The Urban Institute’s Pay for Success Initiative announced its training and technical assistance recipients in January. Since then, we’ve been working with communities at various stages of PFS project exploration: from communities that haven’t yet decided on a topic area for a project, to communities that have settled on all the details and just need to fine-tune their evaluation design.
For our sites in the early stages of PFS exploration, we want to share three early lessons learned:
1. Start broad and take a comprehensive look at your community. Every community experiences challenges in more than one area, and only some of those issues will be appropriate for a PFS project. By keeping options open at the beginning, a government can maximize its chances of identifying an intervention that is appropriate for PFS.
One benefit of PFS is that it allows governments to think creatively about problems and solutions. Because the government only pays if success is demonstrated, PFS may allow governments to contract for a solution that would otherwise be difficult within their environment – such as paying for prevention or trying an intervention that may not historically have full political support.
Thinking broadly within the early exploration period also allows for fruitful conversations about challenges, solutions, evidence, and outcomes that can benefit the community in the long–term even if no PFS project comes to fruition.
2. Use an outcomes lens from the beginning. By outcomes lens, we mean thinking less about what the project will do(e.g. provide slots to 100 applicants or build a road) and think more about what the program will achieve. Start with the desired outcomes and think about programs that will lead to those outcomes (and have the evidence to boot).
Governments are often more accustomed to thinking about the services provided through a particular grant than about the outcomes those services will produce. PFS flips this script. By measuring outcomes rather than inputs and services, PFS incentivizes stronger, more effective government contracting. Thinking about the outcomes that the project promotes is essential from the start. And even if a PFS project does not ultimately come to fruition, that shift in thinking can lay the groundwork for future outcomes-oriented innovation.
One of PFSI’s goals is to support the use of evidence-based policy making. In our early PFS exploration with local governments and nonprofits, we have found alignment with this goal—governments are enthusiastic about demonstrating results and pursuing programs that have been shown to work.
3. The importance of a government champion and local buy-in cannot be overestimated. A project leader with the influence and know-how to gather support from other areas of government, local foundations, and local service providers is essential. PFS projects that align with local priorities are more likely to gain traction with local governments than those without. Aligning with broader initiatives at the state level can also open up funding for the project.
The bottom line: When we think of early PFS feasibility, we often think about the analytics— the number of constituents served, the cost to implement the program, the savings, or the effect size. But in the beginning, qualitative aspects also matter for community buy-in. Since leadership matters for the ultimate success of the project, invest in making sure that the PFS project you pursue is a project the community and its leaders can get behind.
These lessons have resonance for governments exploring PFS as well as those seeking a more efficient, effective approach to solving challenges facing their communities.
As an organization, the Urban Institute does not take positions on issues. Scholars are independent and empowered to share their evidence-based views and recommendations shaped by research.