A National Imperative: Joining Forces to Strengthen Human Services in America (Jan 2018)

difficult choice to prioritize investment in data and analytical capacities over investment in direct program capacity, which will be particularly challenging given the financial realities many CBOs face. Government agencies and private funders must also commit to continuing the shift to more outcome-based procurement and contracting, prioritizing allocation of funding based on the CBO capacities needed to reach, measure, and report on outcomes rather than on outputs or services delivered, and modernizing related policies to reflect this focus on outcomes. There are two important qualifiers to this commitment. First, funders must recognize that new and innovative programs that lack an evidentiary track recordmay become the proven programs of tomorrow. Funders must continue to recognize and fund innovation and the development of tomorrow’s evidence-informed programs. Second, funders must also recognize that over time, the best outcomes result from healthy, agile human services CBOs. The commitment to outcomes must be balanced with the need for payment terms that allow CBOs to meet their cash flow needs and make investments in the capacities required to reach optimum outcomes. There are multiple ways in which procurement processes might be structured to achieve this balance. For programs whose outcomes are still uncertain, payments might be separated into upfront and deferred outcome-based components. Programs with a previously proven ability to produce positive outcomes, meanwhile, might be designated as qualified for non‑deferred payments. Where outcomes are particularly uncertain or significant working capital is needed upfront, philanthropic and commercial investors can step in to fund programs at the start, with the government providing reimbursement once positive outcomes are demonstrated. Such funding arrangements, in the form of Social Impact Bonds or “Pay For Success” initiatives, are currently being developed and tested throughout the nation, at both state and local levels. 27 Government agencies and funders also need to commit to funding this ongoing transition to a more outcomes-oriented world. For both CBOs and government agencies themselves, the transition will involve more than just a change in mindset – it will require hard work and investment. How will desirable outcomes be defined? How will they be measured? How will the requisite data be collected, stored, maintained, and manipulated? All of this will require hard dollar investment in the ongoing capacities required. There is also an important opportunity for industry associations to explore the creation and promulgation of standardized evidence measurement approaches, and to support CBOs with the associated challenges of data collection and analysis. There is still relatively little consensus about what constitutes success in the delivery of human services – different CBOs and different government agencies may rely on very different metrics, even when evaluating the performance of broadly similar types of services. This makes it difficult to compare services on an “apples to apples” basis and to optimize funding decisions. Over time, more standardized measurement approaches could facilitate comparison of CBO performance, allowing for targeted allocation of funds to the most proven and promising programs.

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