By Antony Bugg-Levine and Lenny Mendonca
Before you despair that you have nothing in common with that relative, friend, or coworker who disagrees with you about the presidential election, we have good news. You already agree on more than you think.
What unites us? Our interest in making government services more effective for the people who rely them and more efficient for taxpayers by orienting around the outcomes we all seek. Who wouldn’t want that?
The government currently spends hundreds of billions of dollars on social services outside health care and education. These services include job training programs, housing support, drug addiction treatment, protection for vulnerable children and the victims of domestic violence, and programs to support former prisoners stay out of prison.
Almost all of this money is allocated by activities, rather than long-term results. Payment flows to the homeless shelter based on the number of shelter beds occupied, to the early childcare center for keeping the classroom filled, to the foster care providers for the number of children they place, and to the public safety system for housing inmates. Lots of committed people work hard implementing these programs and care deeply about the long-term improvement they can make in the lives of the people they serve. But that’s not how the money flows.
Orienting programs and financing around outcomes fundamentally changes this dynamic. In an outcomes-oriented system, payment follows solutions once they have proven to work.
The homeless shelter is paid based on its contribution to helping people move permanently out of homelessness. The early childcare center is paid based on how well it helps prepare children to thrive in school. The shelter system works alongside the foster care system to reunify children safely with their mothers. And the public safety system gets more money if it provides services that enable people to stay out of prison once their terms end.
This approach has already gained widespread support across the country and across the political spectrum, including from Gov. Nikki Haley of South Carolina, Colorado’s Gov. John Hickenlooper, former Massachusetts Gov. Deval Patrick, the council of Cuyahoga County, Ohio, and the county officials overseeing the public safety system in San Bernardino, California. And they’re putting this idea into practice:
- In South Carolina, the state government has committed $7.5 million toward a $30 million project that will expand a program that sends nurses to help low-income mothers successfully raise their babies. In other pilots this program has proven to improve the life chances for babies and mothers. This investment will expand it to an extra 2,000 mothers.
- In Denver, a $8.7 million program is providing comprehensive services to 250 people who are chronically homeless. By providing mental health care, job training and supportive housing, the program has the potential to generate substantial long-term government savings in avoided court and emergency room costs for people who are often cared for only when they are in crisis.
- In Cuyahoga County (home to Cleveland and its suburbs), a $4 million pilot program is coordinating emergency shelter and supportive housing systems to speed up reunifications of mothers in emergency shelters with their children sent to foster care. By helping 135 families raise their children successfully, the program can substantially reduce the amount the county currently spends on foster care.
- And in San Bernardino, county public safety leaders are using data-driven strategies to better manage facilities, inmates, and services. The outcome-oriented approach is designed to increase the potential for inmates to leave jail better prepared to hold a job, re-connect with family, and avoid the behaviors that lead to arrest. San Bernardino is also working to strengthen the relationship with nonprofit service providers to improve the support for individuals as they transition from custody back to their communities.
Why does this outcomes orientation have such potential widespread appeal? Because it represents something we all can love: government spending on programs that work to address persistent social challenges and to avoid more expensive, inefficient, emergency treatment. And programs organized to unlock innovation and improvement, rather than compliance with pre-set rules. In these divided times, we cannot think of other concepts that have received ringing endorsements from across such a wide range of our political spectrum and that have such potential to build further common ground.
Whatever happens on November 8, no one person or party will be able to get much done alone. And we’re all going to have to work and live together. So when we see our colleagues on Nov. 9 and sit down with relatives at Thanksgiving, let’s skip the awkward silences and instead get excited about working together for better outcomes.
Antony Bugg-Levine is CEO of Nonprofit Finance Fund, a nonprofit investor and advisor that helps organizations and investors like those described here unlock their potential for sustained community impact. NFF has invested in the projects in Denver and Cuyahoga County described here.
Lenny Mendonca is a director emeritus (retired senior partner) from the Washington D.C. and San Francisco offices of McKinsey & Company. He is a senior fellow at the Presidio Institute and a member of the board at New America and California Forward.