Budget bill pushes through groundbreaking evidence-based provisions

In a culmination of growing interest in social impact investing at the federal level, last week President Trump signed into law the Bipartisan Budget Bill of 2018 that includes a $100 million fund to support pay for success (PFS) projects based on state and local need.

The budget bill includes three major provisions that promote pay for success and evidence-based decisionmaking efforts:

• Reforms the Family First Prevention Services Act. The budget significantly restructures federal funding that is used to support child welfare services (Titles IV-B and –E) with a particular emphasis on evidence-based programs. It directs resources toward trauma-informed programming, including mental health and substance abuse prevention and treatment services, and in-home parenting programs for caregivers of children at risk of entering state care.
• Reauthorizes the Maternal, Infant, and Early Childhood Home Visiting Program (MIECHV). Title VI of the budget bill renewed MIECHV through 2022. Program grantees are required to select one of 18 evidence-based models, all of which aim to promote health child development and learning through a set of comprehensive in-home, parenting-focused services for at-risk pregnant women and their families. For the first time, the bill also includes the "option to fund evidence-based home visiting on a pay for outcome basis"—in other words, pay for success.
• Enacts the Social Impact Partnerships to Pay for Results Act (SIPPRA). After years in the making, SIPPRA enables the federal government to fund PFS feasibility studies and repay investors in a successful PFS project through a $100 million standing fund held by the US Treasury Department. Projects must show local, state, or federal cost savings as a result of outcomes achieved in order for the fund to repay investors. SIPPRA simultaneously creates the Federal Interagency Council on Social Impact Partnerships and the Commission on Social Impact Partnerships to advise the Treasury secretary on project applications and feasibility studies.
  
  

After the defunding of the Social Innovation Fund—a major catalyst of PFS efforts nationwide—in FY 2017, SIPPRA's passage as part of this legislation makes the fund and infrastructure it authorizes the largest federal support for the pay for success field. How a standing federal fund for PFS outcomes operates in practice remains to be seen, but the field is optimistic about the budget bill’s ability to broaden the evidence-based programming landscape and promote other types of innovation.

Federal signaling of support for PFS and other forms of evidence-based programming could lower the barrier to entry, and bring more localities into the fold. For instance, the text of SIPPRA stipulates that social impact partnerships should focus on any of 21 different outcomes areas, ranging from reduced teen and unplanned pregnancies to improved employment outcomes for veterans. This allows jurisdictions the freedom to target a broad spectrum of social issues in their communities through the support of the federal fund.  

The evidence-based community is celebrating in the wave of this historic legislation given that all three provisions emphasize evidence-based practices and rigorous evaluation. The field will be watching keenly as the first cohort of SIPPRA grantees are selected later this year to see how this additional federal support can benefit communities nationwide. 

Have a Pay for Success question? Ask our experts here!

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.