Investing in Success: Social Return on Investment

Posted on May 14, 2013 by Adrian Bordone

In today’s funding climate, where donors and policy makers are increasingly looking to get the maximum benefit from their grants and allocated resources, it has become essential for the human services sector to develop an investment mindset that demonstrates some level of social return on investment to keep and attract new donors and stakeholders. Ultimately, we must be prepared to grapple with the assertion that every service model has, by definition, an SROI – it’s just a question of whether the return lies on the positive or negative side of the balance sheet.

Social Return on Investment (SROI) is a means by which we can translate the value of our work into dollars saved, dollars generated or costs avoided. In the world of human services, a social return on investment often appears in the form of tax payer money not spent on an individual who avoided reincarceration or ending up in a homeless shelter or emergency room for the night.  A great example of this is the nationally recognized work of the Nurse Family Partnership (NFP).  Through independent SROI analysis, NFP has demonstrated a ROI of more than $20,000 per participant after accounting for program costs, and a $5.70 return for every dollar invested in NFP, with most savings accruing to government through reduced use of public benefits.  This is but one of a growing number of high-performing agencies who are distinguishing themselves among their peers in a new and rigorous way.

SROI can also be framed as benefits accrued made available as a by-product of improved condition.  In this way a GED program might point to the enhanced earning power of a graduate which increases the tax base and/or the economic activity in the community where that graduate lives. BUILD Chicago is a gang intervention program that has been recognized as a promising practice by OJJDP, and was actually one of five required interventions for public agencies to meet eligibility for a recent OJJDP grant.  Using Census data, BUILD attributes an increase in lifetime earnings potential to youth who leave a life of violence, gangs and crime and go on to complete college of $1.1 million dollars.  BUILD effectively delivers an exit strategy from gang violence that opens the door for this economic engine to start revving.

These are compelling examples that demonstrate the financial equivalent of service delivery to external stakeholders. But, as exciting as this message can be, the true power of SROI analysis isn’t harnessed until human services use it as a performance management exercise.

In a performance management context, pursuit of SROI becomes a “callisthenic” that serves to limber and loosen our minds so that we have both the flexible problem-solving and the relentless stamina to convert data into intelligence.   This is a practice common in virtually any marketplace – regardless of the bottom line. Even if the ROI numbers themselves are incomplete or not compelling, the process of correlating services provided with the impact of those services helps us align our costs/efforts (both real cost of effort and opportunity cost) with our benefits (outcomes). For all of its flaws and pimply-faced immaturity, results from SROI analysis can be used to help develop a common vernacular that facilitates performance management. SROI results can empower staff to participate in progressive analysis and program managers to measure and compare program performance, to identify areas that need improving and to eliminate programs that are ineffective or demonstrate insufficient impact given their costs. The pursuit of SROI informs the practice of data-informed decision making.  By extension, this practice can yield impressive results.  For example, by making data-informed adjustments to their notification call program, the Baltimore County Local Management Board decreased failure to appear rates by 70%, significantly decreasing secure detention admissions and their associated costs and further boosting the SROI of their Disproportionate Minority Contact (DMC) intervention.  While the exact dollar amounts are debatable, the SROI framework for driving to and validating this impact is not.

Translating the value of human service work into costs saved or income generated is, admittedly, one of MANY (not the only) tools for demonstrating and communicating impact.  In today’s increasingly competitive landscape, it is a tool which demands competence and proficiency and should be ignored at our own risk.  Movement toward SROI analysis is an exciting step for a sector that has, until recently, argued that it is unique in all the world.  We know it to be a self-deluding assertion that defies measurement and intelligent engagement.  While achieving cost efficiency and effectiveness in the human services sector is still beyond most of our reach, I look forward to learning from those who have lead the way and expect to meet many organizations in the public and private sectors whose SROI leadership will be on display at the upcoming APHSA National Policy Forum.

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The Road to Evidence-Based Federal Budgeting

Posted on May 3, 2013 by Adrian Bordone

As lawmakers in Washington debate federal deficit reduction, it’s becoming increasingly imperative that we take a smarter approach to how our limited resources are spent. That means understanding which programs work, ensuring public money is being spent on programs that work, and that efforts are being made to replicate them with fidelity and make them work more efficiently and in a more impactful manner.

Results for America, an initiative of America Achieves, has been driving an effort to include this approach to resource allocation in the budget debate—encouraging strategic investment of taxpayer dollars, a focus on data, evidence and better results, and discontinuing support of programs that consistently fail to achieve measurable outcomes.

RFA recently partnered with the Hamilton Project to release a policy proposal from Harvard’s Jeffrey Liebman that calls for building upon government strategies that have already emerged to make better use of taxpayer dollars to advance the use of evidence-based policy in the federal government.

The groups have worked to build bipartisan support, bringing Senator Rob Portman (R-OH) and Senator Mark Warner (D-VA) and other officials together to discuss using evidence to improve the efficacy of federally funded programs.

In fact, RFA’s call for increased use of evidence in federal policymaking has a history of bipartisan support: the Bush Administration implemented efforts to measure improve the federal program performance; the Obama Administration has continued that effort, recently proposing an unprecedented amount of funding for evidence and results-based initiatives in its FY 2014 budget proposal; and officials from both parties are also increasingly using data to allocate resources to effective practices.

Though lawmakers have struggled to find common ground in the recent budget debates, and the road to evidence-based federal budgeting is long, perhaps the voices of RFA and others calling for investment in ‘what works’ will be powerful enough shift the federal budget-making process to one that makes greater use of evidence, spurs innovation, and funds solutions that produce greater social impact.

This is an exciting bit of news for performance management policy, and I look forward to seeing how it continues to develop.

For those of you who were able to attend the Child Welfare League of America’s (CWLA) 2013 Raising the Bar Conference with us in DC last month, you will recognize the rising thematic tide… “as a conference attendee you will learn from evidence-informed, evidence-based practices and real-world solutions that demonstrate successful thinking in support of children, youth and families.”  I can’t think of a more clearly aligned instance of “policy and practice.”

 

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The Drive for Public Leadership: Using Purpose, Mastery, and Autonomy to Create Measurable Impact In the Public Sector

Posted on April 26, 2013 by Adrian Bordone

It’s been a busy month— between the CWLA conference, the new data partnership in Nashville, and being a part of the encouraging progress in states across the country towards integrating not merely outcomes measurement but true performance management into state case management systems. I’ll have more to say about this next week, but for now, I’d like to introduce our esteemed colleague, Adam Luecking.  Adam is a nationally recognized leader in the area of Results Based Accountability, CEO of Results Leadership Group, and author of the very recently-released The Holy Grail of Public Leadership: And the Never Ending Quest for Measurable Impact (available here). I know Adam from our joint work supporting the Promise Neighborhoods Initiative with ETO software and the Results Scorecard. Adam and I share a commitment to bringing high-but-reasonable expectations to the human services sector and to using outcomes data to guide practice, policy and funding at all levels of government.  -Adrian

The Drive for Public Leadership: Using Purpose, Mastery, and Autonomy to Create Measurable Impact In the Public Sector

By Adam Luecking

Given the success of Daniel Pink’s Drive, a New York Times bestseller with over nine million views of its corresponding YouTube video, a re-introduction of the three core elements of motivation seems an appropriate lens for talking about a matter of interest to all of us: Measurable Impact.

Pink offers that individuals need to have purpose, mastery, and autonomy to have the motivation needed to truly succeed in the workplace and in life.    These same three pillars are also needed to create Measurable Impact in the Public Sector, using concepts found in the Results-Based Accountability™ (RBA) framework as defined by Mark Friedman in Trying Hard is Not Good Enough, and in my own book, The Holy Grail of Public Leadership: And The Never-Ending Quest for Measurable Impact.

Purpose in the sense that they need to understand how their work contributes to the greater good, mastery in that you want to improve every day and know whether or not you did, and autonomy in that you are equipped and empowered to own that Measurable Impact.

PURPOSE AND MEASURABLE IMPACT

The use of Results statements in the RBA framework are a declaration of purpose.  They are conditions of well-being that everyone can agree on.  Examples include, “Children Succeeding in School,” “All People Are Healthy,” and “Families are Economically Self-Sufficient.” They are the reason you get up in the morning and ultimately the purpose of the quest for Measurable Impact.

MASTERY AND MEASURABLE IMPACT

Do you want to know if you are getting better each day?  You need data to do this – indicators at the community level and performance measures at the program level.  Data can strategically inform your journey to mastery if used correctly.

Setting benchmarks can move a person towards mastery and increase their motivation simultaneously, but it isn’t enough.  Feedback is needed to ensure that you are on the right track, which is why data in the RBA method is presented as trend lines which allow for real-time course corrections.

The driving force behind most public leaders is to create positive results.  RBA has the capability to create a positive impact in the social issues that our public leaders want to affect.  To do this it is important to establish environments in which the work is personally rewarding.  That is why most of us went into public service. If you are mastering something, more likely than not your job will no longer feel like a job, but your pursuit of a passion.  Mastery is a mindset that can’t just be turned on or off by someone else.

AUTONOMY AND MEASURABLE IMPACT

As important as ‘are you getting better’ is ‘do you have the tools to understand and improve your own performance?’ Whether you are talking about the service provider not retaining authorized access to the data they submit for required reports or frontline staff not having visibility into their effectiveness outside of performance review meetings, or even the participant being served having little to no idea of his/her progress along a path toward improvement—autonomy is about owning your own success. It cannot occur without an individual’s understanding of how his/her efforts contribute to measurable improvement, and the resources necessary to support that personal accountability.

MOTIVATION AND MEASURABLE IMPACT

Measurable Impact is the difference between setting the goal and achieving the goal.  Without a solid understanding of your progress and outcomes the work is aimless even if it comes with the best of intentions.  Purpose, mastery, and autonomy, when paired with Results-Based Accountability, are important elements of successful,  Measurable Impact, the Holy Grail of Public Leadership.  If public sector managers keep these elements in mind then they will be able to truly inspire others to join them in success.

Adam Luecking is CEO of the Results Leadership Group, creators of Results Scorecard software.  He is also past president of the Community Indicators Consortium, an international non-profit focused on helping local communities use better data in decision-making.  His new book, The Holy Grail of Public Leadership, can be found at www.amazon.com or www.resultsleadership.org. 

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Taking Action to Drive Change

Posted on April 5, 2013 by Adrian Bordone

I’d like to introduce Tracy Wareing, Executive Director of the American Public Human Services Association (APHSA). With sequestration on many people’s minds, her commentary about the importance of transforming the human services sector could not be more timely. When it comes to technology, I believe this means investing intelligently in child welfare data systems that meet agencies at their current level and take them to the next level, rather than those that attempt to rebuild the ground level and work their way up from there. But the concepts of integration, modernization, and person-centered and outcomes-focused service delivery are broader than just the technology they are built upon. Identifying sustainable, replicable program models is tantamount to increasing and diversifying funding streams; Tracy’s commentary on efficient, impactful service delivery speaks to this. – Adrian

Taking Action to Drive Change

By Tracy Wareing

In the field of human services, it is widely recognized that in a time of great demand and limited budgets, we cannot keep doing business as we once did.  We must find a way to achieve greater impact at less cost.

To that end, leaders who run human service programs in states and localities are urging that we move beyond mild reforms to a real transformation of how we do business. APHSA is made up of these leaders and in the more than a year since we embarked on our policy and practice agenda, Pathways: The Opportunities Ahead for Human Services, we’re optimistic about the future ahead.  At the heart of the Pathways initiative is the development of the “next generation of health and human services”—one that is integrated, person-centered, modernized, sustainable, and outcome-focused.

Our members’ policy priorities and recommendations are set out in a series of published briefs centered on impacting four major outcomes: Achieving Gainful Employment and Independence; Stronger Families, Adults, and Communities; Healthier Families, Adults, and Communities; and the Sustained Well-being of Children and Youth.  And, we’ve developed a series of practical guidance for states on how to connect health services with human services to achieve an integrated, modern delivery model that helps achieve those outcomes.

As we have introduced these Pathways concepts to policymakers, partners and the public, we have noted some key ingredients we believe are critical to driving transformation, including:

  • The need to move beyond traditional governance lines and advance a shared agenda with other public sector partners, non-profit organizations and businesses;
  • Thoughtful, but aggressive adoptions of innovations with the a focus on finding ways to more quickly  take what we know works to scale;
  • The readiness of our community to advance the conversation and transcend differences; and
  • The need for a new national narrative that helps bridge the political divide and moves past outdated thinking and misperceptions.

Building off these factors, we have been bringing together human service and related sector leaders for insightful discussions. While we recognize that our partners must be able to continue to meet the needs of their respective members and missions, we believe that we can also further our respective missions through a new partnership paradigm—one that is grounded in a commitment to “co-create” the next generation of health and human services in this country.

While we work with a growing community of agents for change, we continue to examine the possibilities for improvement.   For example, through our Innovation Center, APHSA has issued a publication exploring alternative financing options for human services.  This paper examines some alternative possibilities that can move human services away from its current unsustainable trajectory and toward viable new funding options. It also explains how the funds that are already available for human service needs can be used in a more productive and efficient manner and better support meaningful outcomes.

I believe Pathways embodies the commitment I hear routinely from our members to drive real change. It is not a “one-time” set of recommendations, but rather a larger effort to set the stage for a transformed system that achieves greater impact in our communities at much lower costs. It will not happen overnight and will require us to be adaptive to the ever-changing environment around us while also ensuring we are resolute about moving toward the desired future state.

Tracy Wareing is Executive Director of the American Public Human Services Association.

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The 11th Hour: Transforming Child Welfare through Continuous Quality Improvement

Posted on March 14, 2013 by Adrian Bordone

As of Monday evening, the Administration on Children and Families (ACF) will no longer be accepting applications for the promising “Building Child Welfare Capacity for Continuous Quality Improvement Project”. This competitive program puts $2,000,000 on the table for assisting state child welfare agencies to develop internal capacity to perform continuous quality improvement (CQI) activities and practices.

This is an extremely exciting development for the future of state child welfare agencies and their practitioners. Partnering with Children’s Bureau, the competitively-selected grant recipient will empower these organizations to better identify, collect, communicate, and use data to improve services and achieve safety, permanency, and well-being outcomes for children, youth, and families.

The Government Accountability Office (GAO) and US Department of Health and Human Services (DHHS) have identified pronounced service gaps in the child welfare system and suggested as one solution to improve outcomes measurement and shift funding from ineffective services towards evidence-based services (see pg 38). This attention to outcomes is essential to any CQI-oriented effort. Chris Stormann, from the Begun Center for Violence Prevention Research and Education at Case Western Reserve University, offered the following insight:

A gap I’ve seen in Child Welfare is that the data tools available often don’t directly incorporate or allow for assessing the impact of external activities (e.g., data from referrals to EBPs, outside services like mentoring or respite, or other informal community-based supports received) on established benchmarks within Child Welfare.    Once the tools needed are developed to monitor and analyze performance, a process for identifying and implementing strategies to improve performance can be taken on to complete the CQI loop. 

Between my correspondence with Driving Social Impact’s readership and conversations as part of my work with Social Solutions, it’s become clear that this change is not only needed, but also desperately sought-after. The sector itself, and more specifically its practitioners, recognize and are discontented with the compliance driven public child welfare systems that use numbers in boxes to represent children and families in need. I imagine the next generation of social workers coming into the field with an understanding of the ways in which data informs and improves every minute of their daily lives, and wondering how they can make a difference, much less a career, in an environment where data collected does not accurately reflect or align with the efforts and outcomes in which they and the families they serve are investing and achieving.  We can do better, much better.  I hope and trust this CQI model enlivens and validates that debate and shines a light on the path for other communities, beyond the selected grant partners, to follow in the future.

Every budget period we fail to make this shift, we risk diminished funding in the next funding cycle. ACF’s own Child Welfare Information Gateway notes: “it is also important to be able to justify why investments should continue to be made in human service systems.” States, by and large, are not equipped to consistently achieve positive outcomes (as indicated by Child and Family Service Reviews)—and these outcomes “must be monitored and evaluated continuously.” The intelligence we stand to gain from CQI child welfare outcomes data can inform the availability and procurement of services to not only demonstrate impact, but to increase that impact, year over year – positively influencing a generation of practitioners and the generations of children and families they serve.

Posted in Child Welfare, Federal, Performance Management (General), State | Comments Off

Why Bill Gates’ “Measurement” Credo Matters for Public Sector Human Service Agencies

Posted on February 12, 2013 by Adrian Bordone

“…if I keep no record of what I do, I can always assume I’ve succeeded.” (start at 2:55)

Steven Colbert, making a joke in his interview with Bill Gates earlier this month, cuts to the heart of one of the most debilitating problems to hamstring the advancement of the human services sector.

In his 2013 annual letter, Bill Gates spelled out in no uncertain terms the importance of fixing this self-destructive problem immediately:

Given how tight budgets are around the world, governments are rightfully demanding effectiveness in the programs they pay for. To address these demands, we need better measurement tools to determine which approaches work and which do not.

(Don’t have time to read the full letter? There’s a great rundown of important takeaways here.)

To be clear, this call to action drives us beyond the barren landscape of compliance toward an understanding of performance – from “did it happen?” to “what difference did it make?”  Measurement aligns our passion with our intellect.  When called to meet the needs of others, we must ensure that the services we are providing are making the difference we intend, and the difference that our communities need. Molly Baldwin, the executive director of Roca (a high-performing youth development organization recently selected for a Pay for Success contract in Massachusetts) really hit this point out of the proverbial park:

“You’re taking somebody else’s money, to get into somebody else’s life, to try to make a difference. You better be showing you can make a difference!”

Measuring Outcomes, Not Outputs

We need to shift focus from outputs to outcomes—from counting numbers in boxes to measuring what is actually making a difference in the lives of the individuals and families.  While philanthropy must continue to be an innovative funder, we know that public sector investment in human services outstrips private investment by an order of magnitude (program spending by the Administration on Children and Families alone exceeded that of all national foundations in 2011—when coupled with program spending in other areas of DHHS, plus HUD, ED, DOL, CNCS and other federal agencies, plus spending by state and local governments, we begin to appreciate the immensity of the difference in resources). Obviously, public policy and funding has an important role to play here. Funding needs to be directed more intentionally towards services and strategies that demonstrate incremental impact and long-term outcome achievement.  This is not compliance – this is beyond compliance.  Not only does it make the specific organization more effective, but also the insight gained from the data collection, analysis and course correction (called “performance management”) can actually help advance the field as a whole.

To date, we see the federal government taking some significant steps in this direction, with over $100MM set aside for Pay for Success initiatives, such as career training under the Second Chance Act, but also initiatives like the Social Innovation Fund (out of CNCS) and Investing in Innovation (out of ED).  Matthew Forti and Colin Murphy at Bridgespan have called attention to this as well, noting the emphasis on ROI, evidence-based practice and program design, tailoring interventions to population segments, investing in a performance management data system and measurement & evaluation.

Some states have followed suit, but many still lag behind. Sadly, we know we need to bring best practice service delivery to scale – we have to make it the norm, not the exception – in order to deliver high quality services to our most at-risk populations.  Our communities and our economy can’t afford anything less.

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Heading Back to Washington, DC

Posted on February 11, 2013 by Patrick Lester

Today marks my last day as the lead author of the Driving Social Impact blog. Starting today, I will be handing those duties over to Adrian Bordone, one of the co-founders of Social Solutions and a good friend. Adrian has been doing a lot of guest blogging in recent weeks, so the blog will be in good hands!

It was an honor helping to launch this blog a year ago and it was a pleasure working with Social Solutions. I look forward to seeing where Adrian and the Social Solutions team take it.

For those who would like to continue to follow me and my work, head on over to the Center for Effective Government in Washington, DC, where I am now the fiscal policy director. If you have been paying much attention to the fiscal cliff and all of the other budget battles in Washington, DC over the past few months, you have a good idea of what occupies my time these days! You can also email me at plester at foreffectivegov.org or connect to me via LinkedIn.

It has been an enormous pleasure meeting and working with the many amazing people who are true leaders in the field while I was at Social Solutions. I am quite sure our paths will cross again!

All my best,

Patrick Lester

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New York State Releases Pay for Success RFP

Posted on January 25, 2013 by Patrick Lester

Last Thursday, Adrian Bordone called attention to the Rockefeller Foundation’s and Harvard Kennedy School’s national SIB Lab competition, the Hudson Institute’s panel on benefits and concerns surrounding Social Impact Bonds, and Social Solution’s webinar on the developing Massachusetts Pay for Success contract. Today, Adrian shares a new Pay for Success (PFS) opportunity, as well as provides updates on last week’s discussions and a bit of context for PFS at the federal level.

Thanks Patrick – it really feels like things are getting moving on this Pay For Success effort.  For public sector program directors and for human services providers that can demonstrate their effectiveness, now is the time to be paying attention to Pay for Success initiatives. States such as Massachusetts, Minnesota, Connecticut, New Jersey, and most recently, New York, have all announced Pay for Success initiatives (some have already announced their chosen recipients). Providers such as Roca are well-positioned to seize this fantastic opportunity to prove the cost-savings that preventative human services program can create for public sector funders by helping individuals in need before that need results in more extensive, expensive services.

Public sector leaders should be setting the bar and scanning the landscape for high-performing human services providers who can predictably deliver on outcome targets.  If you use a PFS model, there is little downside risk to strengthening that relationship. If they don’t succeed, you don’t pay! The private sector bears the bulk of the risk when it comes to funding services until results are proven—with the expectation that the results will be proven, the provider will succeed, and they (the private sector investor) will receive the pay-out for reducing recidivism, homelessness, cases of asthma, etc. In the PFS model, you can report that you have expended taxpayer dollars exclusively on effective programming.

New York State RFP

On Tuesday, in New York State, this movement took another step forward when Governor Cuomo announced his plan to set aside 100 million dollars for health, education, juvenile justice and public safety programs to be funded by the PFS model. While New York City has already announced the recipients and begun outlining the details of its Social Impact Bond-style initiative, this is the first public step taken by New York State (beyond the initial RFI). I am eager to see how state and local PFS initiatives develop, as I and my colleagues at Social Solutions continue to assist government agencies, intermediaries, service providers and investors to identify, track and improve the outcomes that matter most to the individuals and families they serve.

Federal Opportunities

The momentum Pay for Success has gained at the state and local level is all the more impressive because of the attention it has received at the federal level. PFS is actually only one part of the Administration’s emphasis on utilizing evidence-based practice, measuring outcomes and managing performance through diligent use of relevant client data. For government agencies looking for a piece of the federal pay-for-performance pie, you’ve already missed your opportunity to participate in the first wave of DOL PFS funding via the Workforce Innovation Fund—but it’s not too late to apply for a Second Chance Act grant through the DOJ (deadline March 11).  Ten awards of up to $750,000 each will go to state and local governments, territories and tribes that can incorporate a PFS model into their reentry projects. These two grants represent a fraction of the nearly $110 million dollars requested in the 2013 Budget for PFS initiatives. I’ll continue to report on these funding opportunities here, so keep your eyes peeled for updates.

Helpful Resources

  • The DOJ has released a helpful FAQ for those interested in the BJA Second Chance Act grant mentioned above.
  • The Center for American Progress released an informative Social Impact Bond FAQ of its own late last year.
  • The recording of the Hudson Institute’s panel on Social Impact Bonds is now available on YouTube. The transcript should be available next week.
  • Social Solutions’ recent webinar with Roca, Nonprofit Finance Fund and Third Sector Capital Partners, and supporting resources, is now available.

I welcome any questions or comments you may have about Social Impact Bond/Pay for Success-style initiatives at demonstrating.outcomes –at- socialsolutions –dot- com.

Adrian Bordone, Social Solutions

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Human Services Sector Grapples with Social Impact Bonds

Posted on January 17, 2013 by Patrick Lester

This week has been an informative one for burgeoning Pay for Success initiatives. I’ll let my colleague Adrian Bordone get into the details of why, but first an introduction:

For more than 10 years, Adrian has played an important role as advocate and advisor for performance management in the social sector, not the least of which was his involvement in the founding of Social Solutions (sponsors of this blog). Adrian and I have been leading the charge when it comes to helping (and pushing and pulling) agencies to use data and intelligence to demonstrate their effectiveness and continuously improve service delivery since my days at United Way. Thanks Adrian!

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I’m delighted to have the opportunity to speak to the Driving Social Impact readership about this promising innovation, Patrick, especially at a time when it is so immediately and directly relevant to discussions about the future of funding for the sector! I think the announcements that are highlighted below are yet another encouraging sign that measurable improvement will drive continued investment in the Sector.  Thankfully – for the human services sector as a whole, and, more importantly, the individuals, families and communities we serve – we will not be going back to anecdote and exception as sufficient evidence of impact.

On Monday, the Rockefeller Foundation in conjunction with Harvard Kennedy School (HKS) announced its national competition for four state and local governments to receive free technical assistance from HKS’ SIB Lab.

Yesterday (1/16), the Hudson Institute hosted a panel discussion with representatives from Goldman Sachs, the Minnesota Council of Nonprofits, Social Finance US and the Bridgespan Group (Daniel Stid more specifically, whom some of you may remember from Patrick’s response post about the “Social Services Industrial Complex” last year). The panel discussed the potential benefits of Social Impact Bonds, but also raised important concerns about the pitfalls of the approach, for instance the need for confidence in implementation and the challenges of long-term contracts and of traditional evaluation methods. I will be posting a link to the event transcript here when it becomes available; in the interim, the recording of the streaming broadcast can be found here.

And today (1/17), Social Solutions will be hosting a webinar with Roca (one of the recipients of the first Massachusetts Pay for Success contracts), Nonprofit Finance Fund and Third Sector Capital Partners. I’m particularly excited for this webinar because it will focus on the practical logistics of the Pay for Success model: how to determine outcomes and indicators, set achievement targets, structure the contract to facilitate cost-savings, and empower service providers to feel confident in their ability to deliver.

I welcome any questions or comments you may have about Social Impact Bond/Pay for Success-style initiatives at demonstrating.outcomes –at- socialsolutions –dot- com.

Adrian Bordone, Social Solutions

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3 Case Studies of Nonprofit Performance Measurement

Posted on January 10, 2013 by Patrick Lester

Last month the American Youth Policy Forum released a new report, “Beyond the Numbers: Data Use for Continuous Improvement of Programs Serving Disconnected Youth.” The report contains some interesting lessons drawn from case studies of three different results-driven organizations.

Some highlights include:

The Need for a Clearly Articulated Theory of Change: One of the case study organizations, Roca, a non-profit in Chelsea, Massachusetts, had found in the 2000s that its model and programming had been ineffective in facilitating real change for the young people it worked with. In 2005-2006, the organization began an internal evaluation along with extensive external research, including evaluating the literature from several fields of study, including youth development, criminal justice, and behavioral change. It eventually settled on a new model that emphasized improvement for the youth it worked with in stages, with an accompanying expectation that relapse would occur at some point for many youth. “Rather than set youth up for failure with unrealistic expectations, Roca embraced relapse as a natural and predictable step on the path to sustained behavioral change.” The organization then designed a data system that reflected this new model, tracking youth through various stages of change and emphasizing “relentless outreach” to keep them engaged.

Investing in Data: The report detailed the need to invest in data. This included both investment in a data platform (all three case study organizations used ETO software from Social Solutions), at least one dedicated professional staff member to oversee data collection, and continuous training for all other staff involved in data collection, including front line staff. The investment could also include the cost of external program evaluations, which can help with marketing to funders.

Continuous Learning: In the Roca example mentioned earlier, the organization used data to learn and continuously improve its programming. For example, its data showed that the youths it worked with showed the greatest gains when they were in the program for about 24-28 months. Youth that stayed longer, however, became overly reliant on it. The data also showed where its efforts did the most good, which helped guide it to focus on “young men, ages 17-24 with prior involvement in the juvenile justice system, no employment history, and no high school credential.”

Data Sharing: Many social service organizations work with populations through a variety of different programs, which requires data sharing across different systems. This is particularly accute for collective impact efforts where multiple organizations are working together. The report detailed how its case study organizations dealt with this challenge, including associated technical, privacy, and legal issues.

The full report can be found here.

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