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New Tools to Amplify Impact: A Pay for Success Guide to Building Nonprofit Capacity

Jake Segal, Jeff Shumway, and Jon-Paul Bianchi

Public Sector Solutions, Children & Families, Education

Key Takeaway

This report is an attempt to shed new light on one of the most difficult challenges in the social sector: achieving sustainable funding at meaningful scale. Working with the W.K. Kellogg Foundation and four of their grantees, we explored the question: how can nonprofits prepare themselves—and their data, evidence, and outcomes—for the next generation of government funding? At Social Finance, we believe that far more public resources should flow toward evidence-based, results-driven solutions—and that such resources should be invested at scale, driving meaningful results across communities.


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Making the shift to results-oriented funding requires new investments for nonprofits: investments in program consistency and quality, data systems, evaluations, and performance management. Increasingly, only those organizations with the capacity to credibly articulate their social and economic value to government decisionmakers will receive meaningful government funding. This report explores how four nonprofits, all funded by the W.K. Kellogg Foundation, approach this coming shift, and applies the principles of Pay for Success to each in order to help them prepare for growth via outcomes-oriented government funding streams.

Performance-based funding in its own right is important. But directing that funding to organizations with the best evidence and ability to grow‒to what works‒is better still.

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