In America, Republican Governor Nikki Haley of South Carolina and Democratic Governor Dan Malloy of Connecticut, independently and simultaneously embraced one of America’s newest and most bipartisan initiatives for social change, Pay for Success.

‘Pay for success’ projects (often referred to as ‘social impact bonds’) are a funding mechanism where instead of government paying directly for the provisions of a social service, private investors provide capital to a service provider to achieve agreed upon social outcomes. If these outcomes are achieved, there is a cost savings to government, which is used to repay the upfront investment along with a financial return.

Two ‘pay for success’ projects were announced – a project aimed at improving health outcomes for mothers and children living in poverty in South Carolina, and another aimed at better serving the hundreds of families struggling with the effects of substance abuse in Connecticut.

Christian L. Soura, the director of the South Carolina Department of Health and Human Services (the state agency spearheading the South Carolina initiative), said:

“The Pay for Success model changes the way government does business, by promoting evidence-based policy and making payments contingent upon actual measured outcomes”.

Governor Malloy also said of the Connecticut project,

“We in Connecticut are continuing to innovate, with new funding mechanisms to tackle complex issues. The world is changing, and the way we approach funding critical services must change with it. It’s critical that we focus on outcomes – and Pay for Success financing assures that we only fund programs that work.”

For the press release on the South Carolina Nurse-Family Partnership Pay for Success project, please click here.

For the press release on the Connecticut substance abuse pay for success project, please click here.