Social Impact Partnership to Pay for Results Act (SIPPRA)

The Social Impact Partnerships to Pay for Results Act (SIPPRA) is a provision in the Bipartisan Budget Act of 2018 that aims to support outcomes-based financing and provide funding for social impact partnerships, including pay for success (PFS) projects. Although SIPPRA could help scale evidence-based policymaking, questions remain about how this legislation will be implemented. An upcoming request for proposals (RFP), likely to be released in February 2019, should provide some answers. We have compiled the following information based on our understanding of the legislation.

What is SIPPRA?

SIPPRA creates a $100 million standing fund held by the US Treasury to make outcome payments in social impact partnership projects and to fund select feasibility studies. These funds are available for state and local governments  implementing programs that produce defined and rigorously-measured outcomes and cost savings. SIPPRA also creates the Federal Interagency Council on Social Impact Partnerships and the Commission on Social Impact Partnerships to advise on project applications and provide other support. Applying for SIPPRA funds requires project details such as an intervention description, expected outcomes, costs, funding structure, and evaluation design.

What can SIPPRA resources fund?

SIPPRA funding can be used for two social impact partnership project uses: project funding (outcomes and evaluations) and feasibility studies.

Social Impact Partnership Funding

At least $55 million of the SIPPRA funds are set aside for outcome payments for eligible social impact projects. Projects must successfully meet target outcomes, as demonstrated by an independent evaluator, in order for the fund to repay investors, making the U.S. Treasury an end payor in these projects. Furthermore, 50% of the funding for social impact partnerships is earmarked for programs that explicitly benefit children. SIPPRA also states that no more than 15 percent of project costs may be used for program evaluation.

Feasibility Funding

A smaller amount of funding, up to $10 million, is available to support feasibility studies for potential future projects. Moreover, the grant will only cover up to 50% of the estimated total cost of the feasibility study.

What types of projects are eligible?

Social Impact Partnership Eligibility

In order to qualify for social impact partnership funding, the project must result in measurable outcomes that produce social benefit and government cost savings, although it is still undetermined how this will be measured or defined. The program itself may support a range of social outcomes, some examples include increasing rates of high school graduation, reducing rates of homelessness, and improving early childhood development among low-income families. According to the law, sites applying for this funding should effectively be ready to begin a project, have found the project feasible, and already developed a comprehensive plan for program implementation, payment terms, and an evaluation design. The grant decision will likely be made based on the likelihood of achieving the stated outcome, government savings, and the expected quality of the evaluation among other considerations. The RFP will provide more clarity on the application requirements and terms of eligibility.

Feasibility Eligibility

Feasibility funding is available to places in the earlier stages of development. Applicants must detail the anticipated program design as well as estimates of the costs, outcome measures, timeline, and other factors related to the intervention. The proposals will be evaluated on the likelihood of achieving the outcomes, the value of the outcomes, and potential savings to the government.

What does this mean for you?

SIPPRA provides an opportunity for states and localities to apply for funding to support their social impact projects. The majority of the funding is set aside for outcome payments for projects that have already been found to be feasible and have a plan for implementation. This makes SIPPRA a potentially good fit for sites that have completed their feasibility studies and are moving to start an eligible program but are trying to confirm an end payor. Sites interested in exploring the feasibility of a promising project should also consider applying, especially if they have confirmed another source of funding (or in-kind support) to cover half of the feasibility study’s cost.

What is the timeline?

SIPPRA was signed into law in February of 2018, and funding is required to become available within one year of that enactment. The request for proposals is expected to be released in February 2019 in the Federal Register and grant awards will be made within 6 months of receiving an application. The funding is available for projects that extend up to 10 years, enabling grantees to define outcomes that are realized over this period.

How can Urban help?

The Urban Institute’s Pay for Success Initiative (PFSI) serves as a knowledge intermediary for PFS projects at all stages of development and implementation. Urban’s team of experts works directly with government stakeholders, practitioners, and thought leaders to ensure that emerging PFS projects are grounded in the best available evidence and developed according to current best practice.

If your question was not answered in this factsheet, or you are interested in ongoing guidance around these issues, please reach out to Urban via our website at https://pfs.urban.org/ask-expert or e-mail payforsuccess@urban.org.

 

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