Government budgets may be shrinking and demand for social services may be growing, but a group of investors and advocates believe they’ve come up with an answer that addresses some of society’s problems and doesn’t cost taxpayers a dime.

They’re called social impact bonds.

The first Connecticut agency to take advantage of the bonds is the Department of Children and Families. Last week, the DCF released a request for proposal to provide “cost-effective services for families involved or at risk of becoming involved in the child protection services system and who are impacted by substance use.”

DCF is working with the Harvard Kennedy School Social Impact Bond Technical Assistance Lab to find investors for the project that will help prevent parents with substance abuse problems from losing their children. By avoiding the cost of a child entering the system, the state saves money and investors will see a return on their investment if that goal is achieved.

“The government commits to paying back investors if outcome targets are achieved based on an independent evaluation. If targets are not met, then the investors do not get repaid,” according to a DCF press release.

DCF Commissioner Joette Katz said the social impact bonds will “enable government to expand services for children and families” and “advances knowledge about how to best serve vulnerable populations.”

The model requires that these programs have measurable results.

“Just as important in our current fiscal climate, they ensure that taxpayer dollars pay only for services that work,” Katz said.

The Human Services Committee will hold a public hearing Thursday on a bill that would create an account the state could use in order to pay out these private investors for making these types of investments. Similar legislation died last year on the Senate calendar, despite a total lack of opposition to the bill on either the Human Services or Appropriations Committee.

New York and Massachusetts are among more than a dozen states that have passed social impact bond legislation.

Prior to the public hearing on the bill, a group of experts on the topic of social financing will gather at the Legislative Office Building at 10 a.m. in room 1C. The list of speakers includes Dr. Jeffrey Liebeman from the Harvard Kennedy School of Government, Janis Dubno of Voices for Utah Children, and Kristin Misner, who helps run the social impact bond program for juvenile offenders at Riker’s Island in New York.

The public hearing begins at 11:30 a.m. in room 2A of the Legislative Office Building.