3.3: Pay for Success

Invite grant applicants to use a "pay for success" approach

Other Information:

Pay for Success: Taking the principle of acting on evidence one step further, the Departments of Justice and Labor will be inviting grant applicants to use a "pay for success" approach, under which philanthropic or private entities (the "investors") pay providers upfront and are only repaid by the government if certain outcomes are met. Payment amounts are based, in part, on the amount that the Federal, State, or local government saves. A pay-for-success approach is appropriate where: (i) improved prevention or other up-front services can produce better outcomes that lead to cost savings at the Federal, State, or local level; and (ii) foundations or others are willing to invest. To date, the Administration has focused its Pay for Success planning on programs financed with discretionary appropriations. OMB invites agencies to apply a pay-for success model for programs funded by either discretionary or mandatory appropriations. Agencies should also consider using the new authority under the America COMPETES legislation to support incentive prizes of up to $50 million. Like Pay for Success, well designed prizes and challenges can yield a very high return on the taxpayer dollar.

Stakeholder(s):

• Department of Justice


• Department of Labor


• Philanthropic Entities


• Private Entities


• State Governments


• Local Governments


• Foundations

Indicator(s):

Indicator:1

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