Pay for success and education

January 19, 2018 - 4:19pm

The ideal pay for success (PFS) project yields societal returns beyond the scope of one single project. And what better way to have a lasting impact than through education?

There are two active PFS projects in the education space. The Utah High Quality Preschool Program provides half-day preschool classes twice a week for 3-year-olds, and four days a week for 4-year-olds who are eligible for the federal free/reduced lunch program. The project, which operates in two school districts in Utah, hopes to increase school readiness and academic performance, and will pay out based on the proportion of children who avoid special education services as a result of the project. In Chicago, Illinois, the Child-Parent Center Pay for Success Project aligns family needs and high-quality preschool for children living in high-needs communities. Past studies of this model have shown that it can yield benefits such as higher high school graduation rates, lower rates of contact with the justice system, decreases in special education usage, and reductions in child abuse and neglect.

There are also several more in the works. The U.S. Department of Education’s Office of Elementary and Secondary Education is currently working with eight jurisdictions to determine whether PFS is an appropriate tool to expand high-quality preschool—a portfolio worth about $3 million. Similarly, the Department’s Office of Career and Technical Education has entered into a $2 million partnership with Social Finance and Jobs for the Future (JFF) to support the development of PFS projects incorporating high-quality career and technical education programs to improve outcomes for underserved youth. Various grantees of the Social Innovation Fund, such as the Institute for Child Success, are also helping communities around the country build their own PFS projects in education.

What makes education projects appealing candidates for pay for success?

  • The widespread appeal of helping children succeed
  • The potential for significant avoided costs associated with completing high school and postsecondary education, such as better outcomes in employment and decreased contact with the criminal justice system
  • The ability to monitor students and collect data is crucial for evaluation purposes, and the education system makes it easy to track students  

Our Early Childhood Education Toolkit, the result of a collaborative working group that included more than a dozen investors, research organizations, and PFS intermediaries, lays out the evidence underlying early childhood education interventions and best practices for designing and implementing PFS projects in early childhood education.

Early Childhood Education Toolkit

Below are additional insights from Urban researchers and practitioners on PFS’ value-add in early childhood education, legislation and funding opportunities in the space, and the evidence base for what works.

PFS and Education in Practice: Project Snapshots and Lessons Learned