California Pay For Success Initiative
Nonprofit Finance Fund and The James Irvine Foundation have launched the California Pay for Success Initiative, a $5 million effort to catalyze innovative approaches to paying for improved social services throughout the state.
The California Pay for Success Initiative is providing flexible funding and expert support to help nonprofit and government leaders structure Pay for Success agreements in California over the next three years. In addition to helping finalize these agreements, the Initiative will nurture a cohort of leaders that will learn from each other and share knowledge as they take Pay for Success from concept to reality.
Project Updates and Initiative Reports
- On August 14, 2015, Santa Clara County launched Project Welcome Home, a significant initiative to measurably improve the lives of vulnerable community members while helping to find permanent solutions to the complex and costly problems associated with homelessness. The project is the first Pay for Success initiative in California, and was developed with early support and resources from the California Pay for Success Initiative. Read more about Project Welcome Home here.
- In August, 2015, the Los Angeles County Board of Supervisors selected the Just in Reach program as the first project for the County to pursue in the Pay for Success context. Read more about the County's project selection process and criteria here.
- In August, 2015, Nonprofit Finance Fund selected Alameda County to join the Initiative, and awarded additional support to several members of the cohort.
- Read the first California PFS Initiative Field Report: Applicant Readiness and Needs here.
- Read about Frequently Asked Questions about Pay for Success, developed in partnership with the California PFS Leaders, here.
- A sixth award was made on June 30th. For a complete list of projects being supported through the Initiative, click here.
- On May 5, five projects, organized by leaders exploring the Pay for Success model for funding social services, were selected by Nonprofit Finance Fund to be part of the California Pay for Success Initiative. Read the Press Release here.
- Click here for more information about the California PFS Initiative.
- See the initial Press Release announcing the Initiative in January 2014 here.
For more information about this initiative, or if you are interested in providing support to leaders pursuing PFS projects and receiving awards under this initiative, please contact: Jessica LaBarbera, Vice President, Nonprofit Finance Fund at JLaBarbera@nff.org.
Interested in learning More about Pay for Success?
Pay for Success is an approach to funding social services designed to improve outcomes and ultimately reduce the costs of addressing these issues. In a Pay for Success agreement, private investors provide funding for preventative or interventional services up-front, and government reimburses these investors with a return on their investment, only if results are achieved. In doing so, private investors take on initial risk, governments only pay for outcomes, and cost-saving programs with demonstrated effectiveness have access to new financing from private sources. While Pay for Success projects are underway in a few other states, there are none yet launched in California.
Pay for Success aims to:
- Shift funding for social services toward prevention and early interventions, saving money and improving outcomes for community members.
- Save taxpayers money because government pays only for results.
- Put private money to work for public good.
- Bring new private funding to scale preventative social services that have proven results.
- Align stakeholders’ interests and incentives around shared goals.
The following resources provide more information on Pay for Success:
- Nonprofit Finance Fund’s Pay for Success Learning Hub provides a wealth of resources for those interested in staying abreast of all of the developments around PFS in the United States. New to Pay for Success? Check out the Pay for Success 101 section of the Learning Hub to learn more.
- Click here for Frequently Asked Questions about Pay for Success, developed in partnership with the California PFS Leaders.
- This concise Fact Sheet produced by the Center for American Progress provides a simple introduction to the innovative financing mechanism that is Pay for Success.
- To learn more about potential and existing Pay For Success projects being explored in other parts of the country, the following links project good examples of existing and potentially viable PFS projects: