Epilogue

The epilogue discusses recent developments in arts funding and philanthropy. The divergent paths of Rockefeller and Ford—where the former discontinued its arts program and the latter rebranded its cultural work in terms of addressing “inequality”—is a revealing outcome of the increasing social and economic legitimation of arts funding. The National Endowment for the Arts (NEA) experienced its first budget cut under President Reagan and then, amidst the culture wars, Congress slashed its budget further. Private contributions have increasingly taken up the slack, but not without their own challenges. New philanthropists are exploring limited liability corporations, donor-advised funds, and metrics and outcomes-based funding. With increasing economic and political inequality and decreasing civic engagement, the government funds foregone because of tax-deductible charitable contributions might be re-evaluated, as well as the ways the federal government may be better suited to provide resources more equitably. An ethics of expertise is now more critical.

Introduction: outcome-based payment and the reform of public services

This book examines outcomes-based commissioning as an important element of the public service reform agenda, focusing on Payment by Results (PbR) and Social Impact Bonds (SIBs) in the UK (also known as Pay for Success (PFS) or outcomes-based funding and Pay for Success financing in the US, respectively). It considers whether PbR/PFS and SIBs/Pay for Success financing drive efficiency and innovation in the delivery of social outcomes, and whether attempts to reconcile corporate profits and social goods may lead to perverse incentives and inefficiency. It also analyses the impact of PbR and SIBs on not-for-profit and smaller players in the market for social outcomes. This introduction provides an overview of outcomes-based commissioning, the distinction between PbR/PFS and SIBs/Pay for Success financing, some key questions raised by outcomes-based commissioning, and the chapters that follow.

Payment by Results and Social Impact Bonds

Over recent years there has been increasing interest in ‘Payment by Results’ (PbR) — Pay for Success (PFS) or outcomes-based funding in the US — as a model for outcomes-based commissioning in the public sector. Social Impact Bonds (SIBs) — Pay for Success financing in the US — are a class of PbR where the finance needed to make the contract work is provided by private finance, rather than the service provider. This short book asks whether and under what circumstances PbR/PFS and SIBs/PSBs are an efficient way to unlock new capital investment and advance social goods. It considers whether PbR/PFS and SIBs/Pay for Success financing drive efficiency and innovation in the delivery of social outcomes, and whether attempts to reconcile corporate profits and social goods may lead to perverse incentives and inefficiency. It also analyses the impact of PbR and SIBs on not-for-profit and smaller players in the market for social outcomes.