New VA – CNCS Collaboration to Connect Funding to Better Outcomes for Veterans

Every Veterans Day, we pause to reflect on the tremendous service and sacrifice that the men and women of the Armed Forces, as well as their families, make during their tours of duty.  We also know that, for many who have served, new challenges may face them when they return home. 

For some veterans, that struggle may include finding and keeping a good job – a challenge that can be even more difficult for veterans with a service-connected disability, including Post-Traumatic Stress Disorder (PTSD). 

We have an absolute obligation to help our veterans find jobs with an effort that is worthy of their sacrifice.  And this Administration has made major strides on veteran employment in the past eight years:  We have comprehensively redesigned the Transition Assistance Program, to ensure servicemembers separating from active duty are better prepared for civilian employment.  We have identified successful strategies for reducing barriers to civilian employment caused by restrictive state licensing requirements.  And through the Joining Forces Initiative launched by the First Lady and Dr. Biden, more than 850,000 veterans and military spouses have been hired by Joining Forces-allied companies.

These efforts are paying off – the unemployment rate for veterans has been cut by more than half during this Administration, from a high of 9.9% in January 2011 down to 4.3% last month. 

But we know there is more work to do to make sure that all of our nation’s veterans have access to good-paying jobs, including veterans with a service-connected disability.  So today, we are announcing new steps to promote better employment outcomes for veterans with PTSD. 

The Department of Veterans Affairs (VA) and the Corporation for National and Community Service (CNCS) are jointly funding an innovative new approach called Pay for Success to promote better employment outcomes for veterans with PTSD.  Many programs pay for services – for instance, to provide training to a specified number of people.  The Pay for Success approach instead pays for outcomes – for example, the number of veterans who can be placed in good-paying jobs that they keep over time. This model recognizes that when it comes to providing employment services for veterans, what’s most important is not just how many people we serve, but whether those services help them get and keep good jobs.   

In FY 2014, Congress gave the CNCS Social Innovation Fund unique authority to advance the Pay for Success model.  As a result, the Social Innovation Fund has become a leading driver of the model, enabling local and state government as well as federal agencies to advance an approach to funding that is accountable for outcomes. Given their mission to find and support the best, most effective solutions for veterans, the VA Center for Innovation (VACI) and Vocational Rehabilitation & Employment (VR&E) program saw an opportunity to collaborate to advance a shared mission with the CNCS Social Innovation Fund.

Here’s how the collaboration will work.  Instead of paying up front for services, VA and CNCS will pay only once veterans have found and maintained employment over time.  Non-governmental impact investors will provide funding to cover the upfront costs of the program.  If the services indeed work as expected, the federal government will pay back those investors.  Should the services fall short of improving employment outcomes for these veterans, the federal funding that was set aside for this program may instead be repurposed for other veterans’ programs. 

By paying only for results, we can target the most effective use of federal dollars while driving service providers to identify the most effective possible models for improving disabled veteran employment outcomes. And because funds are contingent on, among other things, completion of an independent evaluation, this program will deepen our understanding of how best to serve disabled veterans while encouraging an outcomes mindset in government and service providers.

To carry out this first-of-its-kind grant, VA and CNCS have selected the nonprofit Social Finance and a group of dedicated partners.  These partners will also secure one-to-one matching funds for the project. There is great reason for hope that this program will in fact drive positive employment outcomes for veterans. Individualized Placement and Support – the intervention that will be provided to veterans through this initiative – has shown positive results in nearly two dozen rigorous evaluations.  One study specifically examined the effectiveness of this approach for disabled veterans with PTSD and concluded that program participants achieved both higher employment rates and higher wages. 

This effort also embodies our all-of-government approach to serving veterans.  It represents a unique partnership between the VA and CNCS, demonstrating that, when we break down siloes to help agencies work together, we can accelerate progress on our biggest priorities.

Not just today but every day, we must honor the depth of our veterans’ service to this country by standing with them when they get home.  We salute VACI, VR&E and the CNCS Social Innovation Fund for their leadership in finding new and innovative ways to provide disabled veterans the employment support they have earned and deserve.

Matthew Colangelo is the Deputy Director of the National Economic Council and Deputy Assistant to the President for Economic Policy.