Voices from PFS Pioneers: Tuscaloosa Research and Education Advancement Corporation and Social Finance Discuss Veterans Workforce Recovery PFS Project (Nonprofit Finance Fund)

By Casey Littlefield

At the heart of Pay for Success (PFS) is collaboration among uncommon stakeholders: nonprofit service providers, governments, and investors. The resulting partnerships are a critical and celebrated component of Pay for Success projects. Sometimes overlooked, however, are the ancillary relationships that develop within the stakeholder ecosystem during PFS project development: two government agencies collaborating to improve data collection, for example, or service providers and implementing partners working together to improve service delivery.

Social Finance and the Tuscaloosa Research and Education Advancement Corporation (TREAC) observed such moments of collaboration while structuring a PFS project to support employment outcomes for veterans suffering from post-traumatic stress disorder (PTSD), funded by a grant from Nonprofit Finance Fund (NFF).


In 2014, Social Finance partnered with Bank of America Merrill Lynch to assess the viability of using Pay for Success to expand evidence-based services for veterans in the areas of employment, wellness, and housing. The project, “Improving Outcomes for Veterans: Assessing Pay for Success Opportunities,” analyzed potential projects on six key dimensions of Pay for Success: target population, intervention and evidence, service provider, geography, economics and metrics, and outcomes payor.

The strongest potential project that emerged from this analysis was an expansion of an evidenced-based supported employment intervention, known as Individual Placement and Support, to a broader population within the Veterans Health Administration (VHA), under the leadership of Lori Davis, MD and managed by TREAC.

A grant from NFF provided a critical bridge to ready the project for PFS financing. Over 18 months, TREAC and Social Finance assessed the viability of the project and met with potential sites to gauge their interest in expanded services. It was during this work that the additional benefits of Pay for Success – systems-level and ground-level collaboration - became evident.

Systems-level collaboration for government

Any single federal entity is limited in the number of individuals it can serve through PFS because of simple budget constraints. Combining funds across entities allows for a larger project to serve more people, but can be challenging in practice. Simple in theory, the realities of asking different federal entities to allocate funds to the same project is difficult, as legislation strictly dictates how funding can be


In 2016, the Social Innovation Fund, the Corporation for National and Community Service, and the Department of Veterans Affairs drafted legislation that would allow them to work together for the first time. The result was a Notice of Funding Availability for up to $3 million in outcomes funding to provide unemployed or underemployed veterans suffering from PTSD with the individualized support necessary

to attain competitive employment. The project enabled by this collaboration will serve many more veterans than if any single federal entity had worked alone.

Meaningful collaboration at the ground-level

The Individual Placement and Support model requires mental health and vocational rehabilitation teams to break down siloed approaches, working together to address clients’ needs. The employment specialists need to know if their clients are following their mental health treatment plans, and the mental health teams need to know if their clients are succeeding in the work place.

This unique service delivery model requires consistent communication and collaboration between the two, normally separate, teams. We were thrilled that, during one introductory site visit, employees in the same VA Medical Center introduced themselves to one another for the first time! Irrespective of the PFS project, the mental health and vocational rehabilitation teams are now connected, and have a new understanding of integrated care. This in itself is a victory.

We at Social Finance are committed to building Pay for Success, not only as a funding mechanism, but as a means to improve practice and collaboration, as project stakeholders work to deliver outcomes for those in need.