Giving Compass' Take:

• A collection of essays titled, What Matters: Investing in Results to Build Strong, Vibrant Communities, examines how to achieve impact through funding outcomes and how the culture of organizations can lead to results. 

• How does this type of funding practice allow for more feedback and communication between donors and organizations? What are the benefits of this?

• Read about why grantmaking strategies should focus on results. 

How do cultural rules and rituals drive organizational change?

To achieve systems change, we must pay attention not just to formal procedures, but also to culture.

Imagine a homeless shelter that is paid to end homelessness. Or a health clinic paid to keep people healthy. This might sound unremarkable—because isn’t this focus on outcomes what our social system is all about? Unfortunately not. We know that the deepest aspiration of the people who work in and run these organizations, and their donors and government funders, is to make long-term positive impact on the clients and communities they serve. But that’s not the basis on which we pay them. Instead, almost all social system funding is allocated based on activities, not results.

This can change. An outcomes-oriented system has the potential to enable service providers to focus on producing lasting results. And it could reinvigorate support for social service funding as a worthy endeavor rather than a perceived waste of taxpayer resources. Such success might restore faith that we can make a difference and improve lives.

What Matters: Investing in Results to Build Strong, Vibrant Communities is a collection of essays by leaders in government, nonprofits, philanthropy, and finance that explores what it takes to reorient our social programs and funding to achieve lasting outcomes for the people and areas that need it most. In this chapter, Zia Khan of The Rockefeller Foundation reminds us that this type of systems change requires us to pay attention to culture, and not just to formal procedures.

Results-based funding is a powerful concept that could transform how we fund programs and what results they achieve. Realizing that potential will take lots of hard work and change. Let’s be sure to capture the opportunity by matching brilliantly designed rules with thoughtful treatment of less obvious rituals.

Read the full article about results-based funding by Zia Khan at Stanford Social Innovation Review.