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.
Launched in 2014, 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 through 2016. 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.
To learn more about the initiative leaders, click here.
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.
- In June, 2015, the Children and Families Commission of Orange County completed its Phase I Feasibility Assessment. Read more about the Commission's findings here.
- 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 30, 2014. For a complete list of projects being supported through the Initiative, click here.
- On May 5, 2014, 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 reduce costs. In a Pay for Success agreement, governments identify promising or proven programs with evidence of addressing social problems. Mission-driven organizations deliver preventative or interventional services that have benefits such as improved community health, education and employment, and private funders and investors pay for the full cost of service delivery up-front. If the project achieves pre-determined benchmarks of success, the government reimburses investors with a return on their investment. If the project does not address the problem at agreed-upon levels, the government does not have to pay. The California Pay for Success Initiative was designed to launch the state's first PFS projects, putting California among a handful of states pioneering this approach to improving social outcomes by paying for services in new ways.
Pay for Success aims to:
- Shift funding for social services toward prevention and early interventions, saving money and improving outcomes for community members.
- Give programs with demonstrated effectiveness new access to financing from private sources.
- Align stakeholders’ interests and incentives around shared goals for social benefit.
- Use taxpayers' money more effectively because government pays only for what works.
- Put private money to work for public good.
The following resources provide more information on Pay for Success: