Two developments have been transforming the global social sector. First, the rise of impact investment – investors increasingly care about combining profit with purpose, and philanthropies are seeking more meaningful ways to give. Second, advances in data analytics – it is now possible to rigorously evaluate and attribute the impact of a social programme to determine if it is effective. 

Pay-For-Success (PFS) is a funding strategy that aims to address pressing and complex social challenges by incentivising data-driven collaboration. It enables governments, philanthropies, and social impact funders, to combine the use of cross-sector collaboration, data analytics, and innovation in impact investing to improve outcomes and create social impact for those in need. 

Let’s learn more about a recently launched PFS project in Singapore by AWWA, one of Singapore’s largest multi-service social service agencies, supported by Standard Chartered Singapore and Temasek Trust. 

PILOTING PFS MODEL IN SINGAPORE WITH AWWA, STANDARD CHARTERED & TEMASEK TRUST

Individuals and families in low-income circumstances often lack capacity and financial resources to plan for and invest in the future. Based on a 2019 survey of 482 participants in a debt relief scheme, 39% of low-income households in Singapore faced challenges in paying off their debts. Not needing to worry about immediate financial worries and greater stability in financial assistance would allow individuals to mentally shift from ‘survival mode’ and change their focus from short-term to long-term planning.

AWWA launched their Family Empowerment Programme (FEP), an income stability programme, with the support of Standard Chartered Singapore and Temasek Trust in July 2022. This project, using a PFS model, aims to further research the needs of low-income families receiving AWWA support services and provide longer income stability to these households, allowing them to focus on long-term education, skills-training, and employment (ESE) goals for their families. One beneficiary noted: “(The FEP) has given us more confidence in tackling our challenges. It makes me feel more assured and allows me time to plan my career to better support my son and myself, instead of worrying about how we can make ends meet.”  Standard Chartered Singapore, the Upfront Funder, has donated S$750,000 to kick off the first 18 months of the FEP. In the event of positive education and employment outcomes for families from the programme’s first 18 months, which will be validated independently via a rigorous randomized controlled trial, Temasek Trust will act as the Outcome Funder and contribute further funding to enhance and extend the FEP to positively impact more families.

“We participated in this model because of the rigour placed on outcomes. Through FEP, we hope to inspire more of such innovative and outcomes-driven models, to tackle emerging community needs, and foster new ways of public-private-people collaboration to sustain effective social innovation at scale.” – Mr. Desmond Kuek, CEO, Temasek Trust

Tri-Sector Associates, a social impact consultancy comprised of multi-disciplinary professionals, collaborated with AWWA to design an evidence-based intervention which attempts to address some of the root causes of low-income situations that its clients face, and helped to adapt the PFS funding model based on the needs of the project stakeholders. They also worked with an impact auditor to design a robust evaluation plan to track project outcomes. Post-launch, Tri-Sector also convenes a quarterly governance meeting to enable ongoing improvements and capacity building.

“Many countries across the region including Singapore are experiencing problems that are highly complex. The only way to solve such complex challenges is if the whole of society can put its minds and hands together in an effective way. Through our work, our goal is to provide systematic ways for effective collaboration. The Pay-For-Success model and blended finance are a tangible beginning, and we are excited to work with the Temasek Trust ecosystem to accelerate innovation for impact in Asia.” – Mr. Kevin Tan, Founder, Tri-Sector Associates

ABOUT TRI-SECTOR ASSOCIATES 

Tri-Sector Associates specialises in creating effective methods of cross-sector partnership tapping on the diverse strengths of the public, private and people sectors, and is devoted to finding innovative ways for society to work together to solve complex social problems. It relies on the latest data analytics and impact investing tools globally and combines them with deep local knowledge from experts across Asia. Through its efforts, it hopes to unlock a new wave of social innovation that will measurably improve the lives of those in need.

Check out Tri-Sector Associates’ website for more information on their work to scale PFS in Singapore and across the region, and follow them on LinkedIn for their latest developments.