CNCS Announces $11.2 Million Pay for Success Grant Competition to Fund Innovative Social Solutions

New Social Innovation Fund initiative seeks to advance Pay for Success model where governments pay service providers once outcomes are successfully achieved

WASHINGTON, D.C. – The Corporation for National and Community Service (CNCS) today announced the launch of its inaugural Social Innovation Fund (SIF) Pay for Success grant competition. The competition will provide $11.2 million in grants to help cities, states and nonprofits develop Pay for Success projects where governments pay service providers only when there are demonstrable results.

In times of constrained budgets and high demand for social services, the Obama Administration is encouraging sectors to work together to identify new sources of capital, develop innovative solutions, and focus on outcomes instead of processes. Pay for Success is an approach that partners private, public and non-profit sectors by aligning payments for social services with verified social outcomes. This allows the public sector to receive the highest return on taxpayer investments, since government funds are paid once outcomes are successfully achieved.

“The thriving community of the future will be one where business, government, and nonprofits work together to discover innovative, effective solutions and tap new sources of capital to help these solutions grow,” said Lisa Garcia Quiroz, CNCS Board Chair and Senior Vice President, Corporate Responsibility and Chief Diversity Officer at Time Warner Inc. “I am proud that CNCS and the Social Innovation Fund are helping to usher in this new era by providing the resources, expertise, and evaluation needed to catalyze action and results.”

“To meet the scale and scope of the challenges our communities are facing, we will have to go beyond the status quo and develop new partnerships and approaches that lead to greater impact,” said Wendy Spencer, CEO of CNCS.  “Through Pay for Success, we are using innovation to increase impact and piloting a new way of doing business that is laser-focused on results.”

The PFS Competition is to designed to gather information about how pay for success can be implemented effectively, strengthen and diversify the pipeline of state and local governments as well as nonprofit service providers that are ready to participate in PFS, attract capital to solutions that work and collect and share knowledge about every step of the process.

Applicants can apply for three-year grants which provide between $200,000 and $1,800,000 per year to provide expert technical assistance to state and local governments to assess feasibility, structure PFS transactions and agreements, and build internal capability needed to execute effective PFS projects. Every SIF grant dollar must be matched by the grantee with non-federal dollars and services. And, in an effort to strengthen the field, SIF will share evaluation findings and grantees will be required to open source all project documents and contracts, when legally permissible.

“The Social Innovation Fund is about finding solutions that work and making them work for more people. Our Pay for Success competition takes this mission to the next level—attracting dollars to bring proven solutions  to scale, while cities and states with tightening budgets focus on solutions that work and only pay for results,” said Michael D. Smith, Director of the Social Innovation Fund.

The Obama Administration has been exploring and encouraging Pay for Success for the past few years. As a result, Pay for Success programs have been launched at the U.S. Departments of Justice and Labor. Congress gave CNCS the authority to launch a SIF-related Pay for Success pilot program as part of its 2014 appropriations legislation. Further, active PFS transactions are underway in states including NY, MA and UT, addressing issues such as recidivism, workforce development and early childhood education. Elsewhere, states and municipalities are pursuing PFS strategies supporting interventions to address a number of social challenges, from health interventions to chronic homelessness.

Applicants are encouraged to send a letter of intent by July 15 and applications are due by July 31 at 5 p.m. EST by August 4 at 5 p.m. EST.