How Pay for Success Works
1. GOVERNMENT identifies a critical social issue with historically poor outcomes such as recidivism, chronic homelessness, or early childhood education.
2. PRIVATE FUNDERS such as foundations, banks and businesses, provide upfront capital to a high-performing social service provider that is helping a specific at-risk target population.
3. SERVICE PROVIDERS deliver services to key at-risk communities, in an effort to reach or exceed predetermined outcomes for success.
4. EVALUATORS rigorously measures outcomes to ensure providers achieve impact.
5. GOVERNMENT repays private funder’s initial investments only if project is successful in achieving positive outcomes.
6. PROJECT MANAGER conducts, facilitates, and advises the overall process. The project manager is sometimes called the Intermediary or Technical Assistance Advisor (like Third Sector).
“Before the Pay for Success contract, some of our programs and staff were bogged down with complying with the terms of grants and contracts. Now, we have more flexibility. Pay for Success allows us to focus our work solely on achieving outcomes for the families we serve.”
–ERIC MORSE: Chief Operating Officer of FrontLine Services