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. These tools center on four core principles:
Data-driven decision making
Strong governance and accountability
Applying Pay for Success
Pay for Success is applied across the public, private, and nonprofit sectors. From helping governments efficiently allocate taxpayer dollars to programs that better serve constituents to leveraging funds from impact investors to scale effective interventions that build community resilience, Pay for Success encapsulates a range of approaches, all designed to accelerate social change.
Pay for Success Tools
For more than a decade, practitioners have been developing, deploying, and refining a suite of Pay for Success tools, which include:
|Funding Reallocation||Outcomes-Based Contract||Outcomes Rate Card||Prevention Fund||Social Impact Bond||Career Impact Bond|
|Payor uses data collection and analysis to redirect existing funds to more effective interventions or service providers.||Payor contracts for outcomes, metrics, and pricing, fully or partially based on outcomes.
Includes data measurement and engagement.
|Payor specifies outcomes, metrics, and pricing, fully or partially based on outcomes.
Available to multiple providers.
|Philanthropic funders provide capital with no repayment.
Agree with public or private payor to reinvest outcomes payments into ongoing preventive intervention.
|Private funders provide capital at full cost of services.
Payor agrees to repay funders plus interest if outcomes are achieved; pays little or nothing if outcomes are not achieved.
|Private funders cover upfront training costs for students.
Students repay fees, based on outcomes.
Funders and training providers are made whole, based on outcomes.
What is a Social Impact Bond?
The Social Impact Bond is a unique public-private partnership that funds effective social programs through outcomes-based contracting. The Social Impact Bond enables governments to achieve results for communities by bringing impact investors and quality service providers together to tackle specific social challenges. Learn more >>
What is a Career Impact Bond?
The Career Impact Bond is a student-centered financing model that expands access to career training to people who face barriers to education and employment. Learn more >>
What is an Outcomes Rate Card?
An Outcomes Rate Card is a contracting and procurement tool that enables governments to select and allocate funds toward positive social outcomes through service provider bonus payments. Learn more >>
The History of Pay for Success
The Pay for Success movement began more than 10 years ago when Social Finance U.K. developed the world’s first Social Impact Bond. Since then, practitioners across the globe have launched more than 180 Social Impact Bonds in 32 countries. These projects have mobilized more than half a billion dollars to address entrenched social issues that are incredibly difficult to tackle through traditional social program funding approaches.
In recent years, Pay for Success has evolved beyond the Social Impact Bond to incorporate a host of new tools, including the Career Impact Bond (CIB), the Outcomes Rate Card (ORC), the Environmental Impact Bond (EIB), and the Development Impact Bond (DIB).
We wish to acknowledge Nonprofit Finance Fund (NFF) for developing and maintaining payforsuccess.org from 2010-2021. Find NFF’s Pay for Success and other outcomes-related resources >>