As a resource-distribution strategy, performance-based funding can incentivize education providers to produce above-average results. Many states are currently using performance-based funding, drawing the attention of both federal and state policymakers.
This paper from RTI International describes how performance-based funding systems can be incorporated into state education resources distribution formulas to allocate funding among local providers. It includes a seven-step process to build stakeholder support for system adoption, drawing on lessons learned from RTI's work with state and local program administrators. Topics covered include establishing state commitment, defining outcomes measures, identifying data sources and more.