Third Sector Capital Partners, Inc. Launches Pay for Success Competition Focused on Youth Workforce Development

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Competition comes as The Workforce Innovation and Opportunity Act (WIOA) allows states to devote funds toward pay-for-performance programming.

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This competition will allow new jurisdictions around the country to explore the viability of PFS in the area of youth workforce development.

Third Sector Capital Partners, Inc. (Third Sector), a nonprofit advisory services firm that is leading the development of Pay for Success projects across the U.S., has launched a national competition to support government projects in the area of youth workforce development. The competition is being funded by a grant from the Social Innovation Fund (SIF), a key White House initiative and program of the Corporation for National and Community Service.

As part of the competition, Third Sector will select up to five government “Sub-Recipients” that are focused on using Pay for Success (PFS) to increase outcomes for youth (ages 14-24). Each agency will receive capacity building dollars and technical assistance services from Third Sector and partners to develop a blueprint for the construction of a viable PFS project specific to their region. For more information and a detailed timeline about the competition, visit:

The competition comes as new funding dollars for PFS are being made available to states through the Workforce Innovation and Opportunity Act (WIOA). Specifically, WIOA permanently establishes pay-for-performance (a form of PFS) as an eligible use in all three of its funding streams (Adult, Youth, and Dislocated Workers), allowing states to use 15% of their total formula funds and authorizing local workforce boards to devote up to 10% of total funds toward pay-for-performance programming.

“In just the last few years, governments, high-performing nonprofits, and private funders have tapped Pay for Success contracting to move the needle in issue areas such as education, child welfare, recidivism, and homelessness,” said CEO and Co-Founder George Overholser. “Thanks in part to the allocation of WIOA funds, and widespread interest in the Pay for Success model, this competition will allow new jurisdictions around the country to explore the viability of PFS in the area of youth workforce development.”

This SIF-funded competition seeks to promote long-term outcomes in Youth Development and Economic Opportunities. These issue areas are also consistent with the priorities of the WIOA Youth Program: career exploration and guidance, support for educational attainment, opportunities for skills training in in-demand industries and occupations, and culminating in a good job along a career pathway or enrollment in post-secondary education. There is a particular interest in higher-risk individuals, including youth who are homeless, offenders in the juvenile or adult justice system, in foster care, out of school and unemployed, or in an out-of-home placement.

For the competition, Third Sector is collaborating with leading national organizations that will assist in conducting outreach efforts, sharing lessons learned, and supporting technical assistance services. Competition resources include: Abt Associates, America Forward, National Association of Counties, and National League of Cities.

Applications should come from State Executive Offices, State Workforce Agencies, and Local Workforce Boards (highly recommended in conjunction with State Executive Offices or Workforce Agencies) who demonstrate clear interest in pay-for-performance exploration through their WIOA implementation plans or other actions, including data access agreements to key administrative databases. State Education Agencies, TANF Agencies, and service providers are also encouraged to partner with applicants. Preference will be given to state-level applications and applications across multiple jurisdictions. Applications will be available January 2016, with letters of interest due by December 31, 2015.

In 2014, Third Sector received $1.9 million from SIF to help strengthen the pipeline of state and local governments and service providers prepared to implement PFS projects. Third Sector hosted a similar competition in late 2014, from which it selected seven Sub-Recipients from across the U.S. (see announcement).

About Third Sector Capital Partners, Inc.
Third Sector leads governments, high-performing nonprofits, and private funders in building evidence-based initiatives that address society’s most persistent challenges. As experts in innovative public-private contracting and financing strategies, Third Sector is an architect and builder of the nation’s most promising Pay for Success projects including those in Commonwealth of Massachusetts, Cuyahoga County, Ohio, and Santa Clara County, California. These projects are rewriting the book on how governments contract for social services: funding programs that work to measurably improve the lives of people most in need while saving taxpayer dollars. A 501(c)(3) nonprofit based in Boston and San Francisco, Third Sector is supported through philanthropic and government sources, including a grant from the Corporation for National and Community Service’s Social Innovation Fund.

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