The possibility for pay for success in bail reform

The pretrial detention system is under national scrutiny as reports and research on its shortcomings are gaining traction. Recently, the courts in New Jersey released a report on their pretrial detention reform, announcing a 20 percent decrease in the pretrial jail population in the past year. In March, Maryland Attorney General Brian Frosh and Jeremy Travis of the Laura and John Arnold Foundation presented to state attorneys general on innovations around the nation that aim to eliminate or reduce the use of cash bail and improve the decision-making process for pre-trial release evaluations. Could pay for success (PFS) be used as a financial tool to improve the efficiency and fairness of these public systems?

Gloria Gong, director of research and innovation at Harvard Government Performance Lab, explored the concept, pointing out that significant overhauls of bail systems, such as those recently undertaken in Maryland and New Jersey, are costly, and innovative financing mechanisms can be an option for jurisdictions seeking to reform their own bail systems. For example, the one-year report on criminal justice reform prepared for the New Jersey governor and state legislature warned that the new system is “simply not sustainable” and faces a “substantial annual structural deficit.”

Pay for success (PFS) can specifically help address the “wrong pockets problem”—in which the entity paying for services is not receiving proportionate benefits, meet a demand for improved services and innovative thinking, and make a data-driven case for sustained funding in the bail industry.

• Wrong Pockets. The bail system in New Jersey relies on court fees rather than the state budget for funding. The courts’ report warns that this is unsustainable, and Gong also makes the case that this funding structure suffers from what is known as the wrong pockets problem. As the court system absorbs the cost of the new system, Gong notes that other sectors that should be accountable, such as health care and housing, are not, and individuals are not getting the best services possible.
• Better Services. Part of what makes reforming the bail system complicated is that often, simply keeping people out of jail does not solve the whole problem. To reduce the number of people in jails and lower recidivism rates, wraparound services such as healthcare and housing are often necessary. Pay for success has tackled such multi-dimensional projects and offered interventions that deliver various services in tandem. For example, Santa Clara County’s Partners in Wellness Program will provide permanent supportive housing to 250 of the county’s residents with severe mental illness in addition to providing community-based clinical services. Because governments are not putting up the initial capital for a pay for success project, they can be more open to ambitious, multi-sector services.
• Evidence Building. The link between repayments and predetermined outcomes in pay for success suggests that the model could be valuable in building an evidence base for successful bail reforms.

As states like New Jersey and Maryland look to continue funding bail reform and other states look to start funding their own initiatives, stakeholders should consider pay for success a potential option to fund reforms in the bail bond industry.

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As an organization, the Urban Institute does not take positions on issues. Scholars are independent and empowered to share their evidence-based views and recommendations shaped by research. Photo via Shutterstock.