Social Innovation Fund Launches New Pay for Success Grant Program

By Michael Smith

The Social Innovation Fund Pay for Success grant competition is open.

The urgency and complexity of our nation’s challenges require us to move beyond traditional approaches—to explore innovative solutions, demand evidence of impact, forge creative cross-sector partnerships, and identify new sources of capital that help us reimagine and expand return on investment. 

Our children and communities face difficult odds and demand that we rethink what’s not working and redouble our efforts to accelerate the pace of change. That is why I am excited to announce the Social Innovation Fund’s first-ever Pay for Success (PFS) grant competition, which will fuel state and local efforts to explore new social finance mechanisms that tap private sector dollars and provide payment only when there is demonstrable success.

Yesterday, I joined with colleagues from across the federal government, business, philanthropy and nonprofits at a White House roundtable on Impact Investing to discuss the Pay for Success grant competition, which will provide $11.2 million in grants to help cities, states and non-profits develop Pay for Success projects. Applicants are encouraged to send a letter of intent by July 15 and applications are due by July 31 at 5 p.m. Eastern.

The PFS competition is to designed to examine when and how pay for success works best, strengthen and diversify the pipeline of state and local governments as well as nonprofit service providers that are ready to participate in PFS, attract much-needed capital to solutions that work, and collect and share knowledge about every step of the process.

Consistent with the broader mission of the Social Innovation Fund, the PFS competition encourages the implementation of PFS projects in order to enhance the reach and impact of innovative community-based solutions in low-income communities. Applicants can apply for grants between $200,000 and $1,800,000 (per year for up to three years) to provide expert technical assistance and capacity building grants to help state and local governments assess feasibility, structure PFS transactions and agreements, and build the internal capability needed to execute effective projects. Every SIF grant dollar will be matched by the grantee with non-federal dollars and services. And, in an effort to strengthen the field, SIF will share all grant evaluation results and grantees will be required to make publically available all project documents and contracts, when legally permissible.

The Obama Administration has been exploring and encouraging Pay for Success for the past few years as a model to enhance return on the taxpayer investment. As a result, Pay for Success programs have been launched at the U.S. Departments of Justice and Labor. Congress gave the Corporation for National and Community Service 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 New York, Massachusetts, and Utah, 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.

At our core, 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—ensuring proven solutions have the dollars needed to scale, while cities and states with tightening budgets focus on solutions that work and only pay for results.

Please visit the PFS competition webpage to learn more about the grants program. Apply today or spread the word to others. Also, be sure to check out our schedule of application review webinars and resources for applicants. 

Michael Smith is the Director of the Social Innovation Fund at Corporation for National and Community Service.

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