Turning the Abstract into PracticeSupporting the Federal Government to Operationalize Pay for Success

Social service delivery is serious, complex, and expensive. The federal government spends hundreds of billions of dollars per year on these programs. And yet, this massive universe of funding is often not allocated based on which programs are the most effective or in a way that measures the impact of programs over time. We see a need to change that by supporting the federal government in connecting resources to results and driving the adoption and implementation of outcomes-oriented funding. Even when government, service providers, and other stakeholders want to adopt outcomes-orientation in their programming, it can be difficult to understand how to begin. This is when a toolkit can help turn the abstract into practice. Through a growing engagement with federal government partners, Third Sector worked with two separate agencies in 2019 to develop such toolkits and guides.

In partnership with the Federal Youth Services Bureau's (FYSB) Runaway and Homeless Youth Training and Technical Assistance Center (RHYTTAC) - Third Sector developed a flexible and informative tool to help RHY grantees start their journeys towards an outcome orientation. Using a human-centered approach, Third Sector sought input from a wide range of stakeholders, including RHY grantees. The toolkit provides information, resources, and exercises on how RHY grantees can develop the elements of an outcomes contract. It builds on existing RHYTTAC resources and demonstrates how each element ties to a finalized outcomes contract. It uses exercises to help grantees develop an outcomes-focused program hypothesis to serve as a launching pad and build a contract based on this hypothesis. The toolkit also includes information on the Social Impact Partnerships to Pay for Results Act (SIPPRA) and how RHY grantees may want to consider applying for additional funding made available through the Act. The toolkit was used as part of the 2019 National RHY Grantee Training.

Outcomes Contracting Toolkit for RHY Programs Front Page
USAID "Setting, Pricing, and Administering Performance Metrics in Pay-for-Results Programming" front cover

In August 2019, Third Sector worked with the United States Agency for International Development (USAID) to publish a step-by-step guide for “Setting, Pricing, and Administering Performance Metrics in Pay- for-Results Programming”. The guide is intended to help USAID Missions around the world understand the basics of Pay-for-Results (PfR) contracts, their connection to current contracting practices and authorities, and how to think through the design of a new pay-for-results project. The USAID guide mirrors six aspects that Third Sector has found to be critical when designing P4R projects which include deep stakeholder engagement, setting defined goals, including clear metrics of measurement, ongoing use of data and evaluations, providing incentives for performance, and adopting feedback loops for continuous improvements. Read more about the guide in an earlier blog, “Applying PFS Lessons to PfR in Development”.

We look forward to continuing to partner with FYSB, USAID and other federal agencies to develop toolkits and guides for program partners. Third Sector is exploring training options with individual USAID offices to see how outcomes, metrics, and incentives can create lasting impact in the countries they work.

To learn more about Third Sector’s work with developing toolkits and guides for the federal government or to explore other opportunities to make federal funding streams and programs more outcomes-oriented, please contact Maria J. Posey, Director of Federal Business Development at mposey@thirdsectorcap.org.