Using pay for success to improve outcomes for transitional youth

Transitional youth are young people ages 16 to 24 who leave foster care without being adopted or reunited with their biological families and/or who are involved in the juvenile justice system–around 15 percent of the total foster care population in 2016. With childhoods often marked by trauma and a lack of stability, transitional youth face poor outcomes across many areas of life.

From August 2017 to July 2018, the Urban Institute convened a community of practice of researchers, practitioners, and state and local government officials to understand the outcomes, funding, and programming landscape for transitional youth. The community of practice used the knowledge from these conversations to assess whether and how pay for success (PFS) might help address challenges for programs and organizations serving this population. Our new brief, “Improving Outcomes for Transitional Youth,” summarizes insights drawn from the community of practice and provides recommendations for local governments, service providers, and other partners considering PFS as a tool for financing interventions serving transitional youth.

What are the challenges in serving transitional youth?

Compared with their peers, transitional youth experience higher-than-average rates of mental illness and interactions with the criminal justice system. Transitional youth also face greater obstacles to completing postsecondary education, obtaining and maintaining employment, and securing stable housing. Further, youth in foster care tend to come from populations that are already vulnerable. Children of color are placed in foster care at higher rates than their white peers; children under five constitute almost 40 percent of the foster care population; and the proportion of youth in care who identify as LGBTQ is nearly twice that of youth not in care.

Transitional youth can often face a sudden drop-off in services once they leave foster care or exit the juvenile justice system. While there are several federal funding streams serving transitional youth, community of practice members described how braiding funding from a multitude of sources to comprehensively serve transitional youth can constitute a significant bureaucratic burden on government agencies and nonprofits. This may leave youth with clear gaps in services once they leave care.

Additionally, transitional youth are often involved in multiple systems and several agencies. This can create a disproportionate burden on one system to fund services for transitional youth. The Annie E. Casey Foundation estimated that the United States could save over $4 billion if transitional youth had rates of high school completion, early parenthood, homelessness, and incarceration similar to their peers who were not in foster care.

How can pay for success help?

PFS may provide an opportunity to address some of the challenges transitional youth face and the difficulties in serving them. For example, PFS can help scale or implement new programs to fill the gaps in services that support youth once they age out of foster care or leave the juvenile justice system. Further, because transitional youth are frequently involved in multiple systems, PFS may increase efficiency by distributing the end payments among multiple agencies, since each would benefit better outcomes. We recommend PFS partners identify the government entities that would benefit directly from a successful PFS project serving transitional youth to pay more efficiently for services and remove the disproportionate financial burden on any one agency.

Several state and local governments have already developed or are considering PFS projects targeting transitional youth or similar populations. Colorado has recently launched three PFS projects that aim to improve outcomes for youth in foster care or involved with the criminal justice system. Marion County, Oregon and Tulsa, Oklahoma have both also explored PFS as a viable funding mechanism for programs that target transitional youth.

What considerations should stakeholders interested in using PFS to serve transitional youth keep in mind?

While our research suggests opportunities for PFS to help fund programming for this population, there are also important challenges and considerations that inform the feasibility and planning process for a successful PFS project serving transitional youth. For example, differences in PFS stakeholder priorities can make consensus difficult, which is why outcomes should be transparent, collaborative, and include youth voices to help partnering jurisdictions and organizations determine which outcomes are important to their community. Additionally, the evidence base on programs specifically tailored for transitional youth is relatively limited. Partners could adapt an evidence-based program originally meant for a different or broader population for use in a PFS project serving transitional youth. In this way, PFS could be used as a vehicle to evaluate a promising program for transitional youth currently lacking a rigorous evidence base.

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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.