Corporation for National and Community Service and Harvard University Select Pennsylvania for 'Pay for Success' Technical Assistance Award

'Pay for Success' Partnerships Raise Private Investment for Evidence-Based Services Benefiting Pennsylvanians

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Mar 11, 2015, 04:50 ET

HARRISBURG, Pa., March 11, 2015 /PRNewswire-USNewswire/ -- Governor Tom Wolf announced today that Pennsylvania was selected as one of five states and localities to receive technical assistance from the Harvard Kennedy School to help develop Pay for Success (PFS) projects.

Administered through the Social Impact Bond Technical Assistance Lab (SIB Lab) at the Harvard Kennedy School, the competition—run with support from the Corporation for National and Community Service Social Innovation Fund and the Pritzker Children's Initiative—received applications from 30 state and local governments.

"My Administration is committed to finding and making key investments to improve the lives of Pennsylvanians and also being a thoughtful steward over our state's resources," said Pennsylvania Governor Tom Wolf. "On behalf of the citizens of this great Commonwealth, Pennsylvania is honored to be selected among state and local governments working to find cost-effective and efficient solutions to helping our most vulnerable citizens. I am also thankful to Representative Stephens for his leadership in making this project successful."

PFS performance contracts – also known as "Social Impact Bonds" – provide an innovative strategy to finance evidence-based programs. PFS contracts are rigorous, binding agreements based on a straightforward proposition: taxpayers will only pay for services that actually get results and save money in the long-run.

"I'm thrilled Harvard approved my application for a Government Innovation Fellow to help us develop Pay For Success programs in Pennsylvania," said State Representative Todd Stephens (R-Montgomery) who authored the grant application last year. "Utilizing this approach in areas like early childhood education will allow the private sector to invest in Pennsylvania programs that are delivering results for our children while saving taxpayer dollars. I look forward to working with Governor Wolf to bring Pay For Success to Pennsylvania," said Stephens.

In the Pay for Success model, governments partner with private sector investors who provide up-front funding to promising service providers. Investors only receive a repayment from the government if objective benchmarks for savings and other benefits are achieved. Because governments pay only if the programs work, the PFS model has the potential to effectively allocate taxpayer dollars while increasing funding for programs that deliver improved social outcomes. These public-private partnerships will be selected on a competitive basis, and payment will only occur after validation by an independent, third-party evaluator.

Pay for Success projects on homelessness, early childhood education and recidivism are currently underway in six states, counties and cities across the country, and many more are in development. Governor Wolf's proposed 2015-16 budget enables Pennsylvania to enter into Pay for Success contracts, and identifies five high-priority areas:

Early childhood care and education, including pre-kindergarten education and services that address maternal and child outcomes from pregnancy through age 2;
Education, workforce preparedness and employment, including school-to-work programs and alternative education services;
Public safety, including programs that reduce recidivism;
Health and human services, including addiction treatment, chronic homelessness, supportive housing and child welfare; and
Long-term living and home- and community-based services.

The SIB Lab evaluated project proposals based on the potential of the project to advance the PFS field by applying the model in new areas or policy fields, the level of commitment and readiness demonstrated by the applicant, and the feasibility of the proposed projects to scale.

The SIB Lab will provide each winning government with a full-time Government Innovation Fellow to be based for one year in the government agency that is spearheading the city of state's pay-for success initiative, pro bono technical advising from senior experts, up to six months of programmer and data analyst time, and a small pool of flexible funding that can be used to remove barriers to implementation of PFS projects.

MEDIA CONTACT: Jeff Sheridan - 717.783.1116

SOURCE Pennsylvania Office of the Governor