Over $65M Requested in SIPPRA Pay for Success Applications
Written by Grace Edinger, EPIC’s Procurement Policy Strategy Lead
Background
The Social Impact Partnerships to Pay for Results Act (SIPPRA) was signed into law in 2018 with the intent of improving the effectiveness of social services using outcomes-based procurement. Run by the US Treasury, the government pays for projects only when predetermined project outcomes have been met and validated by an independent evaluator. Congress appropriated $100M for the SIPPRA program to implement “Social Impact Partnership Demonstration Projects,” of which roughly $40M remains unallocated.
The first round of projects was awarded in 2021 and included projects that aim to reduce gun violence among youth in New York City, supply alternatives to incarceration for women with substance use disorders throughout Oklahoma, and provide supportive housing for the unhoused population in Denver, CO.
The US Treasury closed its second SIPPRA funding solicitation this past spring, with the expectation of spending the remainder. Earlier this week, the SIPPRA Commission held a public meeting to make recommendations on which projects to move to the next phase of consideration.
Why This Matters to the Environment
When this solicitation was open, I spread the word about SIPPRA to eligible entities about how these funds could be used for ecological restoration and other environmental outcomes. While the law was not necessarily designed for these types of projects, after discussions with SIPPRA staff and a review of the underlying law, we deemed that certain environmental projects could be an eligible and efficient use of these funds.
Pay for Success programs, the same structure that SIPPRA utilities, is spreading across the country to buy outcomes like nutrient reductions, miles of stream restored, lead service line replacement, and others. There’s a natural fit.
While some states and municipalities got close to submitting an environmental project application, to my knowledge no environmental projects were submitted for consideration. I received countless emails, organized dozens of brainstorming calls, and had the highest ever engagement on my LinkedIn posts when discussing this program. The environmental sector was excited to take this on, but it needed a little more time than what the application window allowed.
Application Stats
Received 12 applications asking for over $65M
7 of the 12 applications passed SIPPRA Commission subcommittee reviews, announced in a public meeting earlier this week (see screenshot below). They are all moving forward to another round of reviews.
The total requested amount of these 7 projects is just shy of $57M, still over $16M above what is available.
Individual project costs range from just under $4M to the project cap, $10M.
Project durations vary from ending in 2028 to the longest running through 2032.
The projects are split into two categories, each with a SIPPRA subcommittee that conducts reviews: Housing and Health. Generally speaking, “Health” projects are geared towards young children and families including outcomes like early childhood education opportunities, reducing instances of child abuse, etc. “Housing” projects are aimed at creating affordable housing
Table 1: List of SIPPRA projects moving on to further review for consideration. Slide provided during the public SIPPRA Commission meeting held on August 21, 2024.
Conclusion
I’m thrilled at the application stats listed above. These numbers signal to Congress that this program is valuable, there’s an appetite for outcomes-based projects, and that it makes economic sense. With SIPPRA’s successful round 2 and historic bipartisan support, we can lean on Congress to reappropriate the program and ask for other tweaks that would make it easier for applicants, including those proposing eligible environmental projects.