Most PFS deals begin at the state or local level.
- First, a government engages in strategic planning. Through a comprehensive analysis, it identifies inefficiencies in social service programs that lead to disadvantage.
- Second, a government identifies the potential barriers to greater efficiency in reducing disadvantage and determines if those problems have evidence-based solutions.
- Third, the government compares the evidence-based intervention against PFS suitability criteria.
- Fourth, once an intervention is selected, the government contracts with an intermediary to raise up-front funding that becomes the multiyear financing for the program. As part of this process, the government and funders agree on outcomes.
- Fifth, an evaluator monitors the progress of the intervention, and an independent validator determines whether the program meets its agreed outcomes, affecting if and how much the government should repay funders.