Tell me more about the SIPPRA Notice of Funding Availability (NOFA)

Welcome to SIPPRA week! This blog post is the first of a series that will provide information and materials helpful to sites considering applying for SIPPRA funding. Check out our site for additional SIPPRA-related content.

Big news for the world of pay for success (PFS), social impact bonds, everyone interested in innovative social financing, and those who appreciate acronyms: Last week, the US Department of the Treasury released the Notice of Funding Availability (NOFA) for the Social Impact Partnerships to Pay for Results Act (SIPPRA).

Remember SIPPRA? It’s a provision in the Bipartisan Budget Act of 2018 that aims to support outcomes-based financing and provide funding for social impact partnerships, including PFS projects.

We imagine that you may have some questions about what’s in the NOFA. Consider this an entry point for frequently asked questions. If your question isn’t answered here, feel free to reach out via our Ask an Expert portal or directly to [email protected].

What does this NOFA do?

The NOFA invites applications for awards under SIPPRA. Award recipients will receive payments only if the “specified outcome of the social impact partnership project is achieved.” You should note: this NOFA is only for applications for outcome payments for social impact partnerships, which can include support for independent evaluations. A separate NOFA for feasibility funding will be released, likely later this year.

What is a social impact partnership project?

Social impact partnership projects encourage coordination between state or local government with service providers, potential investors, and intermediaries to fund effective interventions that produce clear, measurable outcomes for families and individuals in need and government savings. The closest analog is PFS projects.

How is this different from business as usual?

This “pay for results model” is different from more traditional grant programs. According to the NOFA, rather than “paying for specific processes and services, the federal government agrees to make payments only if predetermined, measurable outcomes are achieved within a given timeframe.”  The key point: ultimately, programs will have to be able to deliver on their outcome goals and demonstrate federal savings as a result of the project in order to have access to repayment via these federal funds.

What kinds of target outcomes are eligible under SIPPRA?

The NOFA outlines 21 outcome areas eligible under SIPPRA, including outcomes related to employment, health, homelessness, child welfare, and justice. It also provides leeway for projects to define other outcomes that would result in positive social outcomes and federal savings. A key component of the legislation is its stipulation that 50 percent of the overall portion of funding that SIPPRA appropriates to outcomes payments must be used for initiatives that directly benefit children (under the age of 18).

How will applicants prove that a project has achieved the target outcomes and federal savings?

An independent evaluator must verify both that a project achieved target outcomes and provide an analysis of the federal budgetary impact. Outcome measures must be defined relative to a comparison or control group. The NOFA stipulates a preference for a randomized controlled trial (RCT) as the evaluation design method; if applicants can make the case that an RCT is not feasible, they may employ a quasi-experimental design. We created an evaluation toolkit that can help inform design choices.  Additionally, the independent evaluator must include an assessment of any changes in federal revenue or spending through “changes in outcomes caused by the SIPPRA intervention.”

How will the “value to the federal government” be determined?

The value will come from the public sector savings (decrease in federal outlays) and federal tax receipts (potential increase in revenue) as a result of the program. Again, this is different from typical PFS projects, in which payments are distributed if predetermined outcomes are achieved. For a SIPPRA award, both the outcomes and the federal value must be demonstrated to activate the outcome payment. Applicants will be expected to implement a budget impact analysis to estimate the intervention’s effect on federal outlays and revenues.  Treasury announced that they will post a tool on the SIPPRA website to assist applicants in developing budget impact analyses.

What’s the lowdown on the application process?

Applicants need to submit an application to grants.gov (CFDA number: 21.017) no earlier than April 22, 2019 and no later than 4:00 PM (ET) May 22, 2019. Along with the grant application, applicants should submit a partnership agreement, which includes a definition of the roles of each partner, a service delivery plan, an evaluation design, a data-sharing agreement, an agreement on the evaluation design, and a payment arrangement. Eventually, each federally funded outcome payment issued to a state or local government “must be less than or equal to the value of the outcome to the federal government over a period not exceeding the intervention period.”

Applications must come from a state or local government, though they may work with other partners, such as investors, service providers, or intermediaries. Treasury expects to announce the results of this competition by November 2019.

What resources are available?

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 and a half years.

How will applications be scored and selected?

The applications will be scored according to the following criteria: value of and savings from the project (15 points), likelihood of achieving outcomes (50 points), quality of evaluation (30 points), and capacity and commitment to sustain the intervention (5 points).

Is that all?

Definitely not! There is a lot more detail in the NOFA – check it out for yourself.

But I still have questions!

And we are here to help. If you have questions about your project’s development and how you might evaluate its impact, please reach out to [email protected]. And check out our site for other SIPPRA-related resources. Tomorrow we will be publishing a blog post about our project assessment tool and how it can help you become SIPPRA-ready, followed by blog posts about costs and evaluation, the US Commission on Social Impact Partnerships, and other helpful resources.

Check out our other SIPPRA week blog posts:

• A tool to help assess your potential SIPPRA readiness
• Understanding key SIPPRA components: Costs, savings, and evaluations
• Using SIPPRA funds for early childhood education
• The Roles of the US Commission and Federal Interagency Council on Social Impact Partnerships
• SIPPRA: What's next?
• SIPPRA NOFA: An investor's perspective

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

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