The Nonprofit Finance Fund has announced five sub-grantees that will receive technical assistance to develop Pay for Success (PFS) projects nationwide.
Pay for Success is a model of performance-based contracting that shifts the burden of social investment off of the government and on to private investors. Private sector investors front the capital for organizations to implement social programs. The government only pays the initial investor back, with interest, if a specific set of outcomes are met. So, in essence, the government is now paying for outcomes and not services rendered.
The NFF received a $3.6 million grant from the federal Social Innovation Fund last year. The grant’s purpose is to strengthen the field of PFS by preparing state and local governments, along with service providers, to launch viable PFS projects. Out of the five projects selected, two are youth related.
In Illinois NFF has awarded $135,000 to the Illinois Dually Involved Youth Project, which will deliver services throughout Illinois to adolescent youth involved in both the criminal justice and child welfare systems. The project is led by Third Sector Capital Partners working in partnership with the Conscience Community Network (CCN), a collaborative network of six experienced nonprofits.
The grant will allow CCN to hire staff to manage the final stages of project construction. Working in coordination with government agencies, CCN will provide intensive wraparound services and access to evidence-based practices to serve youth in lieu of institutional care, prevent repeat delinquent behavior, and support successful transitions to adulthood.
In Salt Lake City, the Community Foundation of Utah will receive $250,000 to pilot an innovative portfolio approach to structuring and financing Pay for Success agreements. Salt Lake County is launching three projects simultaneously in the areas of maternal and child health, homelessness, and criminal justice. Measurable outcome targets for the maternal and child health program include reductions in pre-term births and child maltreatment.
Other projects include interventions targeting homelessness, unemployment and criminal justice. Click here to view a full list of grantees.
NFF will open a second application round to select additional subgrantees on June 1, 2015. For more information, click here.