New Pay for Success approach will help communities get #RateCardReady to deliver meaningful, sustainable results
February 7, 2017 – Boston, MA –Social Finance today announced the Outcomes Rate Card Development Competition which will position governments and nonprofit organizations at the forefront of innovation in outcomes-based policymaking. Outcomes rate cards scale solutions to society’s most pressing challenges by standardizing the Pay for Success contracting approach. With one outcomes rate card, governments can launch multiple Pay for Success projects, directing resources towards effective social programs.
Outcomes rate cards build on the Pay for Success model by shifting outcomes, pricing, and measurement development to the outset of the project. Through this federally funded competition, selected applicants will work with Social Finance to develop the first outcomes rate cards in the nation.
“With outcomes rate cards, governments will have the opportunity to achieve even greater impact for their communities,” said Tracy Palandjian, CEO and Co-Founder of Social Finance US. “We are honored to host this competition to develop the first outcomes rate card projects in the United States.”
This approach was pioneered in the UK and deployed roughly £60 million, contracted with 21 different service providers, and served over 25,000 individuals across the country in just five years. Social Finance’s sister organization has been an active participant in all three outcomes rate cards developed and released by the national government.
A Promising Approach to Solving Complex Social Challenges
Outcomes rate cards are one approach to developing Pay for Success projects. Pay for Success is an innovative funding model that combines nonprofit expertise, private funding, and independent evaluation to transform how government leaders respond to chronic social problems. Through Pay for Success, private investors provide the upfront funding to scale effective service providers. Government agrees to repay investors if and when the project achieves its desired impact. This shifts the focus from outputs to outcomes, directing taxpayer dollars to programs that work. Over the past six years, over 70 Pay for Success projects addressing chronic social issues have launched in 16 countries worldwide
The Outcomes Rate Card Development Competition is supported by the Social Innovation Fund (SIF), a program of the Corporation for National and Community Service (CNCS). Social Finance was awarded funding as part of SIF’s Round 2 Pay for Success Grants Competition, which seeks to build the pipeline of Pay for Success projects for local governments.
“The Social Innovation Fund is committed to bringing innovative solutions to communities across the country through Pay for Success,” said Lois Nembhard, Acting Director of the Social Innovation Fund. “This competition is a great opportunity for more governments and nonprofits to engage in Pay for Success through outcomes rate cards.”
How the competition works
The open and fair competition launched today will accept applications until April 10, 2017. Social Finance will select up to three applicants to develop outcomes rate cards. Each selected applicant will receive in-kind technical assistance from Social Finance to develop an outcomes rate card, to issue an RPF to procure for service providers, and to launch the resulting Pay for Success projects.
More information on outcomes rate cards can be found on Social Finance’s website.
About Social Finance
Social Finance is a 501(c)(3) nonprofit organization dedicated to mobilizing capital to drive social progress. We believe that everyone deserves the opportunity to thrive, and that social impact financing can play a catalytic role in creating these opportunities. We design and manage public-private partnerships that tackle complex social challenges, such as achievement gaps, health disparities, and prisoner recidivism.
Core to our work is the development of Pay for Success financing, also referred to as Social Impact Bonds. An innovative funding model, Pay for Success helps to measurably improve the lives of people in need by driving government resources toward better, more effective programs. Our sister organization, Social Finance UK, was founded in 2007 and launched the world’s first Social Impact Bond in 2010.
About the Social Innovation Fund
The Social Innovation Fund (SIF) is a program of the Corporation for National and Community Service (CNCS), a federal agency that engages millions of Americans in service through AmeriCorps and Senior Corps, and leads the nation’s volunteering and service efforts. The SIF fosters public and private collaborations to identify and support sustainable solutions that make a significant impact in transforming communities. For more information, visit NationalService.gov/Innovation