April 19, 2016
Nonprofit Finance Fund (NFF) has released a comprehensive free report on the first 10 Pay for Success (PFS) projects that have launched in the United States. This report details how and why communities have applied this new approach to address critical social issues including early childhood education, homelessness, and criminal justice and recidivism. Pay for Success is an approach to contracting that ties payment for service delivery to the achievement of measurable outcomes. In the U.S., all of the current PFS projects have been accompanied by a form of social innovation financing, often referred to as a Social Impact Bond, in which investors provide upfront financing for the delivery of services and are repaid only if the services achieve a pre-agreed upon set of positive outcomes. The report includes a series of comparative graphics and observations on the market's development to-date. It examines project goals and project design; the partners and stakeholders involved; the underlying data, evidence, and evaluation plans; the governance and investment structures, including repayment terms and investor profiles; and project costs. To create the report, NFF drew on experience as a PFS educator, partner, and investor and conducted research using project documentation, publically available information, and stakeholder interviews. Over the past five years, NFF has conducted more than 200 PFS trainings, presentations, webinars, workshops, and convenings across the country for service providers, governments, and investors. NFF also manages the Pay for Success Learning Hub, www.payforsuccess.org, the leading national repository for education and information on Pay for Success. NFF's work on the report was made possible with the support of the Corporation for National and Community Service's Social Innovation Fund (SIF).