Giving Compass' Take:

• America Forward discusses the Social Innovation Fund, a federal program that tries to tackle some of our country's toughest problems, and how it transitioned to a Pay for Success model.

• The upshot here is that federal funding based on measurable outcomes is still in its early stages, but shows a lot of promise. How would it differ from other PFS models?

• Learn how PFS can be a vehicle for systems change.

Since its authorization as a federal program, the Social Innovation Fund (SIF) has been aimed at finding and growing the most promising solutions to our nation’s most pressing challenges. The original model of the SIF, known as SIF Classic, is focused on directing federal resources (matched 1:1 by non-federal and private dollars) to support community-based organizations and solutions that have evidence that they work to help grow and scale them nationwide.

Beginning in fiscal year 2014, the Corporation for National and Community Service (CNCS) was authorized to allocate up to 20 percent of the funding for the SIF to test an approach known as Pay for Success (PFS). Aligned with the established mission of the SIF, this second model known as SIF Pay for Success (SIF PFS), allocates federal funding, again with a required 1:1 match, to support feasibility studies and transaction structuring efforts. This additional focus of SIF funding on PFS supports efforts to identify and scale evidence-based solutions, as SIF Classic does, but also tests the idea of allocating government funding based on the achievement of results or outcomes.

When CNCS launched its first competition under the new PFS authority, Third Sector Capital Partners (Third Sector) was one of eight organizations to receive funding to launch a competition to identify jurisdictions and providers interested in receiving PFS support and technical assistance. Many of these initial eight grantees, including Third Sector, initially defined the success of this work as developing PFS contracts and launching projects. However, it became clear for Third Sector that the work it was doing with the nine communities and organizations it chose as part of its first SIF PFS cohort would be deemed successful for reasons beyond contract launch.

Read the full article about Social Innovation Funds and pay for success by Nicole Truhe at America Forward.