Paying for success: The story of how Utah became a leader in social impact investing
Thursday, February 14, 2019
By Emily Hoeven
A Utah preschool program that has helped hundreds of severely at-risk 4-year-olds avoid costly special education programs is making waves across the country.
And it didn’t cost taxpayers a penny to pilot the program.
The Utah High Quality Preschool Program, which launched in 2013, uses a new model called “pay for success” in which private investors, mission-based organizations and the government team up to address social issues, such as criminal justice, health care access, graduation rates and youth employment.
In this model, the government doesn’t pay for any social program that isn’t successful. If there isn’t a measurable impact, private investors take the financial hit — not taxpayers. If carefully measured data proves that the program was successful, only then does the government pay back investors.
Utah’s program was the second in the nation — and the first addressing early child education — to employ the pay-for-success model, which was first explored in 2011. Now, around 83 pay-for-success programs have launched nationwide amid rising excitement about the model’s potential to cut wasteful government spending while improving the quality of social services delivered.
Photo courtesy of reynermedia.
- impact investing