The Intersection of Impact Investing and Pay for Success

By Joe Gayeski and Mary Beech Pay for Success (PFS) is one way local and state jurisdictions can address pressing social issues in their communities. By integrating data and building rigorous evaluation into government contracting, PFS can reward social services that demonstrate measurable impact. To make this possible, PFS leverages private capital. The model’s innovative [...]

Third Sector's Pay for Success projects in Cuyahoga County, Ohio, Santa Clara County, California, and the Commonwealth of Massachusetts were featured in Stateline, a daily report on state policy from the Pew Charitable Trusts. Co-founder and Co-President Caroline Whistler is quoted, The bonds are meant to foster creative solutions to entrenched social problems, with an [...]

Pay for Success (PFS) projects call for an ongoing dialogue with multiple community stakeholders. Two PFS feasibility studies, supported through grants from the the Corporation for National and Community Service's Social Innovation Fund, are underway in Washington State: Department of Early Learning and Thrive Washington study, and Health Care Authority study. To begin this dialogue [...]

The Alliance for Children and Families launched Disruptive Forces in Action to showcase the innovative ways its members and others in the sector are harnessing the six forces introduced in its 2011 report, Disruptive Forces: Driving a Human Services Revolution. In its case study of Attracting Investors, Not Donors, Alliance member Hillside Family of Agencies and issue expert Third Sector Capital Partners, Inc. discuss Pay for Success, an emerging funding model that unites nonprofits, government, and philanthropic and corporate investors around achieving a social return on investment.

Hillside has partnered with Third Sector

In December 2013, The California Endowment funded the National Council on Crime and Delinquency (NCCD) and Third Sector Capital Partners, Inc. (Third Sector) to conduct a feasibility study on restorative community conferencing (RCC) to better understand its potential to be used in a Pay for Success (PFS) project. RCC shows promise as an intervention that could be scaled through PFS given its preventive focus and the promising initial outcomes of youth served through RCC.

NCCD and Third Sector focused their feasibility analysis on Alameda County, California, where the Community Works West

The Salt Lake County Pay for Success Initiative has released two Requests for Proposals from qualified non-profits to provide comprehensive services that can improve criminal and other relevant outcomes for high-need populations. The two proposals are focused on criminal justice/recidivism and child/maternal health. Since 2014, the County has been working to assess the viability of implementing Pay for Success projects in the County. In January, Mayor Ben McAdams announced the selection of three issue areas to move forward with Pay for Success contracting: child/maternal health, criminal justice recidivism, and homelessness.

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