Current budget negotiations are largely politically driven, debating funding levels without discussing the impact of federal programs. In FY2015 alone, the U.S. government spent $1.11 trillion discretionary dollars in health, education, employment, and housing. Yet we have little evidence of which programs made any difference. Government has a responsibility to ask whether its investments had an impact, and how much relative to costs. To do so requires shifting to a new mindset. To provide better services and solve our most intractable social challenges, we need to focus on outcomes. Today, we have the data, tools, and technology to drive this shift.
So what does a focus on outcomes look like? It is a child who exits the state foster care system for good because government began paying providers for placing children in stable homes and not just for funneling children in and out of the system. That is an outcome. Or, an unemployed American who finds stable work because government paid for the program that actually placed people in jobs rather than just merely supporting individuals while they look for work. That is an outcome. When policymakers focus on achieving outcomes, governments make smarter investments.
While paying for outcomes seems like common sense, it is more the exception than the rule, especially when it comes to social service delivery. Only a small percentage of government spending on social policy is focused on achieving outcomes. In fact, only 1 percent of the FY2015 discretionary budget was allocated for outcomes-focused initiatives. Moving to outcomes financing means government prioritizes results rather than numbers of people served. Citizens should demand results rather than simply allowing funding to be spread across programs with little regard for outcomes.
We have seen the downside of ignoring outcomes. For example, we have created an incredible system of financial aid to enable access to higher education. However, funding has largely been based on student enrollment regardless of graduation rates or academic or employment outcomes. As a result, despite our best intentions, students and taxpayers have spent billions on programs with low probability of success or value. This is changing; but think of the missed and wasted opportunities.
Today, data and technology are increasingly unleashing the potential for government to innovate and deliver modern solutions. In communities across the United States, we are seeing countless examples of smarter policy propelled by cutting-edge data and technology.
In 2006, New York City successfully reformed its juvenile justice system by streamlining data across city departments and creating a real-time feedback loop between agencies. The data has helped policymakers test assumptions and helps city workers and courts make better decisions about at-risk youth. This has resulted in a 60 percent decline in juvenile placement and a 35 percent decline in juvenile detention.
Smarter financing also matters and can lead to results. Take the recent success story out of Salt Lake County, Utah. In 2013, Mayor Ben McAdams secured bipartisan support for an innovative financing program, Pay for Success, to expand high-quality preschool programs for low-income children with the goal of preventing youth from unnecessarily entering special education. The first results from the Utah High Quality Preschool Program are promising— of the 110 students expected to enter special education, the program successfully prepared all but one student to enter mainstream schooling.
Thanks to advances in research and evaluation methodologies, we now know more about what works in social policy and how to enable people and communities to thrive. Bipartisan policymakers and leaders are looking for ways for government to deliver better services and achieve maximum results. They are experimenting with how best to use new tools to design smarter policy focused on realizing social impact at scale.
We need more. These efforts are only a small part of what is needed to achieve systemic results at scale. In our recent paper, Smarter Government for Social Impact: A New Mindset for Better Outcomes, we propose ways for government to accelerate transformative efforts, such as those being tested and implemented in New York City and Salt Lake County. Americans deserve a government that rewards outcomes, makes the best use of every dollar, and improves lives.
Policymakers have an opportunity to transform government by driving innovation, leveraging data and technology, and aligning financial incentives. Both sides of the political aisle can and must move to action. Liberals who champion poverty alleviation, social justice, and equality are championing only platitudes if they continue to perpetuate a system that keeps public wealth in the hands of a private few. Conservatives who champion fiscal responsibility are championing only waste if they continue to support a system that promises accountability but delivers empty promises with no impact. It is time to create a 21st Century government that is smarter and delivers real solutions.
Shelton is chief impact officer at the education technology company 2U, and is the former deputy secretary of Education for the United States. Urquilla is deputy director at the Beeck Center for Social Impact + Innovation at Georgetown University, and a former senior policy adviser at the Obama White House. The Beeck Center’s publication, Smarter Government for Social Impact: A New Mindset for Better Outcomes, recommends strategies for transforming the public. The paper is available for download at: www.driveimpact.org/report/