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This post originally appeared on Nonprofit Finance Fund’s Blog and is co-authored by Deirdre Flynn, Associate Director, Pay for Success Program.

The Pay for Success (PFS) field has gone through astonishing changes in the years since the first contracts launched in the US. Those early projects (Rikers Island, Massachusetts Juvenile Justice, New York CEO, Cuyahoga) all only wavered from the original concept in minor ways. In brief, those projects all had payment based on a Randomized Control Trial (RCT) evaluation with the vast majority of success payments linked to the formal population-level

The ability of disadvantaged students to navigate a path to and through college has never been more critical in an era with a broad wage gap based on post-secondary educational attainment. While Pay for Success (PFS) has been deployed effectively in a variety of social policy domains, the movement has largely bypassed the field of higher education. This comes despite the fact that the achievement of longer-term metrics such as a persistence, graduation, and labor market outcomes, rather than student enrollment or other interim measures, are now driving the conversation

The prevalence of data in the social sector means that government agencies and nonprofit providers, in theory, have a wealth of information at their disposal to understand what works and more effectively deploy resources to achieve better outcomes. Administrative data (data collected by governments or nonprofits as part of administering a specific program) in particular provides a cost-effective and accurate way to understand participant outcomes and break the silos between agencies serving similar populations who operate in different policy domains.

The practical reality is that providers and government agencies cannot easily