Urban Institute
Research Assistant

Future of PFS: A PFSI resource for the pay for success field

July 6, 2017 - 3:42pm

Pay for success (PFS) is still a relatively new model. There is no cut-and-dry “how-to” guide for engaging in PFS; the process can differ for every jurisdiction, depending on a number of variables such as the overall “PFS-readiness” of the stakeholder organizations and the topic area chosen. Furthermore, taking certain steps, such as having subject-matter expertise at the table early on, can help streamline a usually complex process that can be hindered by financial constraints or simply because stakeholders are unaware of such steps.

In response, the Pay for Success Initiative (PFSI) launched its Ask an Expert tool on our website where PFS stakeholders can submit their PFS questions. In tandem, we hosted an interactive event with the same goal for attendees of our National Symposium on the Future of Pay for Success, many of whom are actively engaged in PFS exploration and feasibility. Providing everyone the opportunity to ask questions about PFS process and topic areas can ideally inform and actively move forward PFS efforts in communities nationwide.

The “Ask an Expert” breakfast at the Symposium featured seven experts across four Urban policy centers, and covered topics ranging from the PFS project assessment tool to the opioid crisis to early childhood education. For example, PFSI’s Research Manager, Matt Eldridge, received the following question from a Symposium attendee: Can PFS be used to build the evidence for an intervention model in order to secure sustainable political and financial support? We’ve provided his response below.

“In practice, there are a number of potentially effective innovative interventions that are unfunded or underfunded because limited public resources continue flowing to existing interventions. Both sets of interventions may have limited evidence of effectiveness but newer approaches carry greater perceived political risk for government than the status quo. For innovative service providers, this leads to a chicken or the egg problem: convincing government to fund something often requires evidence that that something new works (better), but without funding, generating that evidence is challenging. PFS enables innovative approaches to secure funding by shifting the risk to an external investor and generating evidence of effectiveness through a project-funded evaluation of the intervention's impact. In this way, the PFS model can help innovative ideas, if proven effective, break through the status quo and secure sustainable funding.” 

As a resource for the field, we’ve received questions ranging from the legal—“How does a special purpose vehicle work?”—to the programmatic—“Which preschool interventions could be a good fit for PFS?”—to the financial—“Are there any PFS funding opportunities currently available in Michigan?” If you are currently engaged in a PFS effort, or are interested in pursuing pay for success, we encourage you to reach out to us with your PFS-specific questions. The PFSI team and affiliated researchers will respond within three business days. We hope that the “Ask an Expert” web feature will continue the rich conversations at our Symposium, and make the expertise of Urban researchers more accessible to PFS practitioners in the field. 

To read the first blog in our series, click here.

This is the second blog in our Future of PFS blog series.

On June 22nd and 23rd, 2017, the Pay for Success Initiative hosted a National Symposium on the Future of Pay for Success in Washington, D.C. The invite-only Symposium brought together leaders from government, nonprofits, and organizations active in pay for success to consider the big questions facing the field, as well as highlight lessons for engaging in PFS efforts. More information on the Symposium can be found here.

Over the next several months, the Initiative will be releasing a series of blogs highlighting important conversations, themes, and questions that arose during the Symposium. To join the conversation, visit pfs.urban.org, follow @UrbanPFSI and #FutureofPFS on Twitter, and subscribe to our monthly newsletter.

Have a Pay for Success question? Ask our experts 

As an organization, the Urban Institute does not take positions on issues. Scholars are independent and empowered to share their evidence-based views and recommendations shaped by research. Photo via Shutterstock.