In this Stanford Social Innovation Review article, Social Finance’s Jeff Shumway and Jake Segal and Bridgespan’s Michael Etzel outline how Pay for Success (PFS) programs can aid in changing government funding structures for social services. The authors provide recommendations that governments should take into consideration when planning PFS projects. These practices include implementing longer-term contracts, budgeting wisely, focusing on outcomes, pricing effectively, utilizing data, and creating innovative financing solutions.
PFS took root as an innovation in nonprofit finance, but its biggest benefit will come from helping governments revamp the way they spend public money on social programs.
An Introduction to Pay For Success
Pay for Success is a set of innovative outcomes-based financing and funding tools that directly and measurably improve lives by driving resources toward results. Watch this video overview.