Driving Better Outcomes: Fiscal Year 2019 State Status & Typology Update

The 2015 report “Driving Better Outcomes: Typology and Principles to Inform Outcomes-Based Funding Models,” released by HCM Strategists, established a comprehensive typology of outcomes-based funding (OBF) models and a state-by-state classification of funding systems according to the typology.

Updates to the report in 2016 and 2018 provided an enhanced typology informed by continued engagement with state policymakers and promising practices, a state-by-state assessment of components and funding distributions, a detailed breakdown of overall funding by sector for five states with advanced OBF models in place, and an examination of OBF policies by sector.

This report updates this information for OBF policies being implemented in FY 2019. Changes in state funding systems are highlighted, including an overview of OBF models being implemented and states where OBF models have been developed or initiatives are underway. This report also includes additional information about formula metrics, including metrics meant to provide incentives for underrepresented students to succeed.

Considerations For OBF Typology

The classification system outlined below is used to assign each sector’s FY 2019 OBF model a “type” according
to its level of sophistication and adherence to promising practices. The following critical areas have been
identified and are included in the typology:

• Established completion or attainment goals are linked to the model;
• Recurring base funding is distributed;
• A significant level of funding is distributed;
• Total degree/credential completion is prioritized;
• Institution mission is reflected through varying weights, scales or metrics;
• The funding structure is formula-driven to ensure incentives for continuous improvement;
• Success of underrepresented students is prioritized; and
• Funding is sustained over consecutive years.