Giving Compass' Take:

• Writing for GuideStar, Nonprofit Finance Fund CEO Antony Bugg-Levine discusses the importance of outcomes in nonprofit work and why it's important to reorient around them, cutting through the usual red tape.

• How many organizations have made this shift already? And how many still need to? There's a compelling case to be made that this will bring grantmakers and grantees closer, engage communities more and break down rigid silos.

• Here's why we need student-level data to improve higher education outcomes.

This post is reprinted with permission from What Matters: Investing in Results to Build Strong, Vibrant Communities, published by the Federal Reserve Bank of San Francisco and Nonprofit Finance Fund.

You are likely not alone if you are wondering why we have written a book about the potential to orient our social system around results and outcomes. Because isn’t that what it’s already about? Don’t we already provide funding to hospitals to keep people healthy, to homeless shelters to end homelessness, to childcare centers to prepare children for a fruitful life, and to job training programs to find people permanent employment?

Unfortunately not. We know that the deepest aspirations of the people who work in and run these organizations, and the government officials and private donors who fund them, is to make long-term and sustained positive impact on the clients and communities they serve. But that’s not the way the social sector works.

Instead, we live in a system oriented around activities and outputs. Almost all the funding for our social system is allocated by activities, rather than long-term results. Payment flows to the hospital for providing treatments, to the homeless shelter based on the number of shelter beds occupied, to the early childcare center for keeping the classroom filled, and to the job training program for providing training.

Many organizations do amazing work and provide essential services that make an important, positive impact on the people they serve. But this output orientation forces too many to spend too much time and effort complying with the red tape that comes from contracts that release funds only when an organization proves it undertook a prescribed set of activities. And they do not have the flexibility to innovate and figure out what works in pursuit of results we all seek. For example, the homeless shelter paid by the number of beds it fills will not be in a position to provide additional therapy services that could help its clients address the root cause of their homelessness and more quickly transition out of the emergency shelter.

Despite our real progress on a range of social issues, over 45 million Americans still live in poverty, more than half a million remain homeless according to the latest HUD point-in-time count, unemployment among young African American men stubbornly persists around 30 percent in many cities, an opioid abuse epidemic is sweeping across our country, and, while the United States has 5 percent of the world’s people, we hold 25 percent of the world’s prisoners in a system that tends to warehouse rather than rehabilitate.

Read the full article about the fuss regarding outcomes by Antony Bugg-Levine at GuideStar Blog.