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The Pay for Success Handbook

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Suzanne Adatto, Stanford Graduate School of Education

Paul Brest, Stanford Law School

Copyright Year: 2020

Publisher: Suzanne Adatto and Paul Brest

Language: English

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Table of Contents

Part One: Introduction and Overview

  • Antecedents: The Oklahoma "Milestones" Program
  • Introduction to an Outcomes Framework: The Theory of Change for a Service Delivery Program
  • Pay for Success

Part Two: Case Studies of PFS Projects

  • New York State's PFS Contract for Increasing Employment and Improving Public Safety
  • Other PFS Programs

Part Three: Analysis

  • The Government's Role
  • Requisites for a PFS Project from the Government's Perspective
  • Application of the Criteria to Various PFS Programs
  • The Service Provider's Perspective
  • Data and Organizational Challenges to an Outcomes-Oriented Approach

About the Book

Government agencies frequently contract with nonprofit or for-profit organizations to provide services to improve the well-being of their clients―for example, by reducing recidivism, homelessness, or drug use. Governments have traditionally paid service providers on the basis of the number of clients they treat.

The past decade has seen a number of Pay for Success (PFS) or results-based finance (RBF) programs, in which service providers are paid for their outcomes or results. For example, whereas a government agency contracting with a service provider to reduce recidivism among young men released from prison would traditionally have paid the service provider for the hours spent counseling a client, a PFS contract pays the organization for success in reducing the clients’ rate of recidivism from some baseline.

This handbook is written for government officials considering the adoption of Pay For Success (PFS) programs and for students in public policy and business schools interested in studying outcomes-oriented government contracts for services. Part One introduces concepts necessary to develop and operate a service delivery program and then surveys some of the issues specific to PFS. Part Two presents two detailed case studies and a number of shorter descriptions of PFS programs. Part Three focuses on the components of PFS programs; it also discusses barriers to their development and ways of overcoming them.

An editable file (docx) is also available.

About the Contributors

Authors

Suzanne Adatto holds an MA from the Stanford Graduate School of Education and an MBA from the Stanford Graduate School of Business.

Paul Brest is Professor Emeritus (active) at Stanford Law School, a lecturer at the Stanford Graduate School of Business, and co-director of the Effective Philanthropy Learning Initiative at the Stanford Center on Philanthropy and Civil Society. He was president of the William and Flora Hewlett Foundation from 2000-2012.