An article featuring the work of Youth Villages is among more than 20 articles on “pay for success,” the performance-based contracting concept that is touted to improve outcomes for children and families while increasing accountability for taxpayers and governmental agencies included in “Community Development Investment Review” recently published by the Federal Reserve Bank of San Francisco.

 

The article, written by Youth Villages CEO Patrick Lawler and Jessica Foster, the organization’s director of strategy, focuses on how to make performance-based contracting work, using experience gained from more than seven years of “pay for success” contracts with the Tennessee Department of Children’s Services. Youth Villages is a national nonprofit organization that helps children in child welfare, children’s mental health and juvenile justice systems throughout the country.

Lawler and Foster say that despite some challenges in implementation, performance-based contracting in Tennessee’s child welfare system has led to better outcomes for children and families. “In the first three years, care day utilization went down by eight percent, and permanent exits went up six percent – without any increase in reentries to care,” they said. “These percentages may sound like fairly small improvements, but they are pointing in the right direction and mean that hundreds of children each year are achieving permanency.”

The article says the best performance-based contracts give providers flexibility and include transparent and consistent data collection. The best contracts ensure that all providers are compared against common benchmarks, take each provider’s population mix into account and overtime, shift “market share” to providers that produce the best incomes, the nonprofit executives conclude.

“Absent that redistribution, the state will fall short of delivering the best possible outcomes for its troubled youth,” Lawler said.

Despite challenges, Youth Villages is an advocate for the “pay for success” concept. “The current system of pay-for-outputs government contracting is not focused enough on real outcomes that we – providers, government, everyone who cares about kids and families – seek,” the authors conclude. “We believe that performance-based contracting has potential to achieve better results on limited budgets.”

Youth Villages is a private nonprofit organization dedicated to helping emotionally and behaviorally troubled children and their families live successfully. Founded in 1986, Youth Villages helps more than 20,000 children and families each year from more than 20 states and Washington, D.C., through its Evidentiary Family Restoration ™ approach. Involving intensive work with the child and family, as well as a focus on measuring outcomes, keeping children in the community whenever safely possible and providing accountability to families and funders, EFR produces lasting success for children. Youth Villages uses its EFR approach in a wide array of programs, including intensive in-home services, residential treatment, foster care and adoption, transitional living services, mentoring and crisis services. EFR consistently produces success rates twice that of traditional services at one-third the cost of traditional care. Named one of the Top 50 Nonprofits to Work For by Nonprofit Times and Best Companies Group in 2010 and 2011, Youth Villages has been recognized by Harvard Business School and U.S. News & World Report, and was identified by The White House as one of the nation’s most promising results-oriented nonprofit organizations. For more information about Youth Villages, visit www.youthvillages.org or call (901) 251-5000.