Giving Compass' Take:
- Eleanor Carter and Nigel Ball discuss how focusing on shared, measurable outcomes can build trust between different sectors and improve the effectiveness of resulting social programs.
- How will collaboratively designing outcomes for social impact programs build a foundation of trust between partners in different sectors?
- Learn about social impact platforms.
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In November 2012, an article in The Telegraph reported that a flagship UK government welfare-to-work scheme was “worse than doing nothing.” In May 2016, the Independent splashed another headline to make the government wince: “Watchdog Criticises Government’s Privatisation of Probation Service.” And in December 2016, BBC News reported on an attempt to “turn around the lives” of families facing difficulty: “Troubled Families Turnaround Claim Misleading, Say MPs.”
What do these three ugly headlines have in common? The answer is quite straightforward: The three government programs they refer to all made use of a Payment by Results arrangement—a form of outcomes-based contracting largely synonymous with Pay for Success or results-based financing. Instead of paying local service-delivery agencies and private providers upfront, the government agreed to pay at least partly in arrears, based not on specified services but on the outcomes program participants achieved.
Though the front-page splashes have subsided, the UK government’s enthusiasm for Payment by Results has not. The recidivism program mentioned above closed in 2020, but the other two subsist, albeit rebranded and much evolved.
Closely related programs also continue to flourish. Take the “impact bond” (or “social outcomes contract”), which adds a third party—a social investor that provides risk-bearing capital which it will lose if results are not forthcoming. A dataset compiled by the International Network for Data on Impact and Government Outcomes (INDIGO), which our research group leads, shows that impact bonds continue to launch at pace worldwide, totaling 206 so far.
Given the apparent political and reputational risks for governments in using these mechanisms, what explains the continued interest? Are they a lost cause, or—with modification—could they help build a robust social economy that better supports people and the planet?
Read the full article about shared outcomes for social impact programs by Eleanor Carter and Nigel Ball at Stanford Social Innovation Review.