PFS is designed to work for communities interested in targeting a social issue by committing to implement an evidence-based program.
Before deciding to pursue a PFS project, communities should consider several factors, including the following:
- Engagement and enthusiasm from government and political leaders. Since PFS projects can be complicated to construct and implement (including coordination among various government bodies), they must have key government champions (e.g., office of the executive of the jurisdiction, head of implementing agency, budget officials). Since the time horizons for PFS transactions can exceed political terms of office, all parties need to be confident about repayment (e.g., institutional mechanisms, clean record of not defaulting on obligations of past administrations).
- Legal framework. Many jurisdictions lack the ability to engage in PFS projects. Although the required legislative fix is relatively simple, it may pose a hurdle.
- Strength of service provider. The service provider’s demonstrated ability to successfully implement the social program is critical for attracting funding interest.
- Performance and outcome tracking. Jurisdictional systems should be able to estimate the costs of current services as well as the costs and potential benefits of implementing the PFS project. Systems should also be able to track outcomes in the target population.
- Local context. A program considered for PFS may be backed by strong evidence, but it may not be successful in all contexts. Jurisdictions should consider their unique cultural, societal, and geographic factors that might affect the program’s effectiveness.