SIPPRA Convening Looks to Future of Pay for Success

Last Thursday evening, government leaders, service providers and impact investors gathered in one of the largest meeting rooms in the Capitol to celebrate the Social Impact Partnerships to Pay for Results Act (SIPPRA), the historic federal Pay for Success legislation passed earlier this year.

Speakers throughout the event talked about its bipartisan appeal and support, uncommon praise for recently enacted legislation. Republican Senators Orrin Hatch (R-UT) and Todd Young (R-IN) spoke about the need to get better results for the government dollars we’re spending while Dave Wilkinson, the Commissioner of the Connecticut Office of Early Childhood and former director of the Office of Social Innovation under President Barack Obama, talked about the potential impact on our communities of moving government spending towards outcomes and results.

Bipartisan interest and national legislation has enabled agencies to use Pay for Success to fund the achievement of better outcomes, from the Every Student Succeeds Act to the Workforce Innovation and Opportunity Act. By our count, federal dollars have supported close to 100 feasibility studies or Pay for Success projects in development in two dozen states.

SIPPRA takes this support to the next level. It appropriates $100 million to support state and local governments’ Pay for Success initiatives. These projects will be designed and shaped by local governments and can address a range of priority issue areas, including child welfare, family stability, education, health, employment, recidivism, and veterans. The US Department of the Treasury will run a national competition in early 2019 to select proposals for using the funds to support outcome payments, feasibility studies, or project evaluations.

These projects will be critical to helping states and jurisdictions shift towards outcomes-based practices and scale programs that improve the lives of people most in need in their communities. Social Finance is excited to announce our support to state and local governments as they develop projects and apply for funding. We will:

• Provide educational resources for governments learning about SIPPRA and support jurisdictions as they explore potential projects in their community;
• Provide intensive technical assistance to select jurisdictions to help design a shovel-ready Pay for Success project, and apply to SIPPRA for federal funding.

During his remarks last Thursday, Commissioner Wilkinson highlighted his department’s current work with Social Finance in Connecticut to develop outcomes rate cards that improve early childhood outcomes across the state. We have worked closely with Dave and his team to identify the most urgent issues facing the state’s young children and their families and to design and issue a Request for Proposals to procure for service providers with a focus on outcomes such as childhood safety and caregiver employment. This is one example of our work with local jurisdictions to develop projects to improve outcomes for communities.

Social Finance has developed a standardized process to work in partnership with government to create smart Pay for Success designs that meet five principles:

1. Align a government’s objectives with the most effective outcomes-based financing tool, from performance-based contracts to outcomes rate cards to social impact bonds
2. Use data and evidence to match a target populations’ needs with a set of interventions
3. Select outcome metrics that create real human impact, are aligned with a program’s evidence base, are observable and measurable, and generate fiscal and community value
4. Use an evaluation design (e.g., randomized control trial, quasi-experimental, or validation) that aligns with the project’s objectives, is operationally feasible, and is appropriate given the historical evidence base
5. Integrate an active performance management system that uses data to improve results over time as services are delivered

With seven years of experience designing, launching, and managing Pay for Success projects across the country, Social Finance is excited to support jurisdictions that want to take advantage of this historic opportunity.