Pay for Success: A Roadmap for Implementation in Minnesota


Master's thesis


Aditi Kadam, Jared Swanson, Kyle Kretschmann, Min Lee, Nishank Varshney
University of Minnesota Digital Conservancy, University of Minnesota, 2018 May 9

DOI: https://hdl.handle.net/11299/206731

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APA   Click to copy
Kadam, A., Swanson, J., Kretschmann, K., Lee, M., & Varshney, N. (2018, May 9). Pay for Success: A Roadmap for Implementation in Minnesota (Master's thesis). University of Minnesota Digital Conservancy. https://doi.org/https://hdl.handle.net/11299/206731


Chicago/Turabian   Click to copy
Kadam, Aditi, Jared Swanson, Kyle Kretschmann, Min Lee, and Nishank Varshney. “Pay for Success: A Roadmap for Implementation in Minnesota.” Master's thesis, University of Minnesota Digital Conservancy, 2018.


MLA   Click to copy
Kadam, Aditi, et al. Pay for Success: A Roadmap for Implementation in Minnesota. University of Minnesota Digital Conservancy, 9 May 2018, doi:https://hdl.handle.net/11299/206731.


BibTeX   Click to copy

@mastersthesis{aditi2018a,
  title = {Pay for Success: A Roadmap for Implementation in Minnesota},
  year = {2018},
  month = may,
  day = {9},
  publisher = {University of Minnesota Digital Conservancy},
  school = {University of Minnesota},
  doi = {https://hdl.handle.net/11299/206731},
  author = {Kadam, Aditi and Swanson, Jared and Kretschmann, Kyle and Lee, Min and Varshney, Nishank},
  month_numeric = {5}
}

Summary
Pay for Success (PFS) is a promising financing model that encourages investment in programs that produce improved social outcomes resulting in future cost-savings for the government. In a PFS project, investors provide initial capital to scale-up effective social programs and the government pays back the investors only if the desired outcomes are achieved. Minnesota emerged as a pioneer in this field, being the first U.S. state to enact legislation authorizing a Pay for Performance pilot in 2011, even before the first PFS program was launched in New York. However, despite having the legislation in effect for more than 6 years now, no PFS project has been implemented in Minnesota. Meanwhile, over 20 PFS programs have been launched in other states such as Illinois, Ohio, Colorado, and South Carolina among others, some of which have also seen their first success payments made out to the investors. This report describes the PFS financing mechanism and provides a set of recommendations for the state government and other stakeholders to advance the implementation of PFS projects in Minnesota recognizing the roadblocks that stalled implementation of the state Pay for Performance Act. We present a set of steps through which PFS funding can be approached in Minnesota and provide a list of program areas where PFS projects can be launched. The report also highlights the legislative action that could move PFS projects ahead in the state of Minnesota and discusses some ways to move forward in the absence of legislative involvement. 

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