Federal Agency Announces $6.1 Million to Support Pay for Success Pipeline

May 10, 2016

Second cohort of Social Innovation Fund Pay for Success project includes Harvard University, LISC, and the University of Utah

WASHINGTON, D.C. – The Corporation for National and Community Service (CNCS), the federal agency for volunteering and service, today announced the winners of its second Social Innovation Fund (SIF) Pay for Success grant competition. More than $6.1 million in investments will advance and evaluate emerging models that align payment for social services with verified social outcomes.

Launched in 2014, the SIF Pay for Success (PFS) program is designed to help cities, states, and nonprofits develop Pay for Success projects, which tie funding for an intervention to its true impact in the community.

“Our agency is thrilled to continue our Pay for Success work with this second cohort of grantees. They have a 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.” 

In 2009, President Obama authorized the creation of the Social Innovation Fund 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 invested nearly $900 million in effective community solutions since the program’s inception.

In just six years, the SIF and its private-sector partners have invested more than half a billion dollars in compelling community solutions. As a result of $295 million in federal grants and more than $583 million in non-federal match commitments, the SIF has awarded 43 grants to grant making institutions supporting over nearly 350 non-profits working in 40 states and the District of Columbia.

“The grants announced today will help build a powerful pipeline to take more Pay for Success projects from feasibility to implementation phase using innovative concepts and ideas for solving social problems.  These SIF grants will help to “seed” various phases of Pay for Success, equipping communities to improve the lives of people most in need,” said Damian Thorman, director of the Social Innovation Fund at the Corporation for National and Community Service.

Combined with SIF’s current investment of $12 million to eight PFS grantees working on feasibility and transaction structuring, this new investment of $6.1 million has the potential to lead to nearly 100 Pay for Success models across the country. SIF will also conduct a rigorous third-party evaluation of each project, sharing lessons learned at every stage. This approach will also test and address questions around the applicability and efficacy of Pay for Success as an investment model.

This second SIF PFS cohort of grantees will help strengthen and diversify the PFS field, broadening 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.

The grantees will be awarded between $600,000 and $1.3 million each, per year for the first two years of the three-year grant period. Every SIF grant dollar must be matched by the grantee with non-federal cash or in-kind match.  Communities selected for these projects will receive technical assistance services from the grantees valued between $75,000 and $400,000 per year using SIF funds. Within the next few months, all of the PFS grantees will hold open competitions to select communities in need of services.

The new SIF Pay for Success grantees are:  

  • Harvard Kennedy School Government Performance Lab
    With a $2.1 million grant, the Harvard Kennedy School Government Performance Lab will take projects from the feasibility phase to the implementation phase for up to five Pay for Success projects. Since its inception, the Harvard Kennedy School GPL has been actively involved in the feasibility and transaction structuring of 26 PFS projects.  The HKS GPL’s mission is to accelerate the pace of progress on tough social challenges by improving the way that governments procure and deliver social services.
  • Local Initiatives Support Corporation (LISC)
    With a $1.3 million grant, LISC will take projects from the feasibility phase to the implementation phase for three to four service recipients. LISC will identify high-performing service providers that have demonstrated the ability to develop and operate strong evidence-based programs for PFS investment; help standardize content-specific program design and systematize contracting for the social service program; and create a body of high-quality and routinely-collected data across content areas for PFS projects.  In addition to overall project coordination, LISC will raise investment capital for selected projects, undertake financial modeling for Service Recipients, coordinate negotiation of all transaction documents, develop ongoing monitoring and data collection requirements, and support ramp-up activities.
  • Sorenson Impact Center at the University of Utah’s David Eccles School, in partnership with Social Finance, Inc.
    With a grant of $2.6 million, the Sorenson Impact Center, in partnership with Social Finance, Inc., will provide advanced transaction structuring technical assistance for between four-five service recipients, bringing Pay for Success projects into development in the Western U.S. The partnership will take a proactive and comprehensive approach to help jurisdictions structure projects. This includes assisting organizations with the development of a communications and engagement strategy to support providers, funders and policymakers.
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