Managing the gap between resources and demand is a way of life in human services. Yet to deliver social outcomes, something has to give. That’s why forward-thinking agencies are exploring pay for success human services solutions for new capital funding for social interventions.
Pay for success financing models tie performance of a desired social outcome to compensation. Using outcomes data, pay for success monetizes social outcomes by capturing the value between the cost of prevention today and the price of remediation tomorrow. The government pays investors their principal and rate of return only if interventions achieve predefined results. The success of these arrangements is proving that investment for financial return and donation for social return do not have to be either-or propositions.
Download the full article for six guidelines for agencies interested in exploring pay for success.