Pay for Success

Driving public resources towards innovative programs that work better for people in need

New Profit has been actively involved in the growth of the Pay for Success movement, which seeks to drive public resources towards more innovative, high-impact organizations that are delivering better outcomes for people in need. Pay for Success contracting involves cross-sector collaboration between government and social services providers, and may also include other partners such as foundations, investors and other entities. In this movement, government dollars are tied to results rather than the cost of services provided or the number of people served. In some cases, private sector partners come together to provide up-front growth capital for the high-impact social service providers all of whom are in pursuit of ambitious outcomes and strengthened accountability. If the outcomes are achieved, based on independent evaluation, the private sector funders, and in some cases even providers, are entitled to reimbursement. In addition, new evidence is available to inform policymakers’ decisions about budgeting and programming.

New Profit is involved with a number of specific Pay for Success initiatives across the country:

  • New Profit is an investor in the Massachusetts Juvenile Justice Pay For Success Initiative, an effort to help at-risk young men avoid repeat incarceration and build better lives that launched in February, 2014.
  • America Forward, New Profit’s nonpartisan policy initiative, has been instrumental in raising awareness of Pay for Success’ potential in Washington and beyond. America Forward was a lead advocate for inclusion of Pay for Success provisions in the Workforce Innovation and Opportunity Act of 2014. America Forward is also collaborating with Third Sector Capital Partners on a new $1.9M award from the Social Innovation Fund of the Corporation for National and Community Service to explore and expand Pay for Success programs in local communities that want to address youth development, economic opportunity and public health.