This post was written by Nicole Truhe, Director of Government Affairs for America Forward.
"...when business, government and the social sector work together in this way, large- scale social change is possible."
-Bill Crim, President and CEO of United Way of Salt Lake
From New York City to Salt Lake County, Pay for Success - an innovative funding approach to driving government dollars toward high-quality, effective programs that measurably improve lives and communities - is being used more and more to catalyze problem-solving and fill the gap left by diminishing public resources for social programs. New Profit and America Forward have been strong supporters of the model through our investments in the Massachusetts Juvenile Justice Pay for Success Initiative and various policy advocacy efforts, which we've covered in detail here.
The approach is still very new in the U.S., having been employed for only the last three years, but we're starting to see tantalizing updates and insights from some of the initial programs. The results released in July from the Riker’s Island Project in New York City, which targeted prison recidivism for at-risk young men, were very different from the results released recently in the Early Childhood Education Project in Salt Lake City. However, they both pointed in the same direction—Pay for Success can work to get better results out of taxpayer dollars that are being directed towards social problem-solving.
The announcement yesterday by the United Way of Salt Lake (UWSL) regarding the outcomes of the first county-level Pay for Success project in the country was particularly significant. The headline of the UWSL press release sums up the results: Social Impact Bond for Early Childhood Education Shows Success. To date, 109 out of 110 at-risk Utah students have avoided special education services after receiving access to high-quality preschool, in line with the strategy behind the program. This is a 99 percent success rate, which is both incredibly impressive and also begs questions about how such a high success rate was achieved. As those stakeholders in the Riker’s Island Project did, the Utah Pay for Success community should be open and transparent about the evaluation design, process, and analysis, in order to provide insight that the Pay for Success community can use to continually advance and improve the approach. This is especially true for those of use who are working hard to educate policymakers on the power and potential of Pay for Success.
Click the links below to read some of the news coverage of the Utah Pay for Success program:
- The New York Times: For Goldman, Success in Social Impact Bond That Aids Schoolchildren
- The Salt Lake Tribune: Preschool Paying Off For Goldman Sachs And Utah Kids, According To United Way
- Reuters: Goldman Nets Payout As Social Impact Bond Project In Utah Meets Targets
At America Forward, we believe that Pay for Success has the potential to bridge the divide between the “business as usual” system —where we continue to provide the same services, in the same way, to address the same problems but with little to no accountability for achieving the desired results – to the future we want. As of now, we're seeing the approach employed to decrease the need for special education for low-income children, increase employment opportunities for those seeking second chances, and provide the opportunity for families to stay together and thrive without the need for government intervention or support. It is only by continually refining and building on the approach that we can solve these big and complex challenges. We stand ready to support the learning around Pay for Success and will continue our advocacy efforts to build bipartisan support for the approach among policymakers.