Efficiency at the core of a discussion of PFS/SIB in today’s SIB News. Have a great weekend.
Why Pay For Success Matters
Jean Case – Forbes
For too long, public funding has been extended toward programs that show little efficacy or impact in areas they target. And yet, year after year, these programs continue to get funded.
But there are some encouraging developments as new models have begun to take shape in communities across our nation and around the world that offer the promise of delivering more effective and efficient services to citizens at a reduced cost by government. One approach that has gained increasing traction is known as Pay for Success – programs that rely on defining real outcomes and using data and evidence to measure progress.
This model has appeal to taxpayers, governments, philanthropy and the private sector because it represents a unique partnership model that infuses private sector resources to fund evidence-based interventions in areas ranging from education to healthcare to unemployment. Funding takes place at the front end of program delivery and requires government to pay for services only when outcomes are delivered. If outcomes aren’t achieved, the government can pay nothing; if outcomes are achieved above a certain threshold, private sector investors don’t just get their money back, they may see a return on top of the amount originally invested.