Progress with Pay for Success

Early this year, The James Irvine Foundation and Nonprofit Finance Fund launched the California Pay for Success Initiative to provide flexible funding and expert support for government and community leaders exploring opportunities to create Pay for Success agreements. Pay for Success is an innovative and promising approach to funding preventive social services. While Pay for Success experiments were underway in several other states, none had been structured in California.

Over the past six months, we’ve seen tremendous progress within the cohort of the initial five projects selected and in the development of a field of innovative Pay for Success practitioners and funders in California. In addition to the initial five projects selected, First 5 LA, and the Children & Families Commission of Orange County were recently added to the group. These latest awards support continued efforts toward LA & Orange Counties assessing feasibility on how to sustain their respective newborn health programs through Pay for Success mechanisms.

Additionally, Santa Clara County, also an awardee of the California PFS Initiative, recently announced that it will be partnering with Abode Services in its Pay for Success effort to target chronic homelessness through long-term housing and supportive services. As Santa Clara moves forward, we will learn more about the nuances of structuring and launching these social finance agreements in the California context.

Beyond these local projects we’ve seen the broader Pay for Success conversation and resource landscape evolve. At the state level, there was the recent passage and signing of AB 1837, which will identify and fund three California counties to begin implementing PFS contracts focused on recidivism reduction. At the national level, the White House’s Social Innovation Fund announced eight Pay for Success grantees, including two key partners in Irvine’s California work: Third Sector Capital Partners and Nonprofit Finance Fund.

On November 4th we’ll bring together the Pay for Success project teams from across California, and look forward to sharing real-time highlights from their experiments with this social finance innovation. As always, we welcome your thoughts and suggestions as this work evolves in service of the people of California.

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