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Performance Based Contracting

2000 Winner
State of Illinois

Award Sponsor
Innovations in American Government Awards

In 1996, Illinois had 17.3 children per thousand in its child welfare system, an enormous number compared with a national median of 6.7 and a national mean of 7.1. Very few of these children were ultimately adopted, or reunited with their parents. Once they entered into the Illinois foster-care system, most children remained there. Why? In 1997, the Illinois Department of Children and Family Services (DCFS) boldly answered this pressing question by overhauling its funding contracts for placement service agencies. The current system of funding adoption placement agencies was on a 'fee per child' approach where money was given according to the number of children in the program's caseload. The more children that an agency had in foster care, the more DCFS paid it. Thus, the agencies had little motivation to reunite children with their families, or to move them to adoption. Recognizing this severe financial disincentive to placement, lead DCFS to develop Performance Based Contracting.

This new approach to funding child placement programs has focused on two problems embedded in the old system: dearth of permanent placements and overloading of caseworkers. Instead of prioritizing rapid placement of children into safe, loving homes, there was a culture of prolonged foster care time, ensuring that funds would continue to flow into the agency. In addition, the staffs of these agencies were over-burdened by cases that their programs took on for the funding benefit. Caseworkers were unable to give each child adequate time and energy, which exacerbated the problem of extended foster care stays. Shifting the focus of these agencies was as simple as DCFS restructuring the incentive program.

Since the implementation of Performance Based Contracting, the increase of children moving to permanency has been nothing less than stunning. The impact on Illinois' caseload is very telling: a decline from 51,000 children in care to just 30,000 since the program began three years ago. In 1999, more children were moved to adoption than in the combined seven-year period of 1987 through 1994. Prior to the introduction of Performance Based Contracting, Cook County's average permanency rate for agencies was just 6.7 percent, but by the end of state fiscal year 1998, the average jumped to nearly 20 percent. Caseworkers across Illinois manage an average of 22 children, rather than 25 at a time before Performance Based Contracting.

In an attempt to make the child welfare system more holistic in its approach to family services, Performance Based Contracting has also initiated funding for counseling and therapy for clients. Families, children, foster, and adoption parents as well as other relatives who may take on guardianship responsibilities, are eligible for this emotional care both during and after the placement process a new and innovative service for DCFS clients.

By reorienting the funding incentives of placement agencies, DCFS has ensured that the priority of these agencies is squarely on permanent placement of children. Children who have experienced trauma, abuse, neglect or tragedy need stable, loving homes with responsible adults who will care for them. The transient nature of foster care is not conducive to healing and growth, so DCFS has successfully placed a premium on short foster care stays. Thousands of children have been given a chance to thrive in a positive, healthy environment as a result of Performance Based Contracting.

Contact Information
Performance Based
Project Manager
Illinois Department
of Children and
Family Services
James R. Thompson
100 W Randolph St.,
Ste 6-100
Chicago, IL 60601
Phone: (312)

Performance Based Contracting: Finalist Presentation

Illinois' Performance Based Contracting, an Innovations in American Government Finalist, presented before the National Selection Committee in 2000.


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