Principles for Equitable Outcomes Funding: Putting the Principles to Work (Part 2)
In the first of this two-part article, we explained our focus on centering equity in outcomes funding to advance health and well-being efforts at a community level. To this end, we propose testing principles that center equity as a core value within the broad outcomes-based funding field.
The principles below represent our current thinking. We intend to create future iterations of these principles with communities, funders, and other partners through ongoing dialog and by testing the principles in practice.
Local Communities Decide Priorities, Goals, and Outcomes
We believe communities understand their needs and priorities and trust them to decide on outcomes that will reflect those needs. We do not “fix” or “empower” communities. Communities have history and power that precedes our involvement and will endure long after it.
Define and Value Outcomes by Community Needs and to Reflect Societal Benefits
Outcomes must encompass what really matters to people; center story, culture, and history; and entail measures to support the change the community wants for itself. Further, we define the value of an outcome to include its long-term benefits to individuals, families, and communities. Investments to achieve these benefits must aim to remove the systemic barriers that create inequities in our communities.
Share Benefits and Risks Equitably
We design strategies to ensure that benefits, including the value of outcomes, savings, and/or revenue, are shared by both funders and the community. Similarly, there are risks in outcomes-based funding models for communities as well as funders. However, current arrangements usually only mitigate risks for funders through mechanisms like a risk premium, while those who hold the least power, (e.g., communities and service providers), are exposed to the most risk. We aim to develop ways to share risk by placing it with partners that have the resources to absorb it and directing cost benefits to be reinvested in community-led efforts.
Support, Cultivate and Sustain Community Leadership
We build from a community’s strengths, assets, and existing resources (defined broadly to include its people, history, expertise, and culture) to support leaders in achieving community goals, rather than assuming the community has deficits and that new structures must be created. We do not propose scaling a solution or discrete projects, but rather a widely applicable approach to support diverse communities on their own path to health equity.
Acknowledge Institutional and Systemic Barriers to Health Equity
We acknowledge that the challenges communities face are rooted in factors including systemic and institutional discrimination and bias, policies and norms that support white supremacy, inequitable systems of wealth accumulation, and other aspects of the status quo that prevent health equity.
As leaders, we must all understand, analyze, and adhere to power, justice, equity, diversity, and inclusion principles. As such, we commit to conducting an internal power analysis of our organizations and holding our partners to the same standards. Further, we intend to make sure that everyone we bring into a community is a respectful partner and a good guest.
Challenge Existing Systems
Current outcomes funding approaches are rooted in systems that reinforce existing power structures and must be changed to put these principles into action. This is an opportunity to reflect on the evolving nature of outcomes funding, along with the assumptions and systems that have supported the development and implementation of projects in the field. It is critical to identify and dismantle the barriers and challenges embedded in the state of current outcomes funding and find solutions that place community at the center of the future direction of outcomes funding.
Expand Outcomes and Redefine Success
Existing outcomes funding tends to require strong causal evidence linking interventions to outcomes. This traditionally requires standards of proof, such as randomized control trials, which may not be available for the intervention or outcome, appropriate for evaluating complex community strategies, and may require resources beyond the reach of community-led work.
Ensuring a diversity of approaches is further limited by the quantitative metrics available in existing systems. Success defined as proof of outcomes also limits qualitative experience and knowledge that might define success in terms of community dignity, hope, spirituality, and holistic well-being. Additionally, expectations to prove causality between interventions and outcomes can focus on the intervention instead of improving the outcome. This can limit higher-risk innovative interventions by prioritizing tested, lower-risk interventions. Funding a narrow range of interventions in response to a limited range of issues — while minimizing risk for funders — will not move communities in the direction they want to go.
Outcomes funding in its current form also limits the ways that outcomes are valued for funding commitments, which focuses on opportunities to limit wasteful spending and increase cost savings. The value of outcomes is easier to measure for short-term evaluation using existing data systems, which limits understanding of the value of multi-generational outcomes, and long-term individual and societal benefits.
Redefine Readiness for Outcomes Funding
Outcomes funding is intended to be agnostic in terms of geography, population, community, organizations delivering interventions, and types of outcomes that have the opportunities to be resourced through these funding mechanisms. Yet, the predominant paradigm within the field values larger, well-resourced organizations with an ability to prove readiness to achieve outcomes.
Government, nonprofit, and community capacity is seen as a requirement for participation in outcomes funding efforts. The complexity of the financing tools and contracting often requires significant up-front time, resources, staff commitment, and multi-layered teams even before a project launches. Well-established and resourced governments and organizations that have capacity and flexibility for contracting, financial analysis, evaluation and fidelity to program delivery give them more opportunity than smaller, less-resourced governments, organizations, and communities. This has also led to more outcomes funding projects being explored and launched in urban than rural areas of the country.
The complexity of transactions has also forced reliance on national experts and intermediaries within the outcomes funding field. This reinforces the selection of communities and organizations deemed ready to engage with intermediaries and research institutions while limiting local capacity and knowledge to drive efforts. Community expertise, lived experience, and grassroots capacity are not valued in the design and implementation of outcomes funding projects.
Finally, the focus on scaling interventions also limits diverse communities’ access to outcomes funding. The commitment to scale forces a lens of standardization of approaches, interventions, and outcomes, and centralizes decision-making that is antithetical to a community-centered approach.
Embrace Complexity
Outcomes funding focuses on investments in discrete projects and does not consider the complexity of health and well-being in communities. The project-based approach focuses on one or a few outcomes that can be isolated in evaluations to assess the success of an intervention. This prioritizes causal pathways of intervention to outcome, to the detriment of understanding the larger context and multiple determinants affecting the health of communities. These priorities limit cross-sector efforts with diverse partners.
The tension of testing solutions to meet critical needs in real-time without sacrificing pursuit of long-term goals is a challenge and opportunity for outcomes funding. The urgency of critical, immediate needs can limit efforts to understand and prevent challenges that result in poor health outcomes, inequities, and societal challenges. Outcomes funding lacks a way to prioritize prevention-focused, long-term thinking with systems change objectives.
Name and Reorient Power
Outcomes funding, like many other fields and sectors, has not reconciled the power, privilege, and inequities that are intrinsic to the systems that dominate the field today.
In current outcomes funding, communities are often not charged with identifying critical needs. Outcomes are often selected by funders or lead service providers instead of communities, resulting in those that will yield payments and may not reflect community aspirations, lived experience, and wisdom. While community engagement is increasingly incorporated into specific project components, decision-making across the lifespan of projects often limits community voice. This top-down decision-making significantly limits the ability of communities to access funding on their terms.
These systems and structures define the landscape of funding decisions, resource allocation, and access to levers of change. To date, these factors have not been comprehensively reviewed to address and redress the misallocation of power in the spirit of achieving better outcomes.
Putting the Principals to Work
The challenge we have set is not easy to overcome, and we do not anticipate that the entire outcomes-based field will begin centering equity immediately. But if we do not ask what is possible at the intersection of equity and outcomes, we will never know what might be achieved. Outcomes funding holds the possibility of supporting a diversity of approaches tailored to local needs and build on local expertise. We want to figure out:
● What it will take to operationalize these concepts
● What struggles are or do we anticipate facing
● What these principles mean for our respective disciplines, sectors, and geographies
Where We Are on Our Journey
Our intent is to live our values and the principles outlined in this piece. We are reflecting on how we can move toward this vision and invite others to contribute to a more equitable future.
The intent of this piece is to invite contributions, critiques, dialogue, and ideas, to learn together and to co-create these principles. We recognize our starting place may be missing perspectives, opportunities, and voices and we are asking you to bring them and advance new ideas in this space.
Please share your reactions to the article through this SURVEY. We are partnering with the Federal Reserve Bank of San Francisco’s Community Development Department to collect feedback and promote cross-sector dialogue on the principles outlined above. Your comments will help shape an upcoming issue of the Community Development Innovation Review that will convene perspectives, critiques, and ideas that can advance the theory and practice of equitable outcomes funding.
For additional background on the outcomes funding field, read the fourth volume in the San Francisco Fed’s “What” series: What Matters: Investing in Results to Build Strong, Vibrant Communities.
This article was written by Jen Lewis-Walden & Matthew Tinsley, Shift Health Accelerator, Jessica LaBarbera & Kristin Giantris, Nonprofit Finance Fund, Jeremy Cantor & Erin Shigekawa, JSI.
