Pay for Success, Collaboration Among Federal Agencies Would Be Helpful as Governments Explore New Financing MechanismsPay for Success, Collaboration Among Federal Agencies Would Be Helpful as Governments Explore New Financing Mechanisms

Pay for Success (PFS) - also known as Social Impact Bonds - is a new contracting mechanism to fund prevention programs, where investors provide capital to implement a social service. If the service provider achieves agreed upon outcomes, the government pays the investor. PFS originated in the United Kingdom and now a small number of state and local governments in the United States are employing this method. The Government Accountability Office was asked to provide information on PFS, including how selected PFS projects have been structured and what potential benefits these projects can provide, how selected PFS contracts have been structured to address potential project risks, and the potential roles for the federal government. This report presents their findings and recommendations.