There is an emerging consensus across the political spectrum that investing in the prevention of social problems has a greater impact and is more cost effective than spending on the symptoms of social problems. However, investments in prevention face many challenges and have not met the pace or scale desired by those working against social problems. On-the-ground practitioners are understandably frustrated as they see powerful opportunities go underinvested.

As a recommendation of the Manitoba Social Enterprise Strategy, this report presents a model for a publicly financed pay-for-success investment fund, specifically designed to invest in innovative, preventive initiatives. Centrally located in the provincial government, the fund would be in a unique position to find cross-departmental opportunities. The fund would be a revolving fund, meaning the savings it creates for departments through its investments would replenish the fund. The result would be greater resources towards prevention, at a scale much greater than the status quo.

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Recommendations and Key Findings

• Without significant leadership and structural change, Manitoba is unexpected to shift course towards greater investment in prevention and to reduce demand for acute care.
• There are persistent structural and inherent challenges to investing in prevention that have limited the investment opportunities within the current departmental-agency system of government.
• Publicly financed Pay-for-Success (PFS) can be used to overcome challenges limiting investment in prevention.
• A revolving fund structure could act as an effective internal investment mechanism for PFS projects, being replenished through contracted outcomes payments with commissioning ministries to grow and redeploy resources towards prevention.
• Such a new entity would need independence by being outside a specific agency or human services department in order to prevent political motivations from disrupting a focus on financing the most promising interventions.
• Manitoba has a successful history of using independent entities such as crown corporations and the Crown Corporations Council that can meaningfully inform implementation.
• There are budding centers of activity within Manitoba that could act as a natural starting point for a Special Purpose Office to manage the revolving fund, but to overcome wrongpocket challenges it should be centrally located.
• This Special Purpose Office should start with a narrow focus on some sectors and grow to consider other sectors as it develops a track record; high priority sectors were identified as thematic starting points for financing activity, namely:
  • High-risk recidivism and rehabilitation
  • Employment and labour market attachment

For a snapshot of the report please review the report summary prepared by Darcy Penner, Social Enterprise Policy & Program Manager with the Canadian CED Network, and approved by both authors.

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Table of Contents

Acknowledgements
Recommendations and Key Findings
Introduction
Challenges to Preventive Investment
Pay for Success to Enable Prevention
The Opportunity for Publicly Financed Pay-for-Success
How publicly financed PFS resolves challenges of private PFS
A Revolving Fund for Manitoba
Conclusion
Appendix A: Canadian Pay-for-Success
Bibliography