Third Sector coordinated a panel session on Pay for Success at the recent Do Good Data Conference hosted by the Impact Lab in Chicago. A standing-room-only crowd came to learn how we can use measured outcomes to bring effective programs to those most in need. Alongside Sarah Jalbert from Abt Associates, Sotun Krouch from Roca, and Eileen Neely of Living Cities, each providing their perspectives on Pay for Success, we were able to fully illustrate the innovative model why it is an effective way for communities to address social issues.
Pay for success (PFS) projects are about measurably improving the lives of people in need through an innovative contracting model that drives government resources toward high-performing social programs. Data fuels this process by informing procurement decisions, identifying those most in need, and evaluating services delivered to them.
A PFS contract involves a governments, service providers, funders, third party evaluators, and an intermediary advisor. Our session described how data enables each of these stakeholders to construct and evaluate a PFS project:
Governments can measure performance: PFS is an opportunity for governments to move to a data-driven decision mode. Each step of the PFS project is informed by data and the ultimate goal is a performance measure as determined by evaluation metrics. Like, any large organization, moving towards data-informed decisions is a slow and difficult shift. By balancing the risk associated with trying new programs, PFS can easily facilitate the change.
Service providers can improve services: Service providers are often resistant to change. Rooted in the good intentions of their work, change is feared as a partial admittance that what you’ve been doing isn’t working (at least as well as possible). By accepting this change, Roca demonstrated that data and values aren’t mutually inconsistent, but are rather mutually supportive. Sotun Krouch emphasized that failing to measure outcomes would be counter to Roca’s values, as it risks making false promises to the youth they serve.
Funders can scale innovation: As Eileen Neely explained, private funders are increasingly values driven. By rigorously measuring outcomes, PFS equips funders with data that shows their capital is being used in accordance with their values and enabling real social change. Most importantly, however, PFS reduces overall need for outside funding in the long term. By providing additional funds for innovative solutions, private funders can assist government’s provision of programs that go beyond prevention, and address the root causes of social issues.
Third party evaluators can tie outcomes to values: Sarah Jalbert was very persuasive in sharing how evaluations are more than data, but also reinforce organizational values. Evaluators in a PFS project go beyond simply determining the impact of a program and its ability to scale. Through a fictionalized case study, Sarah demonstrated how an experienced evaluator can not only gauge the impact of a program, but can also influence the selection of outcome measures to align outcomes more closely to values.
A belief exists in the social sector that metrics and values are inherently opposing forces. We often see this through common dichotomies like “heart vs. brain” or “compassion vs. reason”. This panel challenged this idea by demonstrating how pairing heart with mind makes both better. Metrics not connected to values are of questionable utility, while value-based programs that do not measure impact may in fact be disconnected from values. Only by connecting our compassion and reason can we address our most pressing social challenges.
"Only by connecting our compassion and reason can we address our most pressing social challenges."
Brian Beachkofski, Senior Director, works from Third Sector's Boston Office.