PFS Guidance: Briefs and Reports
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.
Making Sound Cost Decisions in Pay for Success Projects
Pay for success (PFS) represents a significant departure from the status quo for funding public social programs. Through PFS, the government repays the cost of service delivery only to the extent agreed-on outcomes are achieved. This model aims for high-priority outcomes rather than simply contracting for outputs.
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.
The Role of Pay for Success Evaluators: Lessons Learned
Drawing on the experiences of Urban researchers engaged in PFS evaluations, this paper focuses on the unique characteristics and primary responsibilities of the evaluator in designing and implementing PFS evaluations, as well as ways in which the evaluator can leverage their expertise to go beyond these primary roles to work with each PFS stakeholder to strengthen both the project and the evaluation. Urban’s experience has shown that the early and continuous engagement of an evaluator is important as PFS projects proceed through stages of development.
Results-Based Financing Approaches:Observations for Pay for Success from International Experiences
Globally, policymakers and the public are searching for solutions to help ensure money meant for public service delivery goes to fund effective programs. One such solution, results-based financing (RBF), leverages existing or new financial resources to incentivize results by paying for desired outcomes or outputs. RBF approaches are diverse and have emerged in different contexts and with different partners. Generally, however, they share two characteristics: payment is based on results and the relationship between payment and results is predefined.