Social Impact Partnerships 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. A Notice of Funding Availability (NOFA) for outcomes payments was released in February 2019. We have compiled the following information based on our understanding of the legislation and NOFA.

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. Currently, only the outcomes funding NOFA is available. The NOFA for feasibility funds is expected in 2019.

Social Impact Partnership Outcomes Funding

The NOFA indicates that Treasury has allocated about $66 million to support outcome payments. Half of the funding set aside for outcome payments will be granted to projects that directly benefit children. Additionally, up to 15 percent of the project award amount is available for project evaluations and will not be contingent on projects achieving target outcomes. Treasury is anticipating making between 5 and 15 grants under this NOFA for demonstration projects that can last up to seven years, with an additional six months available for final outcome measurement.

Feasibility Funding

A smaller amount of funding, up to $10 million, will be available to support feasibility studies for potential future projects once the feasibility NOFA is made public. Any feasibility 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 Outcomes Eligibility

In order to qualify for social impact partnership outcomes funding, the project must result in measurable outcomes that produce social benefit and government cost savings. In order to be eligible for SIPPRA outcomes funding, applications will need to include an estimate of the value of each outcome to the federal government. A tool to help applicants estimate this federal value is available on the Treasury Department’s SIPPRA website. 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 NOFA, 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 be made based on the estimated value of and savings from the project, the likelihood of achieving outcomes, the quality of the evaluation, and the capacity and commitment to sustain the intervention.  

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. More details will be available when Treasury releases the SIPPRA feasibility NOFA.

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’s funds for outcomes payment 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 once the feasibility NOFA is released, 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 the outcomes NOFA was released in February 2019. Applications are due May 22, 2019 and sites interested in applying are strongly encouraged to submit a Notice of Intent to Apply by April 8, 2019.  

How can Urban help?

The Urban Institute’s Pay for Success Initiative (PFSI) serves as a knowledge intermediary and evaluator for PFS projects at all stages of development and implementation. Urban’s team of experts work 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 pfssupport@urban.org.

Other Frequently Asked Questions

1. Who can submit a SIPPRA application? Do states need to pass legislation to apply?

Applications will need to come from state or local governments, some states have passed pay for success or similar legislation but states do not need to pass legislation to apply to this SIPPRA NOFA.

2. How do outside/third-party groups typically partner up with state or local entities as they submit their application?

If your organization is interested in SIPPRA, it is important that you identify state or local government stakeholders who would be interested in partnering on an application. To start, you might want to note if any of your organization’s or program’s current funding comes from a local or state government, and reach out via existing channels. For additional information on how the NOFA defines state and local government, see pages 61-62.

3. Does the service provider on a SIPPRA application have to be a nonprofit?

No, the service provider does not need to be a nonprofit.

4. Does the state or local government have to pay for the program costs upfront or can private investors pay upfront?  And if so, can the state pay back the private investor with funds from Treasury if the program achieves the agreed upon outcomes?

The state or local government or an investor could pay for the program costs upfront. Each of these entities would be eligible for repayment if outcomes meet or exceed the federal value as determined by an independent evaluator (see NOFA pages 12-15 for more information on outcome valuation).

5. What kind of evaluation is specified by the NOFA?

The NOFA outlines a preference for an RCT, though applicants can propose an evaluation with a quasi-experimental design if they can make the case that an RCT is not feasible for their project. A comparison group is required in any evaluation design to measure the relative impact on the group receiving services.

6. Who was appointed to the SIPPRA Commission?

All of the members we are aware of are listed on our US Commission on Social Impact Partnerships blog

7. How do these social impact programs generally value savings for programs that are oversubscribed with a waiting list?

Federal value cannot accrue until there is no longer a waiting list for a program. This means that projects will need to account for the number of people waiting to get services when estimating their value equation.

SIPPRA blog posts:

Additional Urban Resources:

Additional External Resources