The Laura and John Arnold Foundation has announced an $8.4 million grant to the Urban Institute in support of its efforts to help governments tackle high-priority social problems using pay-for-success financing.

Under the PFS model, the government identifies a problem and specific target outcomes that will improve citizens' lives while saving taxpayer dollars. Private investors cover the up-front costs of a program designed to meet those outcomes, leaving government to repay investors if an independent third party concludes that the program has achieved its predetermined goals. UI's Pay for Success Initiative will include technical resources that help governments determine whether a PFS project is the most effective and cost-efficient way to address a particular issue. In addition, the Urban Institute will create a PFS help desk and conduct online and in-person training sessions focused on executing projects and translating rigorous evidence into effective practices.

According to the foundation, there are roughly thirty PFS projects in various stages of development in the United States, while PFS investments could total $1 billion over the next three years. The projected growth is due in large part to broad, bipartisan support for the model, with Democrats and Republicans both embracing PFS as a way to improve public services and ensure that taxpayer dollars are spent on programs that produce results.

"The goal of the Urban Institute's Pay for Success Initiative is to ensure that as PFS expands, the projects are rooted in evidence, and [are] measured with integrity," said Urban Institute president Sarah Rosen Wartell. "This new grant from LJAF will allow us to build the platform and provide the resources to guide, design, and assess initiatives all across the country."