Money for Moneyball Government

While the headlines about the president’s new budget focus on the big numbers, there is a significant back story about what the Office of Management and Budget says is the expanded use of “evidence and rigorous evaluation to improve policy outcomes”  when it comes to the details of the budget.

The president’s budget proposal includes billions in investments in pilot and demonstration programs, outcome-focused grant reforms, and creating new strategies that only pay for approaches that work.  There are a range of existing programs that are receiving increased funding “on the basis for strong evidence,” according to OMB.

Building Evidence About What Works.  The FY 2015 budget recommends a number of investments in testing new approaches to identify the “most promising strategies that warrant expansion” in the future if they can show they are effective.  These include:

• Launching a number of pilot programs, such as new authority and funding to the Social Security Administration to test various early intervention strategies that could help disabled people remain in the workforce rather than be dependent on long-term disability payments.  Other pilots include the pooling of discretionary funds from multiple agencies to serve disconnected youth.

• Supporting outcome-focused grant reform, such as the use of three-tiered grants, where grantees receive more funding when they “have proven evidence of how their proposed approach delivers impact.”  The budget triples funding for these kinds of programs, relative to 2010, to $680 million.  These include the Department of Education’s Investing in Innovation (i3) program, the Department of Labor’s Workforce Innovation Fund, and the Corporation for National and Community Service’s Social Innovation Fund.

• Advancing the use of “pay for success” models, which embed accountability for results directly into the programs’ design. Using this model, non-profits, foundations, and private investors provide upfront funding for preventive services and the government does not pay unless there are demonstrated results.  The budget provides $682 million for various pay-for-success efforts in the areas of job training, criminal justice, and housing.  This also includes a pay-for-success incentive fund that would help states and localities to implement this approach in order to generate savings for federal grant programs they administer.

• Investing in improving data collection to improve decision-making.  These are relatively small, but significant, investments in Census, education, and workforce surveys to better track outcomes of various initiatives.  The budget also recommends helping nonprofits “better evaluate their impact and performance by accessing Federal and State administrative data.”

Using Evidence to Get Better Results.  In addition to developing more evidence about what works, OMB identifies examples of where “the Budget proposes to invest in, scale up, or change on the basis of strong evidence.”  Examples include initiatives to:

• End homelessness.  According to OMB, a broad body of evaluation research demonstrates that “permanent supportive housing is more effective at reducing chronic homelessness than traditional approaches, such as transitional housing.”  By investing in this approach, veterans’ homelessness is down 24 percent since 2009, so the budget proposes $75 million to assist an additional 10,000 homeless veterans.

• Improve youth outcomes.  The budget proposes investing billions over the next decade to extend maternal and child home visiting programs by nurses and social workers because evidence shows that “these programs improve a broad range of outcomes, including school readiness, prevention of child maltreatment, maternal health, parenting, and family economic self-sufficiency.”

• Strengthen employment strategies.  The budget proposes a number of different approaches to getting people back to work, including redirecting $602 million in annual welfare payments to support state-run partnerships with employers to subsidize jobs for low-income parents in order to get them back into the workforce.

• Support evidence-based international aid.  The budget proposed increasing the funding of the Millennium Challenge Corporation by $102 million – more than 10 percent – because it has clearly demonstrated success in the economic development programs it sponsors in countries where it sponsors high-return compact investments in long term projects. For example, its literacy programs in Morocco helped nearly 40,000 fishermen, artisans, and farmer to read, write, and build business skills.

Cumulatively, these efforts build on initiatives that have evolved in a bipartisan fashion over the past 5-7 years at the federal level, and that are being developed at the state and local levels as well.  They enjoy support from the foundation community, nonprofits, and academic sectors, as well.  So while there are headlines about clashes over top-line spending priorities, there seems to be a quiet consensus about doing what works – which some call Moneyball for Government.