The Nonprofit Finance Fund, which has been doing the country an incredible service by conducting rigorous research and sharing information on the emerging Pay For Success (PFS) models in the United States, released its latest report yesterday. NFF describes each of these financing models as “accelerating the transition of the United States social sector from on output-driven funding model to an outcomes-driven funding model” and acknowledges that, as with any new model for anything, there are competing risk trade-offs for the various stakeholders.
I’m from Minnesota and we’ve never followed the beaten path in the innovation department. Did you know that we invented masking tape, the stapler, and water skis? Started the first children’s department of a U.S. public library? Even coined the phrase, “Holy cow!”?
So as groups and governments around the world cultivate a new social impact bond financing mechanism, it should come as little surprise that my state went down a different path to develop a concept with the same goals in mind, but a substantially different structure and strategy.