Pay for Success: To Invest or Not to Invest? Assessing the Innovation

Published Tuesday, November 1, 2016 | by Ben Hecht, Ellen Ward

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In this blog, part two of a new series, Living Cities discusses the second aspect of its initial screening criteria for Pay for Success (PFS) projects: innovation. Living Cities analyzes three key forms of innovation—capital, public sector, and service provider—that determines whether a project can produce large-scale change. In PFS, capital innovation includes unique funding models and making sure there are financial incentives for all parties to go above and beyond predetermined success rates. Public sector innovation revolves around PFS acting as a "gateway drug" to an outcomes-driven culture. The last type of innovation, involving the service providers, includes a focus on outcomes rather than inputs and compliance.