Tools being developed to conduct due diligence with respect to pay-for-success projects, or social impact bonds, could also help build nonprofit organizations' capacity to track and measure outcomes, a report from Social Finance suggests. The report, New Tools to Amplify Impact: A Pay-for-Success Guide to Building Nonprofit Capacity (66 pages, PDF), highlights lessons learned from a partnership between Social Finance, the W.K. Kellogg Foundation, and four of the foundation's grantees to test how new tools could help nonprofits better measure their impact and secure a more sustainable stream of public funding. Best practices for nonprofits include creating two-way partnerships with the public sector through the sharing of data analyses, volunteer networks, and professional development trainings; building out their performance-measurement systems and using real-time data to inform their work; and communicating their value proposition with clear statements of theories of change and the estimated value of their community benefit. Funders should invest in grantees that are working to build evidence of their impact and help them build their performance-measurement capacity. And public sector agencies should work to better understand the true costs and benefits of addressing key social challenges and facilitate evidence-building by sharing their data with nonprofits. Funded by the Kellogg Foundation, the report also offers a how-to guide for funders and nonprofits in conducting pay-for-success assessments.