There’s a chance that lawmakers in your city or state have recently floated something called “Pay for Success” as an innovative way to fund public services. Also known as Social Impact Bonds, Pay for Success programs bring the high-risk attitude of venture capital to critical, yet underfunded public services.
This week we, along with our allies, released A Guide for Evaluating Pay for Success Programs and Social Impact Bonds to help advocates better understand these new alternatives to public financing. Now communities can ask tough questions about a Pay for Success programs’ impact on vulnerable individuals and the public.
Though Wall Street investors like Goldman Sachs and Bank of America consider Pay for Success a “win-win,” some of these new programs look better on paper than they do in reality. The first program tried in the U.S. failed to reduce the rate by which adolescents housed on Rikers Island returned to jail.