& Pay For Success
The Governor's Office of State Planning and Budgeting, with the support of the General Assembly, has added two innovative projects to its portfolio in recent years – Results First and Pay for Success. In addition to spearheading the creation of a statewide Lean process improvement initiative, creating a performance management academy, and implementing the revised SMART Act, the Office of State Planning and Budgeting is an integral part of the Governor's performance management team. With the Results First and Pay for Success initiatives, the Office of State Planning and Budgeting is analyzing and documenting best practices in the delivery of government services.
In summer 2014, Colorado’s Executive Branch and the General Assembly partnered with the Pew-MacArthur Results First Initiative to implement Results First in Colorado. Colorado's Results First team has reviewed programs in the adult criminal justice, juvenile justice, child welfare and behavioral health policy areas. Colorado Results First's reports can be found here.
The Pew-MacArthur Results First Initiative, a project of the Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation, works with Colorado and other jurisdictions to implement an innovative benefit-cost analysis approach to state policy decision making. By offering cutting-edge tools and hands-on technical assistance, Results First helps public leaders identify and invest in policies and programs that produce the best outcomes for constituents.
At the core of the Results First approach is a benefit-cost analysis model. Based on a model first developed by the Washington State Institute for Public Policy, it incorporates national research on program effectiveness and allows that national data to be analyzed in conjunction with Colorado-specific data.
The model helps our state:
- Systematically identify the success of state programs with a return on investment focus;
- Analyze evidence-based programs based on their projected benefits, costs, and investment risks;
- Provide advice for policymakers on programs that could be targeted for additional funding or potential cuts based on effectiveness; and
- Predict the impact of different policy options.
To implement the project, the Colorado Results First team is working in collaboration with the General Assembly’s Joint Budget Committee, the Judicial Branch, and state departments.
Additionally, Colorado's team is focusing on promoting other supports that are necessary to implement evidence-based policymaking and achieve results, such as implementation support and rigorous evaluations of programs. Results First is working both internally with government partners and externally with non-profits and other stakeholders to determine how to better integrate these supports into state decision-making processes. These steps are essential as programs must be implemented and evaluated properly to achieve their intended outcomes.
In 2015, the Colorado General Assembly enacted HB 15-1317 encouraging the Office of State Planning and Budgeting to pursue Pay for Success contracts.
Under a Pay for Success contract, a state or local government pays for a service based on outcomes and impact, measured rigorously by an independent evaluator. Pay for Success contracts may also be paid for by nonprofit, private sector, or individual funders, with foundations and/or impact investors providing up-front project financing to the project's service provider(s). The government commits to repay these funders if the intervention achieves key outcomes (for instance, a reduction in recidivism, or improvements in school performance) for the individuals served by the project.
A number of innovators across the country have experimented with the Pay for Success model in recent years as part of a broader strategy to move toward evidence-based and data-driven policymaking. The city and county of Denver recently launched a Pay for Success project last year to finance services for persistently homeless individuals.
The Office of State Planning and Budgeting is currently conducting a feasibility study exploring the viability of a state-sponsored Pay for Success project to improve outcomes for Colorado's underserved youth.
In January 2017, as part of this feasibility study, the Office of State Planning and Budgeting released a Call for Innovation soliciting ideas and improved approaches for young people and their families from nonprofits, service providers, Colorado local governments and other stakeholders. Submissions from interested respondents are due on March 21, 2017. The Office of State Planning and Budgeting hopes that the Call for Innovation will result in promising interventions and approaches that can be advanced either through Pay for Success, the state's traditional budget process, or both.
You can learn more about the Call for Innovation and the Pay for Success feasibility study on the Pay for Success section of our website. We hope you will consider submitting a Call for Innovation proposal and engaging in this exciting process.