1. Pay for Success Bonds - 2012 Budget
The 2012 President’s Budget designates $100 million that may be used for Pay for Success bonds. Under Pay for
Success, Federal programs contract with a financing organization to measurably improve outcomes for at-risk
populations. With philanthropic and other investors providing up-front funding, the Federal government pays only
if clearly defined outcomes are achieved. Pay for Success leverages private resources to drive evidence-based
innovation and to invest in what works.
 Pay for Success funding is spread across seven pilot and innovation grant programs in five agencies: Education,
Labor, Justice, the Social Security Administration, and the Corporation for National and Community Services.
 Federal agencies would only use the designated funds for Pay for Success projects if there is agreement with a
State or locality and a financing organization that a promising Pay for Success pilot is ready to be launched.
 The Budget includes appropriations language allowing unused Federal funds (e.g., if Pay for Success pilot does
not achieve results) to be de-obligated and re-obligated for other high priority programs.
 2012 Budget General Provisions (pg. 12, section 734)
Maximum
Appropriations
Program Funding References in the Budget
Account
(millions/%)
Department of Education – Rehabilitation
Title V General Services and Disability Research
Workforce Innovation
Provisions (covering ED $20/5% Congressional Justification (pgs. 131-132);
Fund
and DOL) Department of Labor – General Provisions
Budget (pg. 6)
SSA/Supplemental Social Security Administration – SSI Budget
SSI R&D $10/26%
Security Income (SSI) (pgs. 3 and 5)
ED/Office of Innovation Department of Education – Federal Budget
Investing in Innovation $15/5%
and Improvement (pg. 70)
Corporation for National and Community
CNCS/Operating
Social Innovation Fund $14/20% Service – Congressional Justification (pgs. 10,
Expenses
16, and 47)
Department of Education – Higher Education
ED/Higher Ed FIPSE $15/10%
Congressional Justification (pgs. 3, 5-6, 106)
Department of Education – Special Education
Congressional Justification (pgs. 2, 5-6, 108-
ED/Special Ed PROMISE $6/20%
110)
DOJ – State and Local Second Chance Act Department of Justice – Office of Justice
Law Enforcement (Offender Re-Entry) $20/20% Programs Congressional Justification (pgs.
Assistance Programming 37 and 57)
Total $100
Other Links
 “Social Impact Bonds: A promising new financing model to accelerate social innovation and improve
government performance” (Jeffrey B. Liebman, Center for American Progress)
 “What Are Social Impact Bonds?” (New York Times)
 “Rockefeller Foundation Sees Social-Change Dividend” (Wall Street Journal)
 “Heads Taxpayers Win, Tails They Don’t Lose” (Washington Post)
 “Obama’s social impact bonds: private money, public benefit” (Baltimore Sun)
 “For Federal Programs, A Taste of Market Discipline” (New York Times)
 “The Most Exciting 0.0003% of Obama’s Budget: Social Impact Bonds” (Fast Company)