ContractPay-for-Success (Pfs) Project Agreement • July 15th, 2022
Pay-for-Success (PFS) projects, commonly known as “social impact bonds” (SIBs), have received significant attention in the U.S. and around the globe as a way to attract more funding to solve societal problems. A PFS project is a contract between investors, governments, and service providers in which investors commit to financing a government program with the hope of receiving investment returns based on the achievement of societal outcomes such as reduced rates of recidivism or improved health outcomes. Under the most common PFS model, a government contracts with a private sector provider and commits to repaying an investor (or investors) according to specific outcome targets monitored by an independent evaluator.[1] By giving private investors the opportunity to profit from high- performing government programs, PFS monetizes the social value of policy initiatives, generating positive returns for investors as well as positive societal outcomes.[2]
