Biggest Week Yet for Pay for Success in the United States

HKS Government Performance Lab celebrates announcements in Denver, South Carolina, and Connecticut

February 17, 2016

Three Pay for Success (PFS) projects receiving technical assistance from the Harvard Kennedy School Government Performance Lab (GPL) reached important milestones this week. Denver, South Carolina and Connecticut each made announcements that their Pay for Success projects are about to begin delivering critical services to vulnerable populations.

“Governors and mayors around the country are looking for ways to expand good programs despite limited fiscal resources. The Pay for Success approach has the potential to generate scalable solutions to some of our nation's most pressing social problems,” said Jeffrey Liebman, Malcolm Wiener Professor of Public Policy at Harvard Kennedy School and Government Performance Lab director. “With these new projects, Denver, South Carolina, and Connecticut are leading the way in trying to provide more effective services to their citizens and make better use of taxpayer dollars.”

This week marks the biggest week yet for PFS projects in the U.S. These three announcements bring the total number of U.S. PFS projects to eleven, seven of which have relied upon GPL technical assistance. Across the country, the Government Performance Lab is providing pro bono technical assistance to more than twenty governments in developing PFS projects.


Through their PFS contract, the City of Denver and Mayor Michael Hancock aim to connect more than 250 homeless individuals with quality supportive housing and intensive case management over a five-year period. Denver will make future success payments if service providers meet key outcomes in housing stability and jail day reductions among the individuals served.

Approximately 210 new units of housing are in development across the city to meet the needs of homeless residents through the project. The PFS initiative braids funding from multiple sources to develop the housing including: Low-Income Housing Tax Credits, vouchers from the Denver Housing Authority, allocations from the Colorado Housing Investment Fund, federal HOME funds, and Denver Office of Economic Development Funds. 

South Carolina 

Governor Nikki Haley announced South Carolina’s first Pay for Success contract, which expands Nurse-Family Partnership home visiting services to 3,200 low-income, first time mothers and their babies this week. Over four years, Medicaid-eligible moms will receive regular home visits from specialized nurses during their pregnancy and until their child’s second birthday. South Carolina, which has one of the highest rates of pre-term births in the nation, expects that the expansion of NFP services will lead to healthier starts for babies and their families.  

Led by the South Carolina Department of Health and Human Services, the project also incorporates Medicaid dollars to cover a portion of the services through a 1915(b) waiver from the Centers for Medicare and Medicaid. A total of $7.5 million has been set aside by South Carolina for success payments in the project should NFP reach targets for reducing pre-term births, reducing child hospitalizations due to injury, increasing healthy birth spacing, and serving mothers in low-income zip codes.


The Connecticut Department of Children and Families (DCF) announced the execution of a Pay for Success Contract designed to promote family stability and reduce parental substance use for families involved with Connecticut’s child welfare system. The PFS contract is part of DCF’s efforts to combat the widespread effects of the opioid epidemic on CT families by providing services focused on recovery and family stability. Substance use indicators were present in more than 18,000 cases DCF investigated in 2013, and serious substance use has long-term consequences for the families involved.

Under the PFS contract, DCF will provide Family-Based Recovery Services (FBR) to approximately 500 families in Connecticut over five years. FBR pairs caregivers with substance use problems with treatment teams that combine in-home visitation and coaching that focuses on parenting support and substance use treatment. FBR will expand its model to include treatment for families with children between 3-6 years old, filling a pressing gap in DCF’s service array. 

About the Government Performance Lab

The Harvard Kennedy School Government Performance Lab conducts research on how governments can improve the results they achieve for their citizens. An important part of our research model involves providing pro bono technical assistance to state and local governments. Through this hands-on involvement, we gain insights into the barriers that governments face and the solutions that can overcome these barriers. By engaging current students and recent graduates in this effort, we are able to provide experiential learning as well.

The Government Performance Lab began as the HKS Social Impact Bond Technical Assistance Lab (SIB Lab).  Established in 2011, the SIB Lab helped Massachusetts and New York State become the first two states to launch Pay for Success projects.  In 2013, eight additional governments won a national competition for SIB Lab assistance: Chicago, Colorado, Connecticut, Denver, Illinois, Michigan, Ohio, and South Carolina.

Today the Government Performance Lab is assisting more than two dozen state and local governments around the country across three types of technical assistance:

    • Pay for Success (PFS)/Social Impact Bond (SIB) projects: Through our SIB Lab, we support state and local governments in developing PFS contracts.
    • Performance Improvement projects: We provide technical assistance to governments that seek to improve the results they achieve with their core spending.
    • Results-Driven Contracting projects: As part of Bloomberg Philanthropies’ What Works Cities initiative, we are helping 20 cities improve their key procurements over the next three years.

The Government Performance Lab has received funding from the Rockefeller Foundation, the Laura and John Arnold Foundation, Bloomberg Philanthropies, the Pritzker Children’s Initiative, the Dunham Fund, the Social Innovation Fund.

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Jeffrey Liebman

Jeffrey Liebman, Malcolm Wiener Professor of Public Policy and Government Performance Lab director

"Pay for Success is essentially about ensuring value for taxpayers—not only because government just pays for programs that work, but also because these projects encourage investments in prevention. Too often governments fail to invest early and upstream, even when we know that an ounce of prevention is worth a pound of cure. Vaccines are cheaper than treating disease; job training costs less than incarceration. And these are only the quantifiable benefits to communities—they do not capture the profound and intangible value of a life better lived.

Some have argued that Pay for Success is unnecessary—that these types of programs should be funded through regular government appropriations. But this view ignores the realities of policymaking. First, governments at all levels are cash-strapped. And even when there is available funding, they struggle to defend investments in preventative programs, which are not quick wins. Governments also often lack the capacity to measure outcomes and hold non-profits accountable for results. Finally, shifting policy priorities often mean programs can be funded one year, but not the next, making it hard for even the best nonprofits to plan for the future."

--Tracy Palandjian and David Gergen, in the TIME magazine piece "A New Public Finance Tool to Help the Most Vulnerable"

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