City Council approves initative to pay back donors for helping homeless

AUSTIN (KXAN) — City leaders believe a new initiative will help tackle homelessness in Austin — without the risk.

The new initiative is based on a ‘pay-for-success’ model.

Private investors and donors would front money for citywide housing and mental health services, targeting Austin’s most vulnerable.

“That can be a counselor, it can be a nurse, it can be some treatment if they’ve got an illness,” said Ann Howard, Executive Director of the Ending Community Homelessness Coalition.

The city and other entities would pay back those investors, but only if the programs are successful.

The city has $6 million in reserves for the program thus far. Other government entities would be ready to pitch in as well.

“It really shifts the risk, from government always having to pay for programs, not sure of what exactly sure of what works,” said Howard.

Success is defined by metrics, like reduced jail visits for that individual receiving services.

It seems like a risk for donors, but St. David’s Foundation has already put up $4 million.

“We actually feel like it’s the perfect role for philanthropy, to be an early supporter of these innovative models,” said Becky Pastner with the foundation. “We’re full believers.”

Earlier this week, KXAN reported that homelessness in the city increased five percent over the last year, although there are fewer young people and veterans who are homeless now.

City leaders are hoping to raise $16 million for the five-year program but say they already other interested donors.

“We’re very excited and very confident that when our community comes together, we can tackle big things,” said Pastner.

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