Pay for performance: a new way to think about funding social change?


Do you believe in performance-based pay? That’s the premise behind social impact bonds (or SIBs): rather than mandating the delivery mechanism for change, a government agency specifies the social outcomes (aka results) it wants, then funds a nonprofit that meets them.

Jeffrey Liebman, professor of Public Policy at John F. Kennedy School of Government at Harvard University, suggested this innovative financing model, already in use in the U.K., as a way to accelerate social change. What kinds of social change?

  • Increased kindergarten readiness
  • Higher college completion rates 
  • Fewer criminal offenses and incarceration rates
  • Higher the future earnings of laid-off workers 
  • Fewer hospital readmissions among patients with chronic illness

Could it work here?

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