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Would “pay for performance” be good for the social services? | JustPhilanthropy.org
Steven Mayer argues that paying nonprofits to accomplish specific outcomes will result in them focusing on quantifiable results that might not be high quality. However, one of the nice things about the Pay For Success program is that the government as payer has a vested interest in making sure that the results are “real”, otherwise they won’t get the cost savings they expect.
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ABOUT SEAN STANNARD-STOCKTON
Sean Stannard-Stockton is the president and chief investment officer of Ensemble Capital Management, located in Burlingame, CA, midway between San Francisco and Silicon Valley. From 2006 through 2012, Sean authored the Tactical Philanthropy blog and wrote regular philanthropy columns for both the Financial Times and the Chronicle of Philanthropy. In 2012, Sean officially ended the blog to focus on growing Ensemble Capital.
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2 Comments
The number of entry-level bureaucrats that would be needed to police Pay for Success outcomes and the financial transactions underlying them will make Medicare administration look miniscule. If we’re going to rationalize and monetize social service, let’s create a Consumers’ Union for Social Services to rate the quality of different vendors. Promoting a key set of performance dimensions for these services is the key first step, just as CU tells us what a really good toaster, or insurance plan, does.
I think that’s a good idea. One thing that has been troubling me is that the current nonprofit rating systems do not differentiate between rating the organization and rating the program. For the Government as a buyer of results, they need good guidance on which programs work, not which organizations are strong. See my discussion on Philanthropic Investors vs Strategic Philanthropists vs Charitable Buyers.