News and Insights

Third Sector coordinated a panel session on Pay for Success at the recent Do Good Data Conference hosted by the Impact Lab in Chicago. A standing-room-only crowd came to learn how we can use measured outcomes to bring effective programs to those most in need. Alongside Sarah Jalbert from Abt Associates, Sotun Krouch from Roca, and Eileen Neely of Living Cities, each providing their perspectives on Pay for Success, we were able to fully illustrate the innovative model why it is an effective way for communities to address social issues. …

Last month, Senior Analyst Marcia Chong testified before the Travis County Commissioners Court. Alongside Managing Director Rick Edwards, Marcia presented Third Sector’s work with the Austin/Travis County Health and Human Services Department in assessing the feasibility of a Pay for Success project in teen pregnancy prevention. Third Sector’s work in Austin/Travis County was supported by its Social Innovation Fund grant. Watch the Presentation Here Third Sector is continuing its work in Austin/Travis County through its second cohort of Social Innovation Fund grantees, focused on workforce development. Third Sector will work …

By Joe Gayeski and Mary Beech Pay for Success (PFS) is one way local and state jurisdictions can address pressing social issues in their communities. By integrating data and building rigorous evaluation into government contracting, PFS can reward social services that demonstrate measurable impact. To make this possible, PFS leverages private capital. The model’s innovative cross-sector funding has attracted more attention than any of its other aspects, prompting the question of the role impact investing can play in the public provision of social services. The financing question was well put …

By Priya Shah and Dan Peck In early April, Third Sector was invited to share our approach to performance-based policy at San Francisco State University (SFSU). We shared our expertise in leveraging data to inform social policy to a class of junior and senior sociology students taught by Professor Jason Luger. The highly interactive 90-minute discussion not only combined findings from our data systems work with the sociological theory discussed in their coursework, but also resonated with the students’ own personal, community-based experiences. We commenced the group discussion with a …

This week, Third Sector Capital Partners, Inc. was congratulated by White House staff alongside other Social Innovation Fund grantees for its work in Pay for Success. Third Sector’s Second SIF Cohort adds five feasibilities to the growing number of Pay for Success engagements across the country. “The Obama Administration’s efforts to explore and test PFS are part of our broader effort to capitalize on the dramatic increases in the data and information we have available, and the dramatic improvements in our ability to harness them – and to use these …

By Sithara Kodali Last month, the President signed the Evidence-Based Policymaking Commission Act of 2016 into law. Though the law itself is new, the ideas within it are not. The Act is the latest iteration in national trend towards performance-driven policy and practice, the same movement that is driving the pursuit of Pay for Success (PFS). Below, we highlight some early initiatives in government performance, the progress the field has made, and the lessons earlier policies can teach us today. Introducing Performance to Policy: Federal and Local Initiatives In the …

By Nadia Ahmed and Mary Beech It’s said that marathons are won well before the starting gun goes off. When the runners arrive on race day, the most successful will have put in enough training to know exactly what to expect. When governments pursue a model as innovative as Pay for Success (PFS), pilot programs (“pilots”) function like a runner’s training. Before government and project partners enter into multi-year ‘marathon’ contracts with various financial obligations, pilots play a key role in ensuring the success of PFS projects. Unlike a formal …

Despite the rapidly growing interest in Pay for Success contracting in the United States, little attention has been given to the enabling environment, including regulatory policy. In partnership with Perry Teicher, Impact Finance Fellow at Orrick, Herrington & Sutcliffe LLP, John Grossman and Marcia Chong have compiled a legislative review of state and local legislative initiatives that enable Pay for Success contracting. The review offers policy and legislative recommendations for lawmakers considering PFS legislation. Authorizing Pay for Success Projects: A Legislative Review and Model Pay for Success Legislation READ THE …

By George Overholser Eight years ago, I pitched the Pay for Success concept as a new kind of a money back guarantee. Government would pay for a social service, impact would be rigorously measured, and if impact fell short, government would get its money back. Think of it as impact insurance, or a Social Impact Guarantee – SIG for short. A couple of years later, Social Finance UK came up independently with a different approach. Instead of offering a money back guarantee they invented the Social Impact Bond (or SIB). …

Senior Associate Sithara Kodali has been featured in an interview with the Fletcher Social Investment Group, a student-run organization based at the Fletcher School of Tufts University. In the podcast, Sithara provides an overview of Pay for Success, its cross-sector mechanics, and its promises for government and underserved communities. LISTEN HERE

On February 29th, Co-President and Co-Founder Caroline Whistler joined a panel at the Brookings Institute’s event, “The Global Potential and Limitations of Social Impact Bonds”. Featuring international leaders in Pay for Success and early childhood development, Caroline Whistler presented the Cuyahoga County Partnering for Family Success Program as an example of how the cross-sector model can better deliver services for children in need. https://youtu.be/n2nhieOOkEM?t=5h2m33s

By Emily Fabiaschi and Will Toaspern Pay for Success (PFS) is driven by the conviction that investing in preventative programs is a better use of public resources than paying for remedial services down the road. No services are more preventative than those provided at the beginning of a child’s life. When multiple domains of impact are incorporated into a PFS project, the unique, multi-faceted nature of home visiting becomes a distinctive strength.   Governments across the United States are currently preparing prenatal and early childhood PFS projects. Last week, South …

Third Sector’s Pay for Success projects in Cuyahoga County, Ohio, Santa Clara County, California, and the Commonwealth of Massachusetts were featured in Stateline, a daily report on state policy from the Pew Charitable Trusts. Co-founder and Co-President Caroline Whistler is quoted, The bonds are meant to foster creative solutions to entrenched social problems, with an emphasis on tracking results along the way. As such, they are a good fit for projects that address homelessness, said Caroline Whistler, who co-founded Third Sector Capital Partners, a financing group that has worked on …

By Celeste Richie and Katherine Shamraj Rigorous evaluation is a cornerstone of Third Sector’s approach to Pay for Success (PFS). The success of a PFS project hinges on quality evaluation methods to determine whether an intervention achieves desired outcomes. In our engagements, we advocate for the most rigorous method appropriate–including well designed Randomized Control Trials (RCTs) and high quality Quasi Experimental Designs (QEDs) studies–for a given intervention. Third Sector’s insistence on rigor is a differentiator. Only four PFS programs launched in the US to date have used RCTs; three of …

By Nadia Ahmed and Will Toaspern Last week, Third Sector engaged with some of the country’s most forward thinking leaders at the Salt Lake County Innovation Summit in Salt Lake City, Utah. We connected with over 400 attendees who share our commitment to innovative solutions to society’s toughest problems. Pay for Success (PFS) was at the center of the conversation, including a panel entitled “Pay for Success 2.0” moderated by Third Sector Co-Founder and Co-President, Caroline Whistler. To a standing-room only crowd, Caroline facilitated a discussion between the industry’s leading …

In Cuyahoga County, Ohio the nation’s first county-level Pay for Success (PFS) project is helping policymakers and government leaders measurably improve the lives of its vulnerable families. Over the 5-year duration of the PFS project known as the Cuyahoga Partnering for Family Success Program, community leaders in Cuyahoga County are using Pay for Success to improve services for vulnerable families. Read the Full Report Here

Pay for Success (PFS) is often spoken about in terms of finance. Many within the PFS field describe the cross-sector contracting model as a new, innovative way to finance social services for vulnerable people. While funders are important to PFS for several reasons, the model is not, at its core, a financial tool. Rather, PFS is an opportunity to improve government accountability and transparency by changing the way government contracts for social services. Procurement is, admittedly, a wonky term. Many Americans are unaware that local and state governments routinely contract …

By John Grossman and Kevin Tan. Pay for Success (PFS) holds promise. By diverting resources to programs that are measurably successful, the PFS model could move the needle on many seemingly intractable social problems. In the United States, however, PFS is still a niche concept. In the three years since the first PFS contract was signed in New York, only seven more PFS projects have been launched in the United States. This is reason for reflection. Observers and practitioners in the field alike should think deeply about why the national …

Third Sector Capital Partners, Inc. has been featured in a webinar series exploring Pay for Success and its potential. Hosted by the Chronicle of Philanthropy, CEO and Co-Founder George Overholser answered questions about the model, and how its addressing the most pressing issues for vulnerable communities around the United States. George spoke on a virtual panel discussion that included the James Irvine Foundation, Living Cities, and the Urban Institute. Their discussion has been published in three parts: Pay for Success Financing: Overview “What is pay for success, who uses it, …

Caroline Whistler, Co-Founder and Co-President of Third Sector Capital Partners, Inc., has been named as one of the Chronicle of Philanthropy’s 40 under 40. The list features young nonprofit and philanthropic leaders who are driving forward innovative solutions to pressing problems. The financing portion of such deals has gotten the lion’s share of attention…but Ms. Whistler says the real potential for transformation is in persuading governments to tie funding to results for people in need: “It allows government to step back and say, ‘Wait, what do we really want to …