Towards a Performance-Driven Social Sector

Towards a Performance-Driven Social Sector

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Third Sector is pleased to present, in partnership with GuideStar and America Forward, the new survey, “Towards a Performance-Driven Social Sector: A Service Provider Perspective on Trends in Government Contracting.”

Across the country, communities are changing the way they serve people in need. Local and state governments are taking a new look at how they contract for social services delivered to our most valuable citizens. Closer examination of current contracting practices may ultimately outline a path to healthier, safer, and more just communities, but only if all stakeholders have a voice.

The trend towards performance-based contracting has sparked a national conversation about how critically needed social services are procured, funded, and evaluated. However, the volume of public and private sector voices in these discussions has often drowned out the voice of local service providers delivering services to children, families, and other disadvantaged individuals in our communities.

To bring these voices to the table, we conducted a survey of more than 400 service providers to assess their attitudes and awareness of new trends in government contracting. Our survey explored the current relationship between nonprofits and government, the attitudes nonprofits hold towards program evaluation and performance-based contracting, and the level of understanding nonprofits hold of Pay for Success. These findings are only the beginning of the conversation: we hope the questions raised in this report fuel further research and discussion on the role of our social sector and its relationship to both the public and private sectors.


  • Service providers view government contracts as valuable tools in fulfilling their missions. Respondents with public funding reported positive attitudes towards government contracts, while respondents without government contracts believed that government contracts would allow their organizations to better fulfill their mission.
  • Though generally unfamiliar with performance-based alternatives to traditional government contracts, service providers are interested in program evaluation. Respondents were largely unfamiliar with new performance trends in public contracting, though the majority agreed that rigorous program evaluation could improve the services they deliver.
  • Service providers view themselves as the most critical stakeholder to the success of a Pay for Success project. A majority of respondents agreed that they would be interested in pursuing the model, but highlighted the risk of imbalance between a project’s most influential stakeholders and the service provider, whose services are critical to the project’s success.
  • Service providers are interested in Pay for Success, but are still new to the concept. The low level of familiarity with Pay for Success among respondents illustrates the ongoing need for resources and outreach tailored to service providers interested in pursuing the model.


  • Incorporate local service provider input in procurement and contract design.
  • Provide resources on program evaluation for service providers interested in performance-based contracts.
  • Amplify the voice of service providers in Pay for Success projects and other
    cross-sector initiatives.
  • Conduct further research into the procurement and contracting experience
    between service providers and government agencies.