Jackie Gingrich Cushman

Pay for Success, according to the Third Sector Capital Partners website, is "a general term for performance-based contracting between government and social service providers. Under these programs, impact is measured rigorously and government makes 'success payments' only when results are achieved, as opposed to providing payments up front."

Social Innovation Financing "bridges the timing gap between government payments and upfront capital needed for service providers to run PFS programs. Financing capital can be raised from philanthropic or non-philanthropic sources."

New financing models fund service providers upfront and allow government payments to be made at a later date. The key to making this work is independent third party validation.

Current federal, state and local spending on education is $0.9 trillion, according to the usgovernmentspending.com website. Combined government spending on healthcare is $1.2 trillion, welfare is $0.6 trillion. In total, our governments spend $6.4 trillion every year. Given that we have 314 million people in the United States, this equates to more than $20,000 of government spending for each person.

The transition from focusing on money being put into programs to focusing on successful outcomes will not be easy and will require business and philanthropic leaders to work with government leaders to make the transition.

Imagine a future where our government not only spends trillions of dollars, as it does today, but does so based on successful outcomes. A future where it would be possible to both spend less and have successful outcomes. That's a future worth working toward.


Jackie Gingrich Cushman

Jackie Gingrich Cushman is a speaker, syndicated columnist, socialpreneur, and author of "The Essential American: 25 Documents and Speeches Every American Should Own," and co-author of “The 5 Principles for a Successful Life: From Our Family to Yours”.