The potential of outcomes and equity
Who doesn’t love a good outcome! Healthy people, great local food to eat, a neighborhood that’s thriving, and living wages jobs. That was the promise of a family of funding approaches that emerged in the last decade, and continues rapid growth -- Outcomes-based funding. Instead of tying funding and investment to a particular process, output, or action, what if we gave organizations the freedom to A) innovate and deliver outcomes, and B) pay directly for those outcomes once they were achieved?
The promise of outcomes-based funding emerged from decreasing government budgets coming out of the 2008 financial crisis, better tools to measure outcomes, and an interest from investors in paying for what works. There are now billions flowing through Pay for Success, Social Impact Bonds, performance-based contracting in healthcare and government, and other mechanisms where payments are delivered based on agreed-upon outcomes.
The problem is that the lion’s share of this $ is going toward easily measurable interventions, and large organizations and intermediaries. Outcomes-based funding, for the most part, is not going toward community-led efforts and smaller organizations who are going after changes in the systems (e.g., food, housing, transit, work, environment, and education) needed to advance equity -- especially health equity.
Eugene Cooke and Jonathan Peck leading a discussion on equitable futures. Photo credit: CommonHealth ACTION.
For a group of funders and community leaders that convened in San Francisco in Summer 2019, the mismatch between the promise and the practice of outcomes-based funding represented a huge, missed opportunity--one they wanted to fix. Coming out of that gathering, Shift Health Accelerator, the Federal Reserve Bank of San Francisco, JSI, and Nonprofit Finance Fund created a 2040 vision for more equitable outcomes-based funding.
We invite you to help us shape and live the following draft principles:
You can read the full principles document and provide your comments, questions and reflections on how an equitable approach could help build a Culture of Health at http://shifthealthaccelerator.org/2020/field-outcomes-funding/.
The ideas are also accessible through a two part article (part 1 and part 2) by JSI and a reflection piece written by Jessica LaBarbera from NFF on this work. You can also post your reactions to the article through this survey. We are partnering with the Federal Reserve Bank of San Francisco’s Community Development Department to collect feedback and promote cross-sector dialogue on the principles outlined in the article. Your comments will be helpful in shaping an upcoming issue of the Community Development Innovation Review.