Pay For Success

Voices from PFS Pioneers: “Hello Family” PFS Project in City of Spartanburg, SC


Crossposted from NFF’s Pay for Success website. Original post available here.
Published Tuesday, April 18, 2017 | by Katherine Klem, Bryan Boroughs

Nonprofit Finance Fund spoke with Institute for Child Success and the City of Spartanburg, South Carolina about the “Hello Family” Pay for Success Project. This blog is part of an interview series with selected project partners from our Social Innovation Fund transaction structuring competition.

Tell us about the genesis of this PFS project. What was the impetus? How were the stakeholders who have been moving the project forward brought together originally?

Actually, this project started off in a different direction to the one we are pursuing now. Initially, the Institute for Child Success (ICS) partnered with the City of Spartanburg, with support from the federal Social Innovation Fund (SIF) and the Mary Black Foundation, to explore how Pay for Success (PFS) could improve young children’s lives by expanding pre-K and paying for better outcomes.  Part of the motivation was the City’s savvy thinking that to attract more families to Spartanburg, and thus develop its local economy, it needed to offer things families cared about.  Unlike some other governments drawn to PFS, the City was less motivated by the prospect of saving money by expanding preventive programs that had a high return on investment.  Instead, it was drawn to PFS for its focus on outcomes instead of services and, as a consequence of doing better by kids, its ability to potentially attract more families to the community.

However, we learned through our work that the City wasn’t in deep need of a giant pre-K expansion.  Rather, the real opportunity to measurably improve the wellbeing of the young kids in the community – and to attract new families to Spartanburg – lay in the younger years.

We’re proud of this outcome and our change in direction. We took an honest look at the data, and, when PFS didn’t make sense in one context, we discovered another context where it did.  Following the data is always the right move.

Together, we determined that the 650 children born in Spartanburg each year could deeply benefit from a continuum of services – that is, a program of multiple interventions that are coordinated to serve a child’s needs more holistically than perhaps a single intervention could – that have a track record at improving the well-being of children and families.  And we concluded that PFS financing was a viable vehicle to provide this continuum.

ICS was especially interested in how several factors – the inclusive nature of the project, where all children would be beneficiaries; the continuum model; and the rural context – could create a first-of-its-kind PFS project and, by its example, benefit other jurisdictions in the years to come.  Those potential impacts stand, of course, in addition to our intention to improve outcomes for Spartanburg’s children.  Seeing this promise and the commitment of our tremendous partners in the community, we applied for the SIF-funded transaction structuring opportunity through NFF to ensure that this project has the resources it needs to succeed.

An innovative element of this project is the potential to offer a continuum of services to all children who are born in the City of Spartanburg.  Please describe how this continuum will work and what it will mean for young children and their families in the community.

The continuum will focus on allowing children to thrive, creating an even more family-friendly community – hence our initiative’s name, “Hello Family.”

The continuum is comprised primarily of three interventions that have evidence of producing outcomes appropriate for PFS financing: BirthMatters, Family Connects, and Triple P.  It’s hard to do these programs justice in a few words.  Through BirthMatters, community-based doulas educate and support low-income moms under age 24 from 24 weeks of pregnancy until each baby is six months old through home visits and other supports.  Family Connects offers a more universal approach to home visitation.  Nurses visit moms and newborns in their homes regardless of income and assess families for potential risks and connect them with community resources.  Triple P (Positive Parenting Program) offers community-level communications campaigns, along with individual sessions with families, to equip parents with the skills and confidence they need to be self-sufficient in helping their children realize their potential.

While these three interventions reliably enhance the lives of families, we needed to determine which improvements would trigger payments.  Although nothing is final yet, our study identified three outcomes that could be used: reduced cesarean birth rates, reduced child emergency room visits during the first six months of life, and reduced cases of substantiated abuse and neglect.  That’s the working plan at this stage for the kind of impact we seek to create for families, and what we hope this continuum will mean for them.

By linking the three programs and focusing on achieving outcomes like these, this continuum will support families prenatally, during the first few months of a child’s life, and throughout early childhood.  We believe it is poised to provide a more seamless introduction to the world for these young children lifting them forward into school and life with a strong start.

As you know, the road to launching a PFS project is a long one! Can you share with us what the biggest challenge to date is/has been? How are/have you and your partners approaching/approached this challenge?

As PFS matures as a field, new projects are now able – to some degree – to borrow structuring ideas and frameworks from prior deals.  However, this project is exploring relatively novel territory on two fronts: 1) how to structure a project that looks to expand several distinct intervention models at once, and 2) how to rigorously evaluate those services’ impacts while delivering them to every young family in a community, which means an evaluation using a control group that doesn’t receive services may not be feasible.

As a result, we are working to create some of those structures and frameworks from scratch, which is a fun challenge to say the least — especially for the data wonks!  We are fortunate to have strong relationships with the partners in the project, and a small enough community such that it is also relatively straightforward to access administrative data systems.  This helps explain why we are confident that we’ll be able to facilitate whatever evaluation schema provides the best fit, and we’re looking forward to really digging into that work in the coming months.