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Looking into the Future of Pay for Success at the Sorenson Winter Innovation Summit

Written by Roger Low, America Forward Policy Director

Earlier this month, at the 2020 Sorenson Winter Innovation Summit in Salt Lake City, innovators and leaders in government, philanthropy, impact investing and the nonprofit sector assembled to discuss how to more effectively deploy capital to drive better outcomes for communities across the country.

Jim Sorenson, a leader and visionary in the Pay for Success and Impact investing space, hosted the gathering with his team at the Sorenson Impact Center.

America Forward Policy Director, Roger Low participated in the summit and moderated an energizing “deep dive” conversation about the future of Pay for Success with Sindhu Lakshmanan from Living Cities, Sara Peters from Project Evident, and Jeff Shumway from Social Finance

After nearly a decade of field-building in the United States, the panel agreed Pay for Success is at an inflection point, with meaningful challenges associated with efficiently scaling it. We discussed the need for broader, more strategic engagement with a larger group of state and local policymakers and nonprofits to more deeply understand some of the systemic challenges the field faces today. We also talked about the urgent need to put equity at the center of this conversation, given that Pay for Success used thoughtfully can increase equity, but used recklessly can actually exacerbate racial and other demographic disparities.

We explored the catalytic potential of the Social Impact Partnership to Pay for Results Act (SIPPRA), a new $100 million federal outcomes fund housed at the Treasury Department, which America Forward championed and fought hard to enact and talked about the potential for more widespread progress by creating and seeding federal, state and local outcomes funds, building and improving on the SIPPRA template. We discussed the value of building projects that tie funding to both long-term and shorter-term outcomes, with the goal of streamlining the Pay for Success process and allowing for a more customizable approach that can work across a range of time horizons and provider types. Additionally, we talked about the need for additional support and funding for local and regional nonprofits to build stronger, more continuous evidence and the challenges associated with achieving enrollment targets across many projects. 

Critically, we agreed that the Pay for Success process needed to be made more feasible and attractive to a wider array of nonprofits and governments who face a host of competing demands on a regular basis, be it from status quo programming and fundraising, or other types of evidence-based implementation and funding strategies. We generally agreed on the potential of using Pay for Success to support a suite of customizable services rather than a single “silver bullet” approach, and the value of “building periods” or “soft launches” to pilot and fine-tune implementation before a Pay for Success project fully launches and begins paying based on rigorously-measured outcomes.

Our conversation touched at a number of points on policy recommendations our America Forward Coalition organizations proposed in the “How to Restore Belief in Government by Equipping Reformers to Deliver Results” section of our “United to Move America Forward: A Policy Playbook From 100+ Social Innovators to Advance Equity and Opportunity in America,” our 2020 election playbook. 

We have a lot more work to do to realize the shared vision we discussed at our panel last week. We look forward to rolling up our sleeves with our Coalition, and getting to work!

To learn more about America Forward’s work on Pay for Success please contact us at America_Forward@newprofit.org. Also, in case you missed it, read more about the current and evolving state of the Pay for Success field in this recent Social Innovation Review article co-authored by Roger Low, Sindhu Lakshmanan, and Third Sector CEO and Co-Founder Caroline Whistler.

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