Invest in Results | Nonprofit Finance Fund | 2020

"...Pay for Success (PFS) is an approach to outcomes-based funding that has changed the conversation about how to most effectively and efficiently fund social good. Back in 2010, Nonprofit Finance Fund and other pioneers set out to bring PFS to the United States, without knowing how the field would develop, if the hype around it was deserved, or what “success” would look like. PFS ties payment for service delivery to the achievement of measurable progress and outcomes. It has been used to fund efforts like early education, job training, criminal justice reform, and health interventions where the most desired outcomes (elementary-school readiness, long-term employment, reduced recidivism, better health) occur over time. In PFS financing – first developed as “social impact bonds” – strong service providers deliver high-quality programs designed to improve lives and prevent future problems. Typically, mission-driven investors cover the up-front costs of delivering these programs. If the predetermined goals are achieved, investors are repaid – often by government – with a return...."