What is PFS?
Pay for success (PFS) is an innovative financing mechanism that shifts financial risk from a traditional funder—usually government—to a new investor, who provides up-front capital to scale an evidence-based social program to improve outcomes for a vulnerable population. If an independent evaluation shows that the program achieved agreed-upon outcomes, then the investment is repaid by the traditional funder. If not, the investor takes the loss.
To learn more about how pay for success projects work, browse our FAQs. You can also reach out to one of our experts with questions about applying the model to your community.
What is pay for success (PFS)?
Pay for success (PFS) is an innovative financing mechanism that shifts financial risk from a traditional funder—usually government—to a new investor, who provides up-front capital to scale an evidence-based social program to improve outcomes for a vulnerable population. If an independent evaluation shows that the program achieved agreed-upon outcomes, then the investment is repaid by the traditional funder. If not, the investor takes the loss.
Pay for Success: The Importance of Evidence
The link between pay for success and building the evidence base for social programs is not always intuitive, but it’s a critical relationship. Watch as PFSI’s Justin Milner explains how pay for success elevates evidence to innovate the way governments do business.