NYS Division of Budget Releases Social Impact Bond RFP

On July 31, the New York State Division of the Budget released a request for proposals from organizations that seek to partner with New York State on Pay for Success (PFS) contracts - also known as social impact bonds. The state expects to award one or two PFS contracts immediately and may pursue additional contracts depending on the quality of proposed PFS projects, legislative authority and the availability of funding. Proposals must be in one of three public policy domains: child welfare, early childhood, health care and public safety. In the health care domain, preferred projects include asthma management and diabetes prevention.

In a PFS contract, intermediary organizations and service providers partner to raise operating funds from third party funders to expand existing programs or implement new, evidence-based programs. The government will repay the third party funders, including a return on their investment, if specified outcome targets are achieved and public sector savings are achieved through the intervention. If the project fails to achieve the specified outcomes, the government does not pay the investors. According to the RFP, "PFS allows government to leverage outside funds to invest in evidence-based preventive programs that can lead to future budgetary savings. In addition, by conditioning payment on performance rather than on services delivered, PFS promises to better align incentives to improve social outcomes for the State’s most vulnerable populations. For providers, PFS contracts provide secure long-term funding that alleviates the challenges associated with one-year budget cycles and allows for flexibility to refine delivery models to achieve better results."

Under the RFP, proposed PFS Projects should be at least $5 million and not more than $30 million. A bidders' conference will be held on Fri., Aug.16, and those seeking to attend the conference must submit a request by Wed., Aug. 7. The deadline for notices of intent to bid is Mon., Sept. 9, and the deadline for proposals is Mon., Sept. 30.  

For more information, click here.  

Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383, ext. 124