Using SIF funding, Third Sector conducted a feasibility assessment that supported Friends of the Children (FOTC) in learning how FOTC and the State of Oregon can potentially develop a cost-effective, pay-for-performance contracting model that could lead to better outcomes per dollar spent for child welfare, education, and/or juvenile justice expenditures. The engagement specifically assessed the potential impacts of the FOTC model on the safety, permanency, and well-being of children in foster care, and focused on improving FOTC’s data infrastructure to deliver (and price) outcomes.
Sub-Recipient: Friends of the Children (FOTC)
Friends of the Children is a Portland, Oregon-based international nonprofit organization with a research-based, evidence-informed, replicable model for helping high-risk children avoid negative behaviors and life outcomes. The organization pairs high-risk five to six year olds with highly trained and skilled full-time professional mentors (“Friends”) who sustain an unconditional, intensive Friend-child relationship over 12.5 years of a child’s growth and development. This one-on-one approach is based on research showing that the single most important factor in fostering resiliency in children is a caring and consistent relationship with an adult. Launched in 1994, FOTC works with more than 1,000 high-risk children in five states (OR, WA, FL, NY, MA) and the UK to break the cycle of inter-generational poverty and help young people lead productive adult lives.
Motivation for Exploring Pay for Success
FOTC currently serves over 450 youth in Portland and Klamath Falls Oregon, 61 of whom have been selected from foster care. The organization operates a research-based paid professional mentoring model that is well suited to continue expanding in foster care settings due to consistency in risk criteria for enrollment, rigorous and stable selection process, and a healthy culture of data gathering in the priority areas of child wellbeing, education, justice, and family health.
Third Sector led the PFS feasibility assessment to explore the scaling of FOTC’s intervention within the state and build the organizational infrastructure to deliver (and price) outcomes government is willing to pay for. The engagement included the following key work streams: data access and analysis, defining population and outcomes metrics, intervention assessment, end payer assessment & economic analysis, and legal and regulatory landscaping.
The analytics associated with the feasibility study is enabling FOTC to further advance its evaluation and evidence-base track record, and validate it with government datasets. Moreover, FOTC’s efforts are aligned with various state department’s objectives to develop a data-driven ecosystem for services and to develop prevention and cost-effective services for at-risk youth. FOTC is well positioned to apply lessons learned from Oregon to its network in other states as it continues to expand its services in the public sector.
Findings and Insights
Through the PFS feasibility assessment, Third Sector determined that FOTC is well positioned for performance- based contracting for outcomes with child welfare, education, and/or juvenile justice end payers. The organization has a pathway to (i) develop analyses on top of government datasets that validate intervention impact, (ii) anchor contracts on successful delivery of pre-determined benchmarks, and (iii) develop a performance feedback loop with its partners.
FOTC demonstrated strong PFS readiness in identifying and enrolling a high-needs population across multiple counties and has chosen outcome metrics that can be rigorously evaluated. FOTC’s intervention has a promising track record of success that is being refined and validated with administrative data. Once the organization finalizes its data analysis and can price outcomes, it is on a path to develop contracts with various government end payers that have supported FOTC’s feasibility study.
The Feasibility Assessment enabled FOTC to:
- Identify Substantial Need in Foster Care – In Klamath, Washington, Clackamas, and Multnomah Counties, there are cumulatively at least 90 five to six years olds annually placed in foster care that have key risk factors suitable for FOTC enrollment. These youth are removed from the home due to neglect and various other risk factors FOTC has a track record in successfully addressing.
- Integrate Government Data to Validate Intervention Impact – The engagement secured FOTC access to an integrated dataset to develop an Oregon-centric evidence base. Such information consolidates child welfare, education, and self-sufficiency outcomes for children in foster care from 2002 through 2024 in Multnomah, Washington, and Clackamas Counties. FOTC can rely on the longitudinal dataset to (i) improve service delivery, (ii) develop its own evidence base for education, foster care, and juvenile justice outcomes, and (ii) serve as the cost basis for negotiating performance benchmarks and contract pricing.
- Prioritize Key Contracting Outcomes – The feasibility study identified outcomes to anchor a performance-based contract by assessing (i) direct impact on government spending, (ii) feasibility to rigorously evaluate over three to five years, and (iii) priority for potential end payers. Such key outcomes for FOTC include reduction in foster care length of stay, lower foster care re-entries, and improved school attendance, among other indicators. FOTC refined its evidence base development and collaborated with government partners in state and local level Human Services, Education, Juvenile Justice prevention departments, which has ultimately advanced a culture of continuous learning and performance within the state of Oregon to best meet the needs of at-risk youth.
Third Sector Capital Partners, Inc. led the feasibility assessment
ICF International provided data and technical project support
National Governors Association provided project support