Pay for Success

To help users find relevant, quality resources from our Resource Library, we create curated lists on a variety of topics, bringing important practitioner- and academic-oriented work to the forefront.


Here we present resources for pay for success — cases that look at examples of pay-for-success initiatives, tools to help practitioners improve their work in the field of pay for success, reports that analyze pay-for-success policy, and more.


View all our curated lists here.


Learning from Experience: A Guide to Social Impact Bond Investing, MDRC, Gordon L. Berlin, 2016

This paper provides an “overview of the SIB promise” before briefly describing the “first social impact bond in the United States — the Adolescent Behavioral Learning Experience (ABLE) program at Rikers Island jail in New York City.” It also “frames critical decisions and identifies central tensions in the design of a deal, including the unique requirements of due diligence in a SIB project. Then it walks through the steps involved in structuring a deal, showing how the tensions inherent in the SIB mechanism must be confronted. It concludes with thoughts about how to move beyond a series of ‘bespoke’ deals to effective, ongoing programs operating on a large scale.”


The Payoff of Pay-for-Success, Stanford Social Innovation Review, V. Kasturi Rangan & Lisa A. Chase, 2015

This piece from SSIR provides an in-depth look at pay for success, focusing on the history of the model in the United States, the model’s unintended consequences, the role of philanthropy, and the future of pay for success. “We believe that despite all the hype, PFS’s ability to attract pure return-seeking capital to social programs will be muted. If anything, given the prominent role philanthropy has played in recently launched PFS deals, PFS’s potential contribution will actually be to unlock philanthropic and foundation assets in buffering the risk for return-seeking capital or, in some cases, to entirely finance certain PFS projects. Ultimately, impact-seeking rather than return-seeking capital will spur the growth of PFS,” the authors write.


Social Impact Bonds for Early Childhood Education in Utah, The Centre for Public Impact, 2016

This case study tells the story of “America’s first ‘Social Impact Bond’ (SIB) or ‘Pay for Success’ (PFS) transaction for early childhood education. … Applying social impact investing, the J.B. & M.K. Pritzker Family Foundation and Goldman Sachs funded the program in return for a results-based payout. The first payments were made in 2015 and amounted to US$260,000. They will continue until June 2021, when the cohort in question completes sixth grade. … The New York Times, among others, questioned the results, as being based on a false premise. … However, Brenda Van Gorder, the director of preschool services at the local school district in Utah, stressed that the use of SIBs had led Goldman and the Pritzker Foundation to pay for a program that the state of Utah would not have otherwise funded.”


Pay for Success Initiative, Urban Institute

In 2015, Urban Institute received $8.4 million in funding from the Laura and John Arnold Foundation to help launch its Pay for Success Initiative. The result of this ongoing initiative is a singular hub of resources intended to “support PFS efforts and share lessons learned with governments at all levels, as well as other key stakeholders including researchers, service providers, funders, and local and national public leaders.” The initiative has produced dozens of resources, including tools such as the Pay for Success Project Assessment Tool and the PFS + ECE: Pay for Success Early Childhood Education Toolkit, reports such as Procuring for Success: Lessons to Support a Shift Toward Procuring Outcomes and More Than Cost Savings: A New Framework for Valuing Potential Pay for Success Projects, and the Pay for Success: Ask an Expert portal.


Pay for Success as a Policy Tool, Innovations: Technology, Governance, Globalization, Mayor Ben McAdams, Jeremy Keele, and Fraser Nelson, 2017

“As mayor of Salt Lake County … my job is to ask, What are we spending our money on? What is working for our residents — or not? What programs should be tweaked or stopped altogether? How can we do better? And how will we know if our efforts are working?” writes Mayor Ben McAdams in this contribution to Innovations. McAdams discusses his experience with pay for success, including Salt Lake City’s first pay-for-success initiation in early education and later pay-for-success projects for recidivism and homelessness, and focuses on key lessons learned including the importance of political will, partnerships, and reliable sources of repayment to attract lenders.


Improving Social Impact Bonds: Assessing Alternative Financial Models to Scale Pay-for-Success, Harvard Kennedy School, Nicholas Bergfeld, David Klausner, and Matus Samel, 2016

“Social Impact Bonds (SIBs) represent a new and innovative tool for promoting social welfare. … The limitations on the private provisioning of social welfare programs are decreasing, and recent technology allows for more accurate cost-benefit analysis and the measurement of more meaningful performance indicators. Taken together, these factors increase the technical feasibility of SIBs. By incorporating the private sector into the promotion of social welfare, social programs stand to benefit from the market-driven efficiencies gained by incorporating a profit motive. Society stands to benefit in return, through both the more effective provision of social services and the cost savings realized by government entities. … This policy analysis describes in detail the risks and barriers that could prevent the growth of the SIB market and hinder its adoption as a useful means of providing social services.”


Goldman Sachs Goes to Rikers Island, Darden School of Business, Elena Loutskina et al., 2017

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This teaching case helps students “develop an awareness of the growing innovative financial structure that attracts private capital to finance governmental efforts to address social issues: SIBs. … Yi Hua, the leader of an impact-investing initiative at Goldman Sachs, was examining a new financial arrangement in a proposed public-private partnership called the Rikers Island Social Impact Bond (SIB). The proposed SIB was the result of a partnership between Goldman Sachs, the New York City Department of Correction, Bloomberg Philanthropies, and three nongovernmental organizations (NGOs). … The investment that Goldman Sachs was considering would finance the implementation of a cognitive behavioral therapy program for teens (aged 16 through 18) incarcerated at Rikers Island. The goal of the program was to lower the likelihood of those teens returning to jail following their release (i.e., recidivism). If predetermined outcome-based metrics, which focused on lowering recidivism, were reached, the NYC government would repay Goldman Sachs its contributed capital along with a return.”


New Tools to Amplify Impact: A Pay for Success Guide to Building Non-profit Capacity, Social Finance and the W.K. Kellogg Foundation, Jake Segal, Jeff Shumway, and Jon-Paul Bianchi, 2016

This report is “an attempt to shed new light on one of the most difficult challenges in the social sector: achieving sustainable funding at meaningful scale. Working with the W. K. Kellogg Foundation and four of their grantees,” the authors “explored the question: how can non-profits prepare themselves — and their data, evidence, and outcomes — for the next generation of government funding?”

Scholarly Article

Using Benefit-Cost Analysis to Scale Up Early Childhood Programs through Pay-for-Success Financing, Journal of Benefit-Cost Analysis, Judy A. Temple and Arthur J. Reynolds 2015

“Increasing access to effective preschool programs is a high priority at local, state, and federal levels. … Social impact investing with a ‘Pay-for-Success’ contract can help budget-constrained governments expand proven or promising preventive interventions without the need to increase taxes. Benefit-cost analysis (BCA) plays a crucial role in helping to identify which social, educational, or health interventions are suitable for this type of innovative financing. Benefit-cost analysts are needed to design the structure of the success payments that the government will make to the private investors. This paper describes social impact borrowing as a new method for financing public services, outlines the contribution of BCA, and discusses the innovative use of social impact financing to promote scaling evidence-based Child-Parent Centers and other early childhood programs.”


Pay For Success Learning Hub, Nonprofit Finance Fund

This website from Nonprofit Finance Fund provides an overview of pay for success basics, a glossary, FAQ page, discussion of issue areas, and learning paths divided by role (service providers, government, and investors), along with links to additional resources.