Mar. 12, 2015

Innovative funding model slated to begin in Pennsylvania

HARRISBURG – Following months of input from pre-K providers, private sector investors, education advocates and Harvard University, Rep. Todd Stephens (R-Montgomery) is proud to announce Harvard University has selected Pennsylvania as a site to develop a “Pay for Success” (PFS) initiative. Specifically, the Harvard Kennedy School will now dispatch a Government Innovation Fellow to Pennsylvania to work full time to develop this program.
This announcement comes after Stephens spent nearly a year working to bring both a Harvard fellow and a PFS model to the Commonwealth.
“Pay for Success models provide an innovative funding mechanism for states facing tight budgets,” Stephens said. “Today’s announcement by Harvard’s Kennedy School shows how Pennsylvania is leading the way in finding creative solutions to our funding needs while ensuring outcome-based results.”
PFS programs connect private funders, public providers and government officials to redesign and reapportion the way human services are delivered. Under the PFS model, funders pay for programs usually delivered by the public sector in exchange for a portion of any savings the government realizes in the future. The entire model is based upon outcome-driven results.
For example, in Salt Lake City and Chicago, Pay for Success programs were implemented to allow Goldman Sachs to invest capital into high-quality early learning programs in exchange for some of the savings the government would ultimately realize in K-12 education costs in the future. Stephens has continued to advocate for PFS to expand access to high quality pre-K in Pennsylvania for those who need it most.
The Harvard Kennedy School’s Social Impact Bond Technical Assistance Lab chose Pennsylvania to discharge its “Government Innovation Fellows” from over 30 applicants. As a leader in designing the technical aspects of PFS’s, and with the overall background knowledge related to brokering deals with philanthropists, government officials and funders, Harvard’s Government Innovation Fellows are the leading experts in the development of PFS programs.
Stephens has proposed legislation to bring Pay for Success to Pennsylvania in two consecutive legislative sessions, with continued expectations for Harvard to send a fellow to Pennsylvania to help develop the program. Stephens applied for the fellow in December and engaged with the Wolf Administration as soon as key personnel were in place. Stephens will continue to work closely with the Harvard partners and the Governor’s Office in moving forward to bring this initiative to fruition.
“I am pleased to bring Pay for Success to Pennsylvania and that the Wolf Administration agrees with my initiative,” Stephens said. “As we make advances in this process, I look forward to continuing to advocate for a Pay for Success financing model for pre-K programs, ensuring that all students have access to early learning opportunities setting them on a path to success while reducing future government costs.”
Representative Todd Stephens
151st District
Pennsylvania House of Representatives

Media Contact: Brianda Freistat