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National Service Agency Announces $12 Million to Support Pay for Success Projects

Oct 1, 2014

Eight organizations selected as inaugural cohort of Pay for Success grantees

WASHINGTON, D.C. – The Corporation for National and Community Service (CNCS) today announced the winners of its inaugural Social Innovation Fund (SIF) Pay for Success grant competition. The $12 million in investments will advance and evaluate emerging models that align payment for social services with verified social outcomes. 
Launched earlier this year, the SIF Pay for Success program is designed to help cities, states, and nonprofits develop Pay for Success projects where governments pay service providers only when there are demonstrable results. 
“The thriving community of the future will be one where business, government, and nonprofits work together to discover innovative, effective solutions and tap new sources of capital to help these solutions grow,” said Lisa Garcia Quiroz, CNCS Board Chair and Senior Vice President, Corporate Responsibility and Chief Diversity Officer at Time Warner Inc. “I am proud that CNCS and the Social Innovation Fund are helping to usher in this new era by providing the resources, expertise, and evaluation needed to catalyze action and results.”
Today’s announcement builds on the seven new Social Innovation Fund grantees who received funding last month as part of the initiative's core program focused on growing innovative, evidence-based nonprofit organizations . Launched five years ago by President Obama, the Social Innovation Fund was created to find solutions that work, and make them work for more people – by proving, improving, and scaling effective models. SIF and its non-federal partners have committed to invest more than $700 million in effective community solutions since the program’s inception. 
The awards were announced at an event co-hosted by the Beeck Center for Social Impact and Innovation at Georgetown University, the Corporation for National and Community Service, and the U.S. National Advisory Board on Impact Investing. 
“Our agency is excited about this first cohort of Pay for Success grantees because of their proven track record for finding solutions that work,” said Wendy Spencer, CEO of the Corporation for National and Community Service. “Like all grantees at CNCS, these organizations will get things done for America, and open doors to financing and powerful partnerships for high-impact nonprofits with track records of success.” 
“We could not be more enthusiastic about our inaugural class of Pay for Success grantees,” said Michael D. Smith, director of the Social Innovation Fund. “They represent a diverse group of highly effective organizations and social enterprises at the cutting edge of social financing and innovation. Their work will lead to one of the largest and most comprehensive demonstration projects of when, why, and how Pay for Success can work for communities in need.” 
The SIF’s PFS investments aim to address limited availability of funds for planning, feasibility studies, deal structuring, and pipeline development, all of which have constrained growth of the field. The investments have the potential to lead to nearly a hundred Pay for Success deals across the country. SIF will also conduct a rigorous third party evaluation of the program and each project, sharing lessons at every stage in order to enhance knowledge in the field and to test and address questions around the applicability and efficacy of Pay for Success.
The inaugural cohort of Pay for Success grantees will help strengthen and diversify the Pay for Success field, including geographic reach, social issue areas, and approach. All grantees are tackling challenges within the SIF’s key focus areas of economic opportunity, healthy futures, and youth development. 
Within the next few months, all of the Pay for Success grantees will hold open competitions to select communities in need of services. Grantees were awarded between $200,000 and $1,800,000 each per year over a three year project period. Every SIF grant dollar must be matched by the grantee with nonfederal dollars and services.  Selected communities will receive grants or services valued at a minimum of $50,000 for periods of up to three years.
The following grantees were awarded Pay for Success funding: 
  • Corporation for Supportive Housing
    With a grant of $750,000, the Corporation for Supportive Housing will provide technical assistance to government and nonprofit organizations, building their capacity to pursue PFS pilots that improve outcomes and reduce costs for high-cost vulnerable populations, namely homeless individuals, youth and families, and disabled residents of health care institutions who prefer to live in the community. 
  • Green & Healthy Homes Initiative, Coalition to End Childhood Lead Poisoning
    With a grant of $1.011 million, the program will assess the feasibility of constructing asthma-related PFS projects and will provide technical assistance to healthcare organizations and nonprofit service providers. This program will be based on the asthma-focused PFS project that is being explored in Baltimore by a partnership between GHHI, the Calvert Foundation, and Johns Hopkins HealthCare and the Johns Hopkins Health System.
  • Harvard Kennedy School Social Impact Bond Lab
    The SIB Lab will use its $1.93 million grant to provide technical assistance to 10 local and state governments to build their capacity to pursue PFS projects. 
  • Institute For Child Success, Inc.
    With a grant of $782,412, ICS will provide technical assistance to help jurisdictions use PFS financing to improve outcomes for children and families. ICS will provide technical assistance to jurisdictions for 9 to 12 months with a goal of yielding 5 early childhood PFS deals in 5 years. Partnering with the Nonprofit Finance Fund, ICS will also build capacity of early childhood service providers.
  • National Council on Crime and Delinquency
    With a grant of $863,959, NCCD will assist three state or local governments or nonprofit organizations to build their capacity to use PFS to promote interventions addressing positive youth development, with a focus on juvenile justice or child welfare system-involved youth or youth at risk of entering or crossing over into these systems, and addressing high rates of racial disparity in these systems. 
  • Nonprofit Finance Fund
    The $3.6 million grant will fund technical assistance to support the structuring of PFS deals.  The program leverages NFF's recognized roles as a leading thought leader and independent trusted advisor to PFS stakeholders across a broad range of geographies and social issues.  The primary outcome will be the provision of $2.88 million in grant funding to state and local governments, and nonprofit providers to structure high-quality PFS transactions. 
  • Third Sector Capital Partners
    With $1.90 million, this project will tackle the most pressing challenge in the PFS field today: how to develop multi-government-level (local, state, federal) contracting and financing for outcomes-driven services. This project will create a laboratory for testing promising PFS mechanisms by providing technical assistance to governments and will convert lessons learned from individual projects into scalable PFS blueprints. 
  • University of Utah David Eccles School of Business PFS Lab
    With $1,150,000, the PFS Lab will provide technical assistance to nonprofit service providers to increase their capacity to participate in PFS deals. The PFS lab will focus its activities on building the PFS field in the Western United States with an initial focus on the intermountain west.

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