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Findings from Pay for Success Feasibility Studies

diverse-childrenWith support from the Social Innovation Fund, the Institute for Child Success (ICS) has worked extensively with jurisdictions across the U.S. to explore the suitability of Pay For Success (PFS) financing as a means of improving child outcomes by expanding evidence-based early childhood interventions. We selected four jurisdictions through a competitive process and began our work with them in April 2015. We are pleased to release our feasibility study findings and supporting materials here, and summarize the results of our analyses below. We hope cities, counties and states interested in PFS financing, early childhood service providers, researchers and policymakers, funders and impact investors will benefit from the experience and analyses of these four places.

Jurisdictions ranged from a small southern city to two states on different ends of the country, and no two programs looked the same. We have found multiple types of early childhood interventions feasible for PFS financing: child abuse prevention, preschool, and home visiting. What they did have in common were strong public/private partnerships; a driving dedication to improving life for families and children; and a willingness to think outside the box.

 

Connecticut

ICS partnered with the Department of Children and Families (DCF), the Office of Early Childhood (OEC), and the Department of Social Services (DSS) in addition to two local foundations to explore the feasibility of expanding Triple P, a parenting education and support program, using PFS financing. Triple P uses a public health approach and is the only preventive intervention shown through rigorous evaluation to improve child welfare outcomes at a county level. We found that it would be feasible to reduce child maltreatment and out-of-home placements for whole Connecticut communities by implementing Triple P with PFS financing.

Sonoma County, California

ICS found PFS to be a feasible way improve outcomes for Sonoma County’s children and communities through high-quality preschool. Feasible outcomes include: third grade reading and math scores; kindergarten readiness; and possibly reduced special education. Sonoma could feasibly serve 3,600 children over 5 years by utilizing PFS funding.

Sonoma County also explored an expansion of the Nurse-Family Partnership home-visiting program. Although NFP is well suited to PFS financing (demonstrated by its Pay for Success project in South Carolina) we found that PFS is not a feasible way to finance an expansion of NFP in Sonoma County, because the baselines for preterm birth, emergency room visits and other PFS outcomes were already quite good; NFP researchers felt that, given the county’s relatively small population, the program could not make enough of an impact on those already-low baselines to justify a PFS project.

Spartanburg, South Carolina

ICS partnered with the City Manager’s Office and the Mary Black Foundation to explore the feasibility of expanding early care and education programs through PFS financing. We found the implementation of a continuum of services for young children that promotes healthy families feasible using a modified Pay for Success structure; the continuum includes:

  • Home Visiting (BirthMatters, Family Connects, Nurse-Family Partnership)
  • Parent Education & Support (Triple P, Text4Baby, ReadyRosie)
  • Early Learning (Early Learning Centers supported by Quality Counts)

While traditional PFS is difficult to implement in small communities, Spartanburg could feasibly implement this continuum of services over a 5-year period, with the potential to serve 4,000 families at all income levels.

Washington State

In partnership with Third Sector Capital Partners, ICS worked with Washington’s Department of Early Learning and Thrive Washington to explore PFS financing as a tool for expanding a suite of five home visiting programs in the state’s Home Visiting Services Account (HVSA) – Parents as Teachers, Parent-Child Home Program, Family Spirit, Nurse-Family Partnership, and Early Head Start Home-Based. ICS led the intervention-outcome analysis and found that all but one of the programs (Early Head Start Home-Based) yielded outcomes that are suitable for PFS contracts. We assessed the readiness of 45 service providers using four home visiting program models across 25 counties. While NFP is the only program that currently has the capacity to expand under PFS (or other outcome-based contracting), the other three home visiting models are interested in outcome-based funding and could build the capacity to do so within a reasonable timeframe. The feasibility study found that a significant investment in time and resources is required for the HVSA to move forward with a PFS project.

Conclusions

The feasibility study process in these jurisdictions was eye-opening not only to the teams on the ground but also for the ICS Pay for Success team, and we seek to share these lessons through our ongoing work in the field. We were privileged to work with leaders in local communities who were envisioning non-traditional ways to invest in families and children, for the betterment of individuals and families. We continue to view Pay for Success not as a trendy financing strategy, but as a valuable tool to diversify early childhood funding and bring the sector into an outcomes-based framework committed to what works.

We encourage you to view the feasibility studies; to explore the templates we have created with SIF support to help jurisdictions begin exploring feasibility on their own; and to join our mailing list, where we will soon announce our next feasibility study competition!

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