The Unique Value of PFS for Asia
The Pay for Success (PFS) movement has spread to countries around the world. Each country has done PFS for slightly different reasons. For example: in the United Kingdom, PFS has generally angled as a way to get ‘more for less’, whereas in the US, PFS has been viewed by many as a way to test and scale up innovative social programs.
I grew up in Singapore and Hong Kong, and have spent the past two years executing PFS projects around the US. I believe that PFS could provide a unique value proposition to Asian countries.
- PFS engages the community in a high-impact manner. Over the last two decades, a wealthy Asian philanthropic class has emerged. These philanthropists are searching for measurable and sustainable ways to create social change. PFS offers a high-leverage way for philanthropists to deploy their resources.
- PFS spurs social innovation within government priorities. In many parts of Asia, especially developed East Asia, government has often been both the primary funder and deliverer of social services. PFS offers a way for governments to continue providing funding for outcomes, while freeing up innovation in delivery to third parties. PFS hence enables more ground-up flexibility to achieve outcomes.
- PFS creates capacity in the overall impact ecosystem. The data, impact evaluation, and impact investment ecosystem is nascent in many parts of Asia. This is sometimes cited as a reason not to do PFS. However, it is really a reason not to do PFS in a ‘cookie-cutter’ form, and instead to find a more incremental model to fit the Asian context. Adapted correctly, PFS provides a buyer of these critical services and improves technical capabilities in these players, which benefits the overall social service ecosystem in the long run.
Of course, Asia is a large and diverse continent. The PFS model will need to be carefully adapted between developed vs developing countries to account for each country’s outcomes funding, cultural, and service provider context. I was excited to learn recently about projects in Japan and Korea that are being developed, and recently co-wrote an article exploring potential PFS projects in Singapore.
I am looking forward to seeing whether PFS can live up to its potential in this new frontier. In addition, given our hard-earned experience adapting the PFS model to various jurisdictions in the US, I sincerely hope that Third Sector can be of help in the search for the right model for the Asian context.