Brief

Ending Family Homelessness

The number of American families that are, or are at risk of becoming, homeless or housing insecure remains stubbornly high. The problem persists, not due to lack of solutions, but for two primary reasons: political will and artificial budget divisions. The pay for success (PFS) model for financing public services offers an opportunity for state and local governments to help overcome these hurdles. This paper considers this potential.

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More Than Cost Savings

A popular benefit of the pay for success (PFS) model is its potential to finance programs that, if successful, will save governments more than they cost. But in practice, this limits the number of programs eligible for PFS. It also incorrectly assumes that most governments place little value on the non-fiscal benefits. With this reality in mind, this paper outlines a holistic framework that integrates potential fiscal and non-fiscal benefits, providing policymakers with clear and simple criteria when considering PFS projects.

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Practical Considerations for Pay for Success Evaluations

Evidence is at the core of the pay for success movement, which pushes government to rigorously evaluate programs and pay only for those that achieve positive outcomes. Evidence, however, is only as good as the evaluation that produces it. As such, evaluators are an integral part of any PFS project, from beginning to end. In these projects, the evaluator implements activities that assess program outcomes in order to determine success payments from government to investors. Evaluators should be engaged early in PFS project development.