Hewlett Foundation, Joyce Foundation, DoL, DoJ, OMB and numerous 
other service providers, state and local government entities, 
intermediaries and researchers. Through these efforts and our Pay for 
Success Learning Hub (payforsuccess.org), which has attracted more than 
35,000 unique visitors, we aim to facilitate a balanced, objective and 
transparent dialogue on the opportunities and challenges PFS presents 
for all of us in the social sector.

Throughout this period, our PFS work has also focused on capacity 
building initiatives to better prepare service providers, investors, 
and governments for collaborative participation in an outcomes-based 
funding world. With support from the Rockefeller Foundation in 2013, 
NFF designed and led readiness incubators and accelerators for cohorts 
of service providers in five geographies across the country. 
Governments, funders and high performing service providers in each of 
these targeted locations are advancing outcomes-based finance 
strategies such as PFS to test the potential of these approaches to 
deliver better outcomes and provide a supplemental, cost-effective 
source of capital for vital social service programs.

As NFF begins its 35th year serving the capital, capacity building and 
thought partnership needs of the social sector, we are very excited 
about our growing diverse and integrated portfolio of capital access 
and capacity building work. Most recently, in partnership with the 
Corporation for National and Community Service (CNCS) Social Innovation 
Fund, and the Laura and John Arnold Foundation, NFF has launched an 
initiative that will award a total of $2.88 million, through an open, 
competitive grant competition, over 2 years to support Pay for Success 
transaction structuring efforts across the U.S. Additionally, with the 
support and partnership of Irvine Foundation, NFF continues to oversee 
a statewide initiative in California designed to catalyze Pay for 
Success transactions by sharing expertise, building leadership and 
aligning the efforts of a diverse set of stakeholders, such as service 
providers, investors, intermediaries and government. Furthermore, in 
2013 NFF received an award of $1.347 million from the Community 
Development Financial Institutions Fund Program Award to attract 
additional capital to invest in Pay for Success transactions. We have 
invested these funds into two county-level Pay for Success projects: 
the Cuyahoga Partnering for Family Success Program in Cuyahoga County, 
OH and the Housing to Health Initiative in Denver, CO.

Insights to Share With the Senate Finance Committee

      Allocation of federal funding to support state and local PFS 
projects in the form of back-end payments is still critical to market 
growth--this can take the form of the $300 million PFS Incentive Fund, 
proposed to be housed at Treasury Department, or RFPs put out by 
individual agencies as in the case of the HUD/DOJ opportunity.

      Federal government can also enable better outcomes by providing 
authority within existing budgets (as in WIOA, which allows for up to 
10% of state block funding to be used in pay for performance 
arrangements) or by providing relief from regulatory constraints which 
prohibit agencies from blending funding and sharing data. One example 
of this is the Performance Partnership Pilot projects which allow 
states to blend different sources of discretionary and block grant 
money typically managed by different, non-collaborating agencies, and 
report on a single set of outcomes for projects serving disconnected 
youth.

      Ongoing support for the Social Innovation Fund is critical, 
because it has dedicated resources to evaluation/building the evidence 
base through the SIF Classic competitions, as well as seed market 
growth in the PFS field. SIF has also played the role of field builder 
and educator about PFS and evidence within government, and can continue 
to support other agencies in developing PFS RFPs and competitive 
funding opportunities that weight evidence and evaluation in their 
scoring.

      In general, there is a greater need for federal resources for 
evaluation, as well as resources to support service provider capacity 
building to ready the field to engage in evaluations, and measure and 
report on outcomes.

                                 ______
                                 
                   Letter Submitted by Deborah Perin
May 21, 2016

Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510-6200

Re: Full committee hearing held on May 10, 2016 entitled, ``Can 
Evidence-Based Practices Improve Outcomes for Vulnerable Individuals 
and Families?''

Dear Senate Committee on Finance:

    I am deeply concerned about how our child welfare system treats 
children and families once those families are involved with the child 
welfare. Families are often treated without compassion, and care is not 
taken to ensure parents are not falsely accused. In reality, if initial 
allegations are false, child welfare will often dig for reasons to stay 
in a family's life and take their child.
Let me give you a hypothetical example:
    Little Carly is playing out in front of her house. The neighbor 
sees the child playing, and because the child's mom is not directly in 
her view, she assumes that the child is unsupervised. The neighbor 
chooses to call child welfare. A caseworker arrives at the house with 
two police officers; they say that they had an anonymous call about 
their small child playing out front without supervision and they insist 
that it is necessary to come in the house to check on the child. The 
parents, feeling that they do not have a choice, invite the caseworker 
and the police officers into their home.

    The mother states, ``I am in the process of cleaning out some 
closets so please excuse the mess.'' The mother then explains to the 
caseworker that she was watching her child on the day someone claimed 
the child was alone, and that she would never dream of leaving her 
child unsupervised. The caseworker checks Carly for outward signs of 
abuse and then insists on looking in the refrigerator and in the 
child's bedroom.

    The caseworker writes in her notes, ``The house is a mess and 
dishes are piled up in the sink.'' In reality, the breakfast dishes are 
in the sink and the house is only a mess because as the mother had 
said, she was cleaning out some closets. The caseworker then asks the 
parents if they have ever abused drugs or alcohol. The dad reveals that 
he had a problem with alcohol, but that he went through rehabilitation 
and has been clean for 10 years.

    The caseworker writes down, ``Father is an alcoholic.'' The 
caseworker says to the mother, ``The child has a small bruise on her 
lower leg.'' To which the mother says, ``She fell down 2 days ago while 
we were playing at the park.'' The caseworker writes down, ``Child has 
a bruise on her leg, possible abuse.''

    At this point, the caseworker tells the mother and father that 
their child is being taken into custody and they will be contacted 
concerning a court date. Over the next few months, the mother and 
father are given a case plan by child welfare and each of them is 
assigned their own court-appointed attorney.

    Each parent is then told by their own court-appointed attorney to 
sign the case plan, and that if they truly want their children back, 
they will need to separate from each other. Over the next few months, 
the parents contact their attorneys regularly trying desperately to 
figure out how to get their daughter back. Their calls are ignored.

    At his court-appointed attorney's request, the father leaves the 
family home, and moves in with his mother and father. Both parents 
follow the case plan, which states that the parents will be required to 
attend parenting classes, psychological evaluations, and psychotherapy. 
The father is also required to attend AA meetings and take weekly urine 
tests. In addition, both parents must allow background checks and 
access to their old high school records. Child welfare also demands 
access to Carly's medical records and school records.

    Over the next several months, the parents never miss a visit with 
Carly even though the visit days and times change quite frequently. 
When the parents ask for more visitation, they are told that is not 
possible, and they will just have to be happy with two supervised 
visits per week, at one hour apiece.

    When the parents go to family court, the judge listens to the 
caseworker who says, ``The child was living in filthy conditions, she 
was obviously being abused and neglected. In addition, the father is an 
alcoholic.'' The caseworker continues by saying, ``The child needs to 
stay with the foster family.'' The caseworker also says, ``This is the 
best course of action.'' The family court judge agrees. Carly's court-
appointed attorney agrees. The mom's court-appointed attorney agrees. 
The father's court-
appointed attorney agrees, and the CASA agrees.


    Upon looking at the child's school records, the caseworker reads 
that little Carly ``has some issues paying attention in class'' and 
``the teacher asked the parents to have her evaluated for ADHD.'' The 
record continues saying, ``The parents stated that they did not want to 
medicate their first grader and they were hoping the school had other 
options.'' The caseworker writes in her file, ``Parents refuse to 
medicate their ADHD child. Parents are medically neglecting their 
child.''

    Months go by and the parents have slowly seen their child become 
emotionally detached from them. The psychological evaluations of the 
parents say that both parents are ``depressed and maybe a little 
paranoid that the system is out to get them.'' According to the 
psychologist hired by child welfare, the parents were ``desperately in 
need an intervention from child welfare.''

    During psychotherapy, with the psychologist hired by child welfare, 
the parents admit that they are living separately because their court-
appointed attorneys felt they would have a better chance of getting 
their child back if they were to live separately. The psychotherapist 
writes, ``Parents are not living under the same roof. There is concern 
about contention between the parents. This is an unsafe environment for 
the child.''

    During the months following Carly's removal from her family, family 
members have stepped up and offered to take Carly in during the child 
welfare investigation. This request is denied by child welfare.

    Carly's parents only hear from their court-appointed attorneys 
right before a court appearance is imminent and their attorneys do not 
return their phone calls. In addition, their attorneys just seem to 
agree with whatever the family court judge says, and Carly's parents 
finally realize that they are completely on their own because they 
don't have the funds to hire their own attorney.

    Hoping to prove they are good parents, Carly's mom and dad obtain a 
statement from Carly's pediatrician stating that she was seen 
regularly, and that the doctor never had concerns of abuse. This 
paperwork is ignored by child welfare. Friends and acquaintances offer 
statements stating the parents are of good character. This information 
is also ignored by child welfare. In addition, the father's court-
ordered urine tests for alcohol use have been clean every time, but no 
mention of this has been made in court by child welfare.

    Around 15 months after their child was taken from them, the 
caseworker tells the judge that the child is deeply bonded to the 
foster family and it would be in Carly's best interests to be adopted. 
Each parent gets a letter stating that the state is moving forward with 
termination of parental rights. Upon speaking to their court-
appointed attorneys, the parents are told they have two options.
Here are the parents' two options:
#1 Sign away your parental rights and be given 2 to 3 supervised visits 
per year under a Post Adoption Visitation Agreement. A court-approved 
visitation specialist will supervise these visits, and you, the parent, 
will pay the hourly fee for that supervisor. If you sign your rights 
away voluntarily, this is called a voluntary adoption. Because it is 
voluntary, and your rights are not being terminated by the state, we 
will not step in and seize future children should you have more in the 
future.

#2 Go to trial and if you lose, you will not be allowed any visitation 
after your child's adoption. You will also have lost your parental 
rights through state intervention and so any future children will be 
taken from you at birth, and we are under no obligation to return those 
children to you.

    b  The story above was not based on one family's experience with 
child welfare. Instead, it is based on the general experiences of 
several families. This story was meant to show the rabbit hole that 
parents are forced to go down while dealing with child welfare.

_______________________________________________________________________

    It would be nice if we could depend on child welfare to behave 
morally regardless of where the federal funding is allocated. However, 
it is obvious that their goal is to tap the most lucrative funding 
sources.
I have seven suggestions to improve child welfare:
#1 Prioritize keeping parents and children together from day one. 
Parents and children need to stay together while services are offered 
to families unless it is determined that the child is in imminent 
danger.

    b  Who determines that the child is in imminent danger? It cannot 
be child welfare. Not while they are still receiving massive funding 
for removals and adoptions.

#2 Remove mandatory reporting which often scares people into reporting 
even the smallest detail for fear of losing their job or license. 
Instead of trusting child welfare agencies completely, we need to start 
putting more faith in the average professional to report only when they 
deem it necessary.

#3 Get rid of adoption incentives.

    b  I realize that you might be hesitant to get rid of adoption 
incentives because you are worried about the children who would be 
stuck in foster care. However, offering adoption incentives has only 
caused child welfare to look for more children to place instead of just 
placing the children they already have.

#4 Create a funding structure that strongly favors returning children 
to their families over adopting them out to another family.

#5 Family courts need a jury of 12. Criminals get a jury partly because 
they may be up against a life sentence or even a death sentence. I say 
with all honesty that parents are up against the same cruel punishment 
within our family courts. Losing a child is worse than death.

    b  Give parents a jury of 12 in family court.

#6 Give parents ongoing surveys with open-ended questions. Give those 
surveys to extended family members and friends of the family who are 
involved with child welfare, and allow them to give input as to how 
child welfare is treating that family. Are they helping or hindering? 
See if they feel the child's best interests are being valued.

    b  Obviously, child welfare would not be put in charge of those 
surveys nor would they be in charge of handing down their own 
sanctions.

#7 Perform yearly audits on child welfare and impose sanctions on them 
for misdeeds.

I often hear people say quite often that child welfare does not protect 
children who are truly abused. I believe this to be true for two 
reasons.

Reason #1, child welfare has filled its system with children who never 
should have been taken from their parents in the first place. As a 
result, caseworkers have too many cases assigned to them.

Reason #2, when child welfare changed to a system that is 100% focused 
on child removals and adoptions, they sought to obtain children who 
were adoptable. Potential adoptive families are drawn to a child who 
was well taken care of, but whose parents fell on hard times and 
received no help. The adoptive families are told that the well taken 
care of child was abused, and so believing they are saving a child, 
they choose to adopt.

    Because I understand that this is a difficult topic and valuable 
insight is critical to making child welfare better, I have included 
some names of individuals on the following pages who may be able to 
offer you that valuable insight while the committee works on a valid 
solution. We do not want abused kids sitting in foster care, but we do 
not want our individual states to continue kidnapping children to 
obtain federal incentives.

Molly McGrath Tierney is the head of child welfare in Boston.

    Ms. McGrath Tierney was part of a documentary called ``On the Other 
Side of Fear: A Reinvention of the Foster Care System.'' The trailer 
for that film can be found on Vimeo or YouTube. She also put out an 
exceptional TedTalk entitled ``Rethinking foster care: Molly McGrath 
Tierney at TEDxBaltimore 2014'' that is also on YouTube.

    Ms. McGrath Tierney seems to understand that the foster care system 
is broken and genuinely seems to want to come up with answers. I do not 
know her personally, but I am hoping that she genuinely wants something 
much better for kids. That fact that she has insider knowledge may make 
her a good choice for the Senate Finance Committee to consult with.

    If you want to read more about her, you can find a 2015 article put 
out by the Baltimore Sun entitled, ``Former city social services chief 
returns to head agency.'' According to that article, she has ``advised 
government groups and nonprofits in management strategy and delivery of 
social services.''

Molly McGrath Tierney
Baltimore City DSS
Talmadge Branch Building
1910 N. Broadway Street
Baltimore, Maryland 21213
Phone: 443-378-4600

Shawn McMillan is an attorney in California.
News articles concerning Shawn McMillan:
http://www.nbcsandiego.com/news/local/Mother-Custody-Settle-San-Diego-
Johnneisha-Kemper-Shawn-McMillan-278899941.html

Class Action Lawsuit Filed Against Orange County (CA) Child Protective 
Services
Alleges Unwarranted Seizure of Thousands of Children
http://www.prweb.com/releases/2015/04/prweb12668689.htm

Shawn McMillan
4955 Via Lapiz
San Diego, CA 92122
Phone: 858-646-0069
Fax: 206-600-4582
http://www.mcmillan-law.com/?cmd=Shawn

Robert Powell is an attorney in California

His website says, ``Attorney Robert Powell has been representing 
parents in CPS and Juvenile Dependency cases for over 16 years. In 
addition, the firm handles federal civil rights cases associated with 
the unlawful removal of children and deprivation of a family's right to 
association.''

In the YouTube video below, Robert Powell is one of the individuals 
speaking about the problems with child welfare.

``In the Interest of the Children CPS Exposed--Freedom''
Forum: https://www.youtube.com/watch?v=k5JZx5J5W5U

Robert Powell
925 W. Hedding St.
San Jose, California 95126
Phone: 408-553-0200
Fax: 408-553-0203
http://www.rrpassociates.com/cps_defense.html

Carin Johnson is an attorney in California.

Her website says . . .

``Attorney Carin Johnson heads the firm's parental rights and juvenile 
law practice. Mrs. Johnson has been passionately defending parents, 
grandparents, foster parents, and family members' rights in the state 
of California for over 17 years and has successfully defended thousands 
of clients in Child Protective Services and Division of Child and 
Family Services Juvenile Dependency Court.''

In the YouTube video below, Ms. Johnson is one of the individuals 
speaking about the problems with child welfare.

``In the Interest of the Children CPS Exposed--Freedom''
Forum: https://www.youtube.com/watch?v=k5JZx5J5W5U

Carin L. Johnson
2125 Oak Grove Rd., Suite 315
Walnut Creek, CA 94598
Phone: 925-290-6001
Fax: 925-952-8902
http://www.duilawyerwalnutcreek.net/
walnutcreekduilawyercarinljohnson.html

    The four individuals listed above may not be able to help you with 
finance plans, but they would be able to give the Senate Finance 
Committee insight into what is deeply wrong with child welfare. Of 
course, speaking to families who have been robbed of their children 
would also give you additional valuable insight, and I hope that you 
will consider listening to affected families before you suggest a new 
law concerning child welfare. I personally would love the opportunity 
to speak to the Senate Finance Committee in person and discuss how to 
turn child welfare around.

    Neither adoption nor foster care is the correct permanent solution 
for temporary problems.

Sincerely,

Deborah Perin

                                 ______
                                 
                          Quantified Ventures

                  1875 Connecticut Avenue, NW, 10th FL

                          Washington, DC 20009

                            +1-202-734-3712

                   http://www.quantifiedventures.com/

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

Re: Committee Hearing: ``Can Evidence-Based Practices Improve Outcomes 
for Vulnerable Individuals and Families?'' held on May 10, 2016

Dear Chairman Hatch, Ranking Member Wyden, and distinguished members of 
the U.S. Senate Finance Committee:

On April 27, 2015, Senator Orrin Hatch (R-UT) and Senator Michael 
Bennett (D-CO) introduced the Social Impact Partnership Act (S. 1089), 
a bipartisan bill that aims to achieve better outcomes for social 
service program beneficiaries and taxpayers. Quantified Ventures 
strongly supports Social Impact Partnership Act (S. 1089). We believe 
that in order to get the highest return on taxpayer investment 
government should pay providers after they have demonstrated success, 
not based on their potential for success. A Pay for Success project has 
the potential to build evidence, encourage innovation, and create 
incentives for non-federal investment.

Quantified Ventures works with nonprofit organizations, entrepreneurs, 
and governments across the county who demonstrate capacity for 
transformative social good. We help scale operations and deliver 
meaningful impact. What we have seen from our work is diverse 
communities, Republican and Democratic elected officials and community 
service providers coming together to improve outcomes for the people 
they serve.

Pay for Success is a promising model for scaling important 
interventions while saving governments money in the long term. This 
model has tremendous potential for accruing savings to the federal 
government while improving outcomes, and we therefore ask that you 
support these efforts. Thank you for your consideration of these 
comments.

                                 ______
                                 
                              ReadyNation

      1212 New York Avenue, NW | Suite 300 | Washington, DC 20005

        V: 202-408-9282 | F: 866-215-2576 | [email protected]

     www.ReadyNation.org | www.facebook.com/ReadyNation | Twitter: 
                             @Ready_Nation

May 17, 2016

The Honorable Orrin Hatch           The Honorable Ron Wyden
U.S. Senate                         U.S. Senate
104 Hart Senate Office Building     221 Dirksen Senate Office Building
Washington, DC 20515                Washington, DC 20510

Dear Chairman Hatch and Ranking Member Wyden,

We thank you and the members of the Senate Finance Committee for 
hosting the pertinent and timely hearing, ``Can Evidence-Based 
Practices Improve Outcomes for Vulnerable Individuals and Families?'' 
on Tuesday, May 10. Specifically, we were pleased that the witnesses 
affirmed the value of Pay for Success (PFS) initiatives, which create 
innovative partnerships to solve social issues and ensure money is 
spent wisely on evidence-based interventions for children and families. 
We deeply appreciate your commitment to this issue.

With over 1,400 business leader members across the country, ReadyNation 
believes that targeted investments in education lay the foundation for 
an adequately prepared workforce and a robust American economy. 
Specifically, the Pay for Success financing approach embodies business 
principles of making the best use of existing funds, and investing 
early in order to prevent problems before they happen. Pay for Success 
financing can be applied to a wide variety of social programs, 
including high-quality early childhood and voluntary home visiting 
programs. This approach will reduce taxpayer burdens and produce 
positive returns for young children and their families, for taxpayers, 
and for county, state, and the federal government.

We encourage the Finance Committee to report the Social Impact 
Partnership Act (S. 1089) out of committee and continue to examine 
these ground breaking investment methods. Pay for Success has the 
potential to be a critical means of improving social services delivery, 
promoting better outcomes for the populations served, and demonstrating 
meaningful returns to policymakers and the general public.

ReadyNation recognizes the important implications of this hearing and 
commends you for your leadership. We look forward to working with you 
on this and other initiatives to improve the long-term outcomes of 
young children and families in the future.

Sincerely,

Sara Watson, M.P.P., Ph.D.
Global Director

                                 ______
                                 
                          Results for America

                1875 Connecticut Avenue, NW, 10th Floor

                          Washington, DC 20009

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

Re: Committee hearing: ``Can Evidence-Based Practices Improve Outcomes 
for Vulnerable Individuals and Families?'' held on Tuesday, May 10, 
2016

Dear Chairman Hatch, Ranking Member Wyden, and distinguished members of 
the U.S. Senate Finance Committee:

On April 27, 2015, Senator Orrin Hatch (R-UT) and Senator Michael 
Bennett (D-CO) introduced the Social Impact Partnership Act (S. 1089), 
a bipartisan bill that aims to achieve better outcomes for social 
service program beneficiaries and taxpayers. The bill directs resources 
to states and local communities to support innovative public-private 
partnerships in an effort to tackle social and public health challenges 
and establishes a new system for a smarter and more effective use of 
tax dollars. Under the bill, the federal government would establish 
desired outcomes to pressing social problems that, if achieved, would 
improve lives and save taxpayer dollars.

Results for America supports the Social Impact Partnership Act because 
it demonstrates the federal government's commitment to leverage private 
investment, hard data, and rigorous evaluation to achieve better 
outcomes. We strongly urge the Committee to garner robust support for 
the Social Impact Partnership Act to bolster social sector innovation 
and to motivate the federal government to shift to results oriented 
approaches when serving our nation's most vulnerable populations.

                                 ______
                                 
                Save the Children Action Network (SCAN)

                899 North Capitol Street, NE, Suite 900

                          Washington, DC 20002

              Written Testimony of Mark Shriver, President

Chairman Hatch, Ranking Member Wyden, and honorable members of the 
committee, thank you for the opportunity to provide testimony about the 
use of evidence-based practices to improve outcomes for vulnerable 
individuals and families. My name is Mark Shriver, and I am the 
President of Save the Children Action Network (SCAN). SCAN is a 
national, non-profit organization aiming to mobilize Americans in 
support of critical investments in early childhood education.

SCAN supports expanding access to high-quality early childhood 
education programs for all children, especially the most vulnerable and 
at-risk. For this reason, SCAN is pursuing a number of innovative 
financing mechanisms to drive more resources toward early childhood 
education. One of the methods that has received significant bipartisan 
support is Pay For Success, a model supported by the Social Impact 
Partnership to Pay for Results Act (S. 1089) and its companion 
legislation in the House.

Background

Participation in high quality Early Childhood Education (ECE) programs 
is critical for children. During the first 5 years of life, a child 
develops many of the skills necessary to become successful. It is 
during these years that children build the foundation necessary for 
academic success in key subjects, including reading, math, and science, 
as well as the skills necessary for character building, social-
emotional growth, gross-motor development, and executive functioning--
including everything from impulse control to problem solving.

In addition to putting kids on the path to success, early education has 
lasting economic benefits as well. Nobel-prize winning economist James 
Heckman has found a return on investment of $7 for every $1 invested in 
preschool.\1\, \2\
---------------------------------------------------------------------------
    \1\ James Heckman, Seong Hyeok Moon, Rodrigo Pinto, Peter Savelyev, 
and Adam Yavitz, ``A New Cost-Benefit and Rate of Return Analysis for 
the Perry Preschool Program: A Summary,'' NBER Working Paper Series 
(2010), http://jenni.uchicago.edu/papers/Heckman_Moon_etal_
2010_NBER_wp16180.pdf.
    \2\ Investing in Our Future: The Evidence Base on Preschool 
Education, Foundation for Child Development and Society for Research in 
Child Development (October 2013), http://fcd-us.org/sites/default/
files/Evidence%20Base%20on%20Preschool%20Education%20FINAL.pdf.

Unfortunately, two out of five American children are not enrolled in 
preschool. Without access to high quality early learning programs, 
children fall behind and many never catch up. By age 5, more than half 
of all American children are not prepared for school.\3\ Early 
education--starting at birth and continuing until a child's first day 
in kindergarten--is a critical window for ensuring future academic 
achievement. This window, however, closes quickly, and children who 
enter kindergarten unprepared are more likely to experience serious 
negative social impacts. Disadvantaged children who do not participate 
in high quality early education programs are:
---------------------------------------------------------------------------
    \3\ Julia B. Isaacs, ``Starting School at a Disadvantage: The 
School Readiness of Poor Children,'' Center on Children and Families at 
Brookings (March 2012).

      70 percent more likely to be arrested for a violent crime;
      60 percent more likely to never attend college;
      50 percent more likely to be placed in special education;
      40 percent more likely to become a teen parent; and
      25 percent more likely to drop out of school.\4\
---------------------------------------------------------------------------
    \4\ ``Early Childhood Education in the U.S.,'' Save the Children 
USA (2015). Print.

It is critical to ensure that all children, regardless of their 
families' income, have access to high quality preschool and 
comprehensive early education and family engagement programs.

Financing

We know government budgets are tight, and funding is often the largest 
hurdle in the debate to expand early education. While SCAN strongly 
supports robust government funding for early learning programs, we also 
advocate for additional innovative financing mechanisms to further 
increase access to high-quality early childhood education in common-
sense, cost-effective ways.

One of these mechanisms is the Pay for Success (PFS) model, also known 
as Social Impact Bonds (SIBs). In a PFS program, the government repays 
investors for services they agree to pay for up front--but only if an 
evidence-based program achieves predetermined results. Pay for Success 
is based on generating savings for taxpayers through privately funded 
social services, like preschool programs, job training, housing 
assistance or other interventions. Those savings are then measured, 
with the government keeping a portion and the original investors 
receiving a limited portion. If the programs prove effective, the 
investors are repaid. If they are not effective, the government is not 
on the hook for a single penny.

These partnerships formed between the private and public sectors save 
taxpayer money and deliver high-quality, measurable results. Most 
importantly, Pay for Success programs can help supplement existing 
funding; they do not replace traditional government spending for these 
important programs.

Here is how it works. In most cases, a state or local government 
identifies a need in their community and then contracts with private 
investors to front the money for a specific social service. 
Participating nonprofits manage the project while a third party 
conducts a rigorous, independent evaluation at the conclusion to 
determine if the desired outcomes were achieved. The government then 
pays investors back if the desired, predetermined outcomes are 
achieved. Both the investors and the state or local government must 
approve the outcome metrics in advance, and an independent, third-party 
evaluator is tasked with determining if the metrics are met.

Because of this structure, Pay for Success initiatives are a minimal 
risk to taxpayers, but also enable innovative and nimble service 
providers to tackle significant societal challenges. One Pay for 
Success program in Utah is already making a difference in the lives of 
children. This program paid for 595 at-risk, low-income 3- and 4-year-
olds to attend high-quality preschool in the 2013-2014 school year. 
Based on a predictive standardized test, 110 of these students were 
determined to be likely to need special education intervention. After 
one year in high-quality preschool, only one of the 110 identified 
students needed special education services in kindergarten, 
significantly reducing remediation costs for the school district.

Utah then kept part of the savings, with the rest going toward paying 
back the initial investors. It was agreed in the initial contract that 
the investors' return could not be higher than 5% over the municipal 
bond rate (for a total maximum return of 7%). This is a fairly modest 
return for an investment that could be considered relatively risky.

Some critics have pointed to the high success rate of this program as 
an issue. The developers of other PFS programs are taking the lessons 
learned in Salt Lake City and refining the metrics used to determine 
success. Nevertheless, the fact that 600 children in Utah, who would 
not have had a seat in a pre-K classroom and reap its benefits, can now 
attend, is a big step in the right direction. Additionally, the Utah 
program benchmarked payments on those children who are the furthest 
behind or hardest to serve. The early enrollment of students also led 
to a number of students receiving Special Ed services a year earlier 
due to earlier identification of learning disabilities.

The initial results of Pay for Success programs in the U.S. have shown 
that this promising financing method eliminates investments in programs 
that are ineffective and reduces long-term costs through effective, 
results-driven programs that avoid future government spending on 
remedial services.

Conclusion

On behalf of Save the Children Action Network, and our advocates across 
the country, I want to thank the committee for examining evidence-based 
practices as a way to benefit vulnerable individuals and families. We 
strongly support the Social Impact Partnership to Pay for Results Act 
(S. 1089) and believe the programs it would make possible will be an 
important way to expand early childhood education. We ask for your 
continued partnership in investing in children, increasing access to 
opportunity, and ensuring a more prosperous America for generations to 
come.
                             Social Finance

              10 Milk Street, Suite 1010, Boston, MA 02108

                 T 617-939-9900  www.socialfinance.org

May 19, 2016

U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building

``Can Evidence-Based Practices Improve Outcomes for Vulnerable 
Individuals and Families?''

May 10, 2016

On behalf of Social Finance, I applaud Congressmen Young and Delaney's 
and Senators Bennet and Hatch's leadership and support for the Pay for 
Success market through the Social Impact Partnerships to Pay for 
Results Act, H.R. 5170.

The federal government plays a catalytic role in advancing initiatives 
by innovative state and local governments and we commend its bipartisan 
leadership and focus on promoting innovative, outcomes-focused policy. 
As practitioners, we witness firsthand how Pay for Success projects can 
be used to measurably improve the lives of people most in need by 
driving resources toward better, more effective programs.

H.R. 5170 would promote and support the use of Pay for Success by state 
and local governments by enabling federal funds to address community 
identified needs using interventions that are effective, evaluated, and 
provide value to taxpayers. It would incentivize the more efficient use 
of government resources to reward what works.

As you appreciate, government spends hundreds of billions of dollars 
each year on necessary human services, but for the most part, does not 
measure the outcomes of those programs. Government also focuses the 
bulk of its appropriations on tackling existing problems instead of 
investing in upstream, preventative interventions that set people up 
for long-term success.

Pay for Success represents one tool for governments to tackle current 
social challenges, such as reducing recidivism as part of the growing 
effort to reduce incarceration rates, confronting chronic homelessness 
to lower the number of people living on the streets, and boosting early 
education efforts to help narrow the widening achievement gap. It 
allows philanthropy and impact investors to leverage their financial 
support to expand access to high impact interventions. It also drives 
innovation by service providers to most effectively respond to our most 
critical social needs and our most vulnerable citizens.

Pay for Success projects combine nonprofit expertise, private funding 
and rigorous evaluation to transform how government leaders respond to 
chronic social problems. Funders provide upfront capital to expand 
effective social services and governmental entities pay for all or part 
of the program only if it measurably improves the lives of 
participants. Independent evaluators measure the effects of a program 
based on specific, predetermined metrics that benefit both individuals 
and society and generate value for taxpayers.

Take, for example, Social Finance's work on the South Carolina Nurse-
Family Partnership (NFP) Pay for Success project. This initiative, 
which was announced by Governor Nikki Haley in February 2016, will 
bring NFP's evidence-based program to 3,200 first-time mothers and 
their babies across South Carolina over the next 6 years, more than 
doubling the 1,200 families currently benefiting from this high-
impact intervention.

More than 280,000 South Carolina children--or about 27 percent--live in 
families struggling with poverty. Half of the babies in South Carolina 
are born to low-income mothers who qualify for public health insurance 
programs. Young mothers living in poverty are at greater risk for poor 
birth outcomes including delivering premature babies. Growing up in 
poverty can be harmful to a child's cognitive development, health, 
school performance, and social and emotional well-being.

NFP pairs vulnerable first-time mothers with registered nurses who have 
specialized training in maternal and child health. Through home visits 
from early in pregnancy to the child's second birthday, the nurses 
support mothers in having healthy pregnancies, becoming knowledgeable 
and responsible parents and giving their babies the best possible start 
in life. By strengthening families and improving early childhood 
development, NFP helps break multi-generational poverty.

This example highlights an important feature of Pay for Success: it 
holds a unique position in the growing impact investment landscape. 
While there is a lot of attention in impact investing given to profit-
driven social enterprises, Pay for Success mobilizes capital primarily 
for nonprofits like NFP--classic human-service organizations that have 
long survived by scrapping together donations in annual development 
drives, securing government contracts, or both to keep the doors open 
and services running.

By enabling these organizations to access upfront, patient, and 
flexible capital, Pay for Success builds a pathway to scale for an 
entire sector doing incredible work that has been historically 
overlooked by the capital markets. Additionally, in a Pay for Success 
project, there is a direct connection between every project stakeholder 
and tangible human impact. Success is measured based on the life 
outcomes of individuals--healthy births, employment gained, stable 
housing--and these life improvements are the source of financial 
returns.

Against this backdrop, increased federal participation could mark an 
inflection point, spurring growth for Pay for Success and for the 
services it supports. This legislation would help solve the so-called 
``wrong pockets'' problem, in which the value of a given program is 
dispersed across different levels of government, stalling funding even 
for programs with proven effectiveness. For example, if a particular 
state agency is expected to bear the brunt of the costs of a 
preventative program, but sees little benefit in their budget's bottom 
line, there is little incentive to implement that program. Any social 
issue where a federal program pays for services, such as Medicaid, will 
require a federal commitment to pay for outcomes when savings and value 
are realized.

Social Finance's work with NFP in South Carolina led the state to apply 
for a waiver from the Centers for Medicare and Medicaid Services (CMS) 
to access the federal portion of Medicaid funding--in essence solving 
the ``wrong pockets'' problem that the project would have otherwise 
encountered. This legislation would streamline the process of solving 
this challenge for projects throughout the country.

We believe Pay for Success holds tremendous potential to address some 
of our most pressing social issues, and we believe that government can 
and should be more innovative in its approach to solving society's 
greatest challenges. Passage of the Social Impact Partnerships to Pay 
for Results Act, H.R. 5170, is an important step towards that goal.

Sincerely,

Tracy Palandjian
CEO and Co-Founder, Social Finance
Co-Chair, U.S. Impact Investment Alliance

                                 ______
                                 
                  Third Sector Capital Partners, Inc.

                    200 Clarendon Street, 44th Floor

                            Boston, MA 02116

                         www.thirdsectorcap.org

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

Re: Committee hearing: ``Can Evidence-Based Practices Improve Outcomes 
for Vulnerable Individuals and Families?'' held on May 10, 2016

Dear Chairman Hatch, Ranking Member Wyden, and distinguished members of 
the U.S. Senate Finance Committee:

Across the United States, communities continue to struggle with 
persistent challenges like homelessness, chronic and preventable 
diseases, and lack of access to education, and people cycling in and 
out of prison. These challenges represent immense social and financial 
costs--both to governments and taxpayers.

On April 27, 2015, Senator Orrin Hatch (R-UT) and Senator Michael 
Bennett (D-CO) introduced the Social Impact Partnership Act (S. 1089), 
a bipartisan bill that aims to achieve better outcomes for social 
service program beneficiaries and taxpayers. The bill directs resources 
to states and local communities to support innovative public-private 
partnerships in an effort to tackle social and public health challenges 
and establishes a new system for a smarter and more effective use of 
tax dollars. Under the bill, the federal government would establish 
desired outcomes to pressing social issues that, if achieved, would 
measurably improve lives.

Third Sector Capital Partners, Inc., a nonprofit advisory firm, 
supports the Social Impact Partnership Act because it demonstrates the 
federal government's commitment to leverage administrative data, 
private funding, and rigorous evaluation to achieve measurable 
outcomes. We strongly urge the Committee to garner robust support for 
the Social Impact Partnership Act to bolster social sector innovation 
and to motivate the federal government to shift to outcomes-oriented 
approaches when serving our nation's most vulnerable populations.

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