The legacy charity sector may find it difficult to appreciate but as this article notes there is no way out, the pay for success model is the only feasible way to keep the third sector relevant. Interesting reading:

Nonprofits Enter New Era of “Pay for Success”
Huffington Post

As demand for vital social services for vulnerable communities increases, and funding for these services decreases, we must find more cost-effective ways to address critical needs. Even more important is the need to deliver these services through programs that provide more and better results for each dollar invested in them. By results, I mean meaningful and measurable positive outcomes for the individuals, families and communities of need that these programs are designed to serve.

In the U.S., Social Impact Bonds and, more broadly, other “Pay for Success” financing mechanisms are taking root. Pay for Success is gaining recognition as a potentially effective, replicable and scalable approach for attracting capital to finance social programs that deliver verifiable evidence of promised positive outcomes for the populations they serve and do so at reduced costs through an emphasis on prevention and early intervention.

Until recently, most of the focus on Pay for Success in the U.S. has been on adapting the financing mechanism of the Social Impact Bond as it was first launched in the UK, to fit the contractual, regulatory, legislative, budgetary, political and cultural requirements of the U.S. The results of this financial engineering have been both impressive and well-documented, and include Pay for Success pilots in California, Massachusetts, Minnesota, New York and Utah.