In collaboration with the Laura and John Arnold Foundation (LJAF) and the Nonprofit Finance Fund (NFF), the White House Office of Social Innovation and Civic Participation will hold a series of regional PFS summits that mark the launch of the next phase in the development of PFS, as this tool transitions from pilot implementation in a few areas to widespread adoption across multiple sectors. Through the event series, the partners seek to take advantage of growing interest and capacity to accelerate the growth and impact of the PFS field.
Through this commitment, a series of regional sessions across at least three cities in different parts of the country will be organized to support cities and states pursuing PFS solutions. The series will engage state, local and philanthropic leaders to consider PFS in their local context, encouraging them to make commitments regarding PFS and advancing PFS across issue areas. With this Commitment, the partners seek to build awareness of and encourage action on PFS financing approaches where decisions pursue PFS ultimately get made: at the state and local level.
The events will highlight the progress of the PFS sector to date and address the promise of PFS to support innovative high impact interventions across fields from early childhood and recidivism to preventive health and environmental remediation. Beyond expanding knowledge, awareness and capacity among key decision makers and service providers, another desired outcome is specific commitments on the part of states, municipalities, philanthropy, investors, and service providers to take action on PFS, which may include data analysis, feasibility studies, deal structuring, in-kind contributions of assets or expertise, and funding commitments, among other actions.
At present, the events are expected to include expert-level panels, issue area break-outs, and real-world or sample PFS transaction work-shopping, depending on availability of in process transactions in each region.
State and local public, philanthropic and nonprofit leaders will comprise the majority of the attendees. The remainder of invitees will be representatives and thought leaders and issue area experts from foundations, nonprofits, and academia, as well as local Congress members/staff. At present, events are expected to include 60 to 100 attendees each.
The White House Office of Civic Participation will make staff available to speak at the events, the LJAF will provide necessary funding to cover the costs of the events, NFF will coordinate the events and manage necessary logistics and event planning.
June-July 2014: Identify and announce regions, cities and local summit hosting partners; structure and plan events
August-September 2014: Build awareness, select and invite attendees, and hold first summit event. Amplify relevant outcomes.
October-November 2014: Build awareness, select and invite attendees, and hold second and third summit events. Amplify relevant outcomes.
Pay for Success (PFS) is a Presidential priority that offers new ways to support social sector innovation, driving better results while conserving government resources. PFS enables government to overcome budgetary and political barriers to preventive social solutions, allowing them to pay only for solutions that work through partnerships where private investors take on the risk of failure. Since the White House began highlighting PFS and PFS financing as a promising solution in 2011, the sector has developed from a promising concept to pilot implementation with four active transactions, a robust pipeline and formal PFS action taking place in nearly 20 states.
Pay for Success offers innovative ways of partnering with philanthropic and private sector investors to create incentives for service providers to deliver better outcomes at lower cost-producing the highest return on taxpayer investments.
Despite the potential benefits of PFS, there remain multiple barriers to broad implementation of outcomes-driven payment for social services. These include:
-Lack of existing tools for rigorous outcomes measurement
-Lack of knowledge of valid and reliable intermediate outcomes
-Lack of expertise about what outcomes could reasonably be expected
-Lack of easily available data and tools to assess performance effectively
-High costs associated with evaluation
-Political and budgetary constraints that prevent governments from investing in prevention
- Budgetary constraints which may include restrictions on use of funds, lack of funds for innovative programs focused on prevention rather than remediation, and the 'wrong pockets' problems wherein investment by one arm of government may save resources for another but where misaligned incentives or program rules do not allow it
- Inability of nonprofits to expand operations to scale and to self-finance operations while waiting for longer-term verification of outcomes
-Lack of expertise and capacity in structuring solutions that align payment for services around outcomes