Senator Curren D. Price, Jr., (D-Los Angeles) introduced legislation Monday that would establish the California Office of Social Innovation and Entrepreneurship to serve as a central portal for new ideas and solutions to address California’s most pressing social problems.
“California is currently facing numerous intractable public policy problems that affect the quality of life of its residents and will have a devastating impact on the future of the Golden State,” said Senator Price.
“We have been dormant in generating solutions that would reduce homelessness, improve delivery of critical health care and reform our criminal justice system, and inaction has only exacerbated these problems,” said Senator Price. “It’s essential that we create private- public partnerships to leverage our limited resources.”
In addition to serving as the State’s “Situation Room” to bring new solutions to solve critical social problems, this office will also facilitate the use of “Social Impact Bonds (SIBs) to provide funding to address these social problems. SIBs, commonly referred to as “pay for success bonds,” are innovative financing tools that use private investor funding to pay for social programs.
SIBs are managed by nonprofit organizations on behalf of government agencies, but are not government-backed like traditional government bonds. The state will pay the nonprofit a return for reaching specific performance goals. If the performance goals are not met, the investor does not receive a positive return on his/her investment.
SIBs were most recently used successfully in New York City by Mayor Michael Bloomberg.
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