Pay for Success: Lessons Learned from Salt Lake and NC

Abstract

To expand social programs and access nontraditional streams of funding in fiscally conservative times, advocates have turned to use the Pay for Success (PFS) mechanism. In Salt Lake County, Utah, Pre-K advocates from different backgrounds decided to use PFS, also known as a Social Impact Bond (SIB), to expand a high quality Pre-K program in the County. In North Carolina, PFS was considered by government officials in early exploratory stages but was not developed further. This study discusses the challenges in development, launch, sustainability, and legacy of PFS by investigating Salt Lake’s Pre-K PFS project and North Carolina’s progress in PFS. In- depth key informant interviews were conducted with 18 stakeholders and scholars. The interviewees from Salt Lake and NC discuss the necessary conditions for PFS, the proper safeguards to take in cases of Pre-K as well as non Pre-K PFS, and the larger conversation around evidence-based policymaking. Overall, the findings from this study suggest that PFS should be considered a means to an end—an incomplete solution in what needs to be a larger context of cross-sector partnerships and long-term sustainable solutions.