Foundations and local, state, and federal government agencies that fund nonprofit service providers increasingly are taking an "outcomes-oriented" approach that emphasizes results as measured by predefined outcome metrics, putting more pressure on service providers to track outcomes and demonstrate impact, a report from the Urban Insitute finds. The report, Building an Outcomes Orientation for Service Providers (14 pages, PDF), outlines the steps service providers need to take to become more outcomes-oriented and better prepared to engage with performance-based funding models such as pay-for-success (PFS) projects. Among other things, service providers under contract for a PFS project need to manage potentially asymmetrical relationships with investors and intermediaries; fully understand how the evidence base supports the alignment of an intervention, target population, and outcomes so as to avoid setting unrealistic goals; and deal with increased public scrutiny that can negatively affect the organization's reputation. The report highlights the need to have in place a leadership team that thinks creatively about solutions and business practices; adequate organizational capacity, including expertise in managing cash reserves and money needed to cover short-term operating expenses; data systems for collecting information and tracking outcomes; and a willingness to work with evaluators to craft the evaluation and outcome measures.
(Image credit: GettyImages)