The Nonprofit Finance Fund (NFF) and The James Irvine Foundation have announced today an initial $2.5 million investment to make Pay for Success projects a reality in California.
According to a news statement, Pay for Success projects have yet to launch in California but are underway in a few other states. These agreements involve up-front funding from private investors for preventative services that, if effective and outcomes are achieved, result in a return on investment for the investors by government.
Private investors take on initial risk, governments only pay for outcomes, and cost-saving programs with demonstrated effectiveness have access to new funding from private sources.
In this “California Pay for Success Initiative”, Nonprofit Finance Fund will select approximately three to eight leaders throughout California to support through an initial round of funding, with additional funding available to these leaders throughout the year.
Participants will form an active learning cohort and will have opportunities to share experiences, challenges and results with the goals of further testing the Pay for Success concept and expediting additional Pay for Success agreements.
“Pay for Success has generated tremendous interest and excitement as a concept,” said Don Howard, Executive Vice President of The James Irvine Foundation. “But, these are complex agreements that are difficult to develop because they require multiple partners to do business in new ways. That’s why so few Pay for Success agreements exist nationally, with none yet in place in California. Our goal is to catalyze the creation of these agreements so that the promise of Pay for Success can be realized for the benefit of all Californians.”
