This school year, the expiration of ESSER funding left districts across the country grappling with an urgent challenge: navigating shrinking budgets while maintaining their commitment to student success.
With some districts facing large deficits, difficult decisions are already underway about which programs to sustain and where to cut back. These financial pressures threaten to widen achievement gaps and limit access to vital resources.
In this critical moment, districts must fundamentally rethink how they allocate resources and measure their effectiveness. Outcomes-based contracting, or OBC, offers a transformative solution, tying funding directly to measurable results and ensuring that every dollar spent drives meaningful outcomes for students.
How outcomes-based contracting works
Outcomes-based contracting operates on a simple yet powerful principle: at least 40% of a provider’s payment is contingent upon achieving agreed-upon student outcomes. This model fosters accountability and collaboration between districts and providers, shifting the focus from inputs to tangible results.
By measuring process outcomes like improved attendance and consistent implementation of programs along the way, districts and providers can create the conditions necessary to achieve measurable academic success, ensuring that investments are directly tied to meaningful outcomes for students.
Duval County Public Schools exemplifies how OBC enables districts to navigate financial constraints while maintaining their commitment to students. During their first outcomes-based contract, Duval implemented an OBC for 8th-grade pre-algebra tutoring in spring 2023, initially serving 451 students and achieving 53% of its contracted outcomes. By the following school year, the district expanded the program to 1,250 students, exceeding 140% of its contracted outcomes by mid-year.
Confronted with a more than $98 million deficit in 2024, Duval grappled with challenging resource management decisions. Traditional contracting methods, which often pay providers regardless of results, would have compounded the challenge.
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When further budget reductions prevented Duval from renewing its larger contracts, the district pivoted to a smaller edtech-focused OBC. This strategic shift highlights OBC’s flexibility and Duval’s determination to align spending with measurable outcomes.
Even under financial pressure, the district demonstrated how OBC enables leaders to make targeted investments that deliver tangible benefits for students.
Ensuring measurable results
Beyond addressing immediate budget concerns, OBC provides a framework for long-term impact. Fresno Unified School District has embedded OBC into its broader resource management strategy, using the model to evaluate return on investment across various areas—not just instructional.
By examining which services deliver the most significant impact, Fresno ensures its spending directly supports student success while maintaining financial stability. This approach fosters enduring partnerships between districts and providers, emphasizing continuous improvement and shared accountability.
OBC also encourages districts to move away from a one-size-fits-all approach to resource allocation. Instead, districts can tailor investments to address specific student needs, such as targeted support for those who are below grade level.
This precision ensures that resources are directed where they can have the greatest impact, maximizing outcomes without spreading efforts too thin. In an era of tighter budgets, this strategic focus is not just practical—it is essential.
When funding is misaligned with outcomes, it’s not just money that is wasted—it’s time, opportunity, and trust. OBC offers a path forward by ensuring that investments deliver measurable results, empowering teachers with effective tools and restoring confidence in the education system’s ability to meet the needs of students
Sustainable framework for resilience and progress
The urgency for innovation in education funding has never been greater. More than a quick fix, OBC provides a sustainable framework for resilience and progress. By fostering long-term partnerships between districts and providers, OBC creates a culture of continuous improvement.
Providers, incentivized by the model, are motivated to innovate and deliver solutions that yield tangible results. This shared commitment to student success ensures that programs remain impactful and aligned with evolving needs.
District leaders must seize this opportunity to adopt models like OBC that prioritize outcomes and embed accountability into contracting processes. Policymakers can amplify this impact by advocating for state-level adoption of OBC, driving systemic change and equipping districts with the tools to thrive in an era of constrained resources.
Providers play a crucial role as well, partnering with districts to implement OBC effectively and demonstrating their dedication to meaningful results.
In a time of financial uncertainty, OBC is more than a solution—it is an opportunity to reimagine how resources are allocated and outcomes are achieved. Together, we can ensure that every dollar invested in education fulfills its ultimate purpose: helping students succeed.
