New issue briefs on Pay for Success

Rachel Levy and Emily McKelvey October 23, 2020

We are excited to announce the launch of a series of 10 issue briefs on Pay for Success (PFS) to provide practical guidance and examples for government officials interested in pursuing PFS within their agency or jurisdiction. Our work is supported by funding from the Robert Wood Johnson Foundation to promote cross-sector alignment to better serve people and communities.

The series addresses common questions about PFS and highlights our lessons learned after a decade of working to pioneer PFS in the U.S. Each brief serves as an introduction to a different element of PFS, from understanding whether it is a good fit for the problem at hand (Brief 3), to selecting project outcomes (Brief 5), to managing performance post-launch (Brief 9). The briefs are sequenced so that when read from start to finish, they provide a complete overview of the PFS project development and management process. However, they may also be used as standalone resources for those who would like to learn more about one or more specific elements of PFS.

Today, we’re focusing on the first three briefs in the series, which fall under the umbrella of exploring PFS. Taken together, we hope these three briefs will provide a solid foundation for understanding PFS and its potential applications within your own jurisdiction.

EXPLORE PFS: BRIEFS 1-3
  • Brief 1: Introduction to Pay for Success
    Pay for Success as a mechanism for directing funding toward outcomes.
  • Brief 2: The Pay for Success Toolkit
    An overview of Social Impact Bonds, Outcomes Rate Cards, and Career Impact Bonds.
  • Brief 3: Assessing Pay for Success Project Fit
    Criteria to help decide if PFS is the right tool for the problem at hand.

“Brief 1: Introduction to Pay for Success” highlights some of the barriers governments face in directing more funding towards outcomes rather than services, and provides an overview of PFS and the ways in which this tool can help to overcome those barriers.

“Brief 2: The Pay for Success Toolkit” offers clarity on a common question we receive from government partners: “What is the difference between Pay for Success and a social impact bond?” The answer: a social impact bond is one type of PFS mechanism, but many other models exist. While Social Finance began its PFS work in 2011 with a focus on the social impact bond, we have expanded our toolkit over the course of the last decade to include updated versions of outcomes-based funding tools that apply to different contexts. In this brief, we provide an overview of three types of PFS tools that we frequently use at Social Finance—social impact bonds (SIBs), outcomes rate cards (ORCs), and career impact bonds (CIBs). Each of these tools has in common a core set of principles that underlie all PFS projects: a focus on clearly defined outcomes; decisions that are rooted in data; cross-sector partnerships; have strong governance and accountability; and, at times, catalytic capital for impact. The brief also includes a “fit checklist” to explain when each tool is most applicable and includes project examples:

  • The Oklahoma Women in Recovery SIB, which expands an intensive outpatient alternative to incarceration in order to reduce the number of women sent to prison and the resulting impact of incarceration on their families;
  • The Connecticut Office of Early Childhood (OEC) ORC, which incorporated outcomes-based funding into home visiting contracts in order to improve birth outcomes, reduce child maltreatment, and increase caregiver education and employment; and
  • The General Assembly CIB, which aims to expand access to industry-recognized IT training and wraparound support services to people who face barriers to education and employment.

Finally, “Issue Brief 3: Assessing Pay for Success Project Fit,” lays out criteria jurisdictions can use to decide whether PFS is the right fit for the problem at hand. These criteria include a defined target population; clearly defined outcome measures; a promising intervention; a proven service provider(s); a program that creates positive value to society; and community and payor engagement. The brief includes examples of key questions to aid readers in understanding whether a proposed PFS project meets the criteria above, along with an example of how the screening criteria were applied in practice when assessing the viability of using PFS to scale Nurse-Family Partnership home visiting services for first time, low-income mothers in Florida.

Download the briefs >>

Read our post on launching a PFS project >>

Read our post on managing a PFS project >>