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Pay for success investing in what works pre-convening session-final

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Pay for success investing in what works pre-convening session-final

  1. 1. Pay for Success 101 Jitinder KohliCenter for American Progress – Doing What Works White House Convening October 21st 2011
  2. 2. Traditional financing Government  Government  Government  Government  agency 1 agency 2 agency 3 agency 4 Helping  ex‐ Drug  Housing  Restorative  offenders  treatment support justice into work program $20m $8m $14m $5mProvider  Provider  Provider  Provider  Provider  Provider  Provider  Provider 
  3. 3. Some issues• Funding inputs• Hard to know what is working• Even harder to shift money between programs• Bureaucratic reporting and controls• Effective approaches rarely scale
  4. 4. Pay for Success Bonds Government Investors fund dealmaker agencyDealmaker promises return to investors if  Dealmaker  Govt makes successful promises to  payment if  achieve  outcome Investor 1 outcome achievedInvestor 2 Dealmaker Dealmaker manages  and funds providersInvestor 3 Providers work with  Provider 1 Provider 2 Provider 3 beneficiary population  and report progress to  dealmaker Beneficiary population
  5. 5. Challenges• Complex• Cannot work for everything – Measurability – Non essential services – Outcomes need to flow in sensible timeframe• Requires political courage – Flexibility for dealmaker/providers on the ‘how’ – Possibility of private sector return – Potentially getting beyond silos
  6. 6. Advantages• Allows successful social innovations to scale• Removes input controls from providers• Public money only allocated to approaches  that work • Helpful in a fiscally tight world• Leverages private and philanthropic capital
  7. 7. Very early days• But what’s the potential? • Could it be relevant to your world?• What variations might be needed in your  context? 

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