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February 16, 2016

2 More States in 'Pay for Success' Deals for Social Programs

The governors of Connecticut and South Carolina announced plans Tuesday to try out the burgeoning "pay for success" model in which philanthropy and businesses finance promising new social-service efforts, reports The Washington Post.

Under the model, also known as social-impact bonds, governments face no financial liability unless the new programs are shown to work by hitting agreed performance benchmarks. The deals, both brokered by Boston-based nonprofit Social Finance, involve a four-year, $12 million effort in Connecticut to keep children in problem homes out of foster care and a four-year, $30 million South Carolina program to improve maternal and child health.