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Corporation for National and Community Service: Social Innovation Fund Pay for Success Cooperative Agreements

Deadline: September 20, 2016

Pay for Success offers innovative ways of partnering with philanthropic and private sector investors to create incentives for service providers to deliver better outcomes at lower cost, thus producing the highest return on taxpayer investments. The concept is to pay providers after they have demonstrated success, not based on the promise of success. Pay for Success (PFS) financing is a mechanism for increasing investments in effective social interventions by changing the way government allocates and invests its resources – focusing on results and outcomes. This grant competition seeks to accelerate the development of Pay for Success projects. Overall, this will aid in advancing the emerging models that align payment for social services with verified social outcomes.

PFS projects typically involve two elements:

  1. PFS Agreements, in which Payors and Service Providers agree that all or some portion of payment for services will not be paid until an agreed-upon set of outcomes has been achieved, or level of impact has been verified. Achievement of outcomes is typically verified by an independent evaluator using a robust methodology agreed upon by all parties to a transaction.
  2. PFS financing, sometimes referred to as “social impact bonds” or “outcomes financing,” in which third-party investors provide financial resources necessary to carry out the intervention. Given that verification of outcomes that trigger outcomes payments may take several years, Service Providers often will not have the resources to self-finance the costs of implementing a preventive intervention during an agreement period. PFS financing covers these costs. Such third-party investment is typically at-risk and return of capital (and any potential return on investment) via the Payor is dependent, in whole or in part, on the achievement of outcomes identified in the PFS Agreement.

This PFS competition seeks to build the pipeline of “PFS-ready” governments and address the developmental needs of PFS projects, to increase the likelihood that they will launch. By (1) enhancing the data readiness of state and local governments and tribes where PFS Projects are currently in the pipeline or that can demonstrate specific interests in developing PFS Projects in the future, and (2) providing developmental support to SIF-supported PFS projects, this competition aims to:

  • Increase the ability of Service Providers and government entities to generate, analyze, and manage data to improve outcomes across diverse issue areas and geographies
  • Increase the number of high-auality PFS Projects occurring through partnerships between state and local governments and nonprofit organizations

Applicants may apply to provide services or funds to eligible entities under one or both of the following approaches: 1) Data Readiness of State and Local Governments and Tribes for PFS, and 2) Developmental Support for SIF PFS Projects.

This competition will only award funds to applicants targeting one or more of the issue areas listed below:

  • Youth Development – Preparing children and youth for success in school, active citizenship, productive work, and healthy and safe lives, including crime reduction initiatives focused on juvenile delinquency and victimization prevention and response
  • Economic Opportunity – Increasing economic opportunities and financial stability for economically disadvantaged individuals and families
  • Healthy Futures – Improving health outcomes, promoting healthy lifestyles, and decreasing health disparities that disproportionately affect low-income communities

Amount: Up to $7,300,000 is available for awards ranging from $350,000-$1,800,000. Within six months of receiving the federal award, recipients are required to select subrecipients, service recipients, or both through an open, competitive process. (Subrecipients may receive funds and/or technical assistance services; service recipients receive services only.) Recipients must run an open competition that is available to all eligible entities beyond their own existing grant portfolio or network. Recipients must make subawards or provide services in annual amounts of at least $75,000 but not more than $400,000 and should be of sufficient size and scope to enable the subrecipient or service recipient to build its capacity to eventually launch high-quality PFS projects.

Eligibility: Nonprofit organizations, public or nonprofit universities, state and local governments (and other political subdivisions), tribes, and faith-based organizations.

Link: http://www.nationalservice.gov/build-your-capacity/grants/funding-opportunities/2016/round-2-fy-2016-social-innovation-fund-pay

Note: Applicants are encouraged to send a Notice of Intent to Apply by Wednesday, August 31, 2016 (optional).

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