Building an Outcomes Orientation for Service Providers

Building an Outcomes Orientation for Service Providers

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. 

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