Community Development Innovation Review
April 2013
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Past issues
Pay for Success: Understanding the Risk Trade-offs
Pay for Success (PFS) financing is a relatively new concept in the United States, with great potential for improving the social sector and government efficiency. As with anything new and disruptive, there are numerous unknowns for the pioneers forging the early path. Early excitement about the first social impact bond in the United Kingdom (Peterborough prison pilot) was quickly followed by the question, How will this work in the United States, and what are the risks? When new financial markets emerge, it is common to see wide variation in the proposed mechanisms for addressing risk, reflecting the different perspectives and risk tolerances of the participants involved. Only by understanding, quantifying, and managing this risk will investors become comfortable enough to invest in PFS financing structures.
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Other articles in this issue
Community Reinvestment Act (CRA) Banks as Pioneer Investors in Pay for Success Financing
The Real Revolution of Pay for Success: Ending 40 Years of Stagnant Results for Communities
Pay for Success is Not a Panacea
The Promise of Pay for Success
Social Impact Bonds: Lessons Learned So Far
Learning from the Low Income Housing Tax Credit: Building a New Social Investment Model
Using Social Impact Bonds to Spur Innovation, Knowledge Building, and Accountability
Social Impact Bonds: Using Impact Investment to Expand Effective Social Programs
Innovation Needs Foundation Support: The Case of Social Impact Bonds
Pay for Success: Opportunities and Risks for Nonprofits
Success Begins with a Feasibility Study
Government’s Role in Pay for Success
Rikers Island: The First Social Impact Bond in the United States
Human Capital Performance Bonds
Pay for Success: Building On 25 Years of Experience with the Low Income Housing Tax Credit
Can Pay for Success Reduce Asthma Emergencies and Reset a Broken Health Care System?
Supporting At-Risk Youth: A Provider’s Perspective on Pay for Success
Bringing Success to Scale: Pay for Success and Housing Homeless Individuals in Massachusetts
Making Performance-Based Contracting Work for Kids and Families