This multi-case study examines the Performance funding (PF) policies in four Midwestern states to explore how PF metrics and weights address racial diversity in higher education. Performance funding policies in Illinois, Kansas, Ohio, and Minnesota were examined using both document analysis and semi-structured interviews with state level actors closely attuned to the development of higher education policy in each state. This research addresses gaps in the literature concerning the development and use of state PF policy to incentivize racial diversity goals in higher education. This report provides recommendations for how policymakers can reflect on the ways indicators can be used to move past symbolic efforts to address diversity in higher education, particularly to increase the participation and retention of underrepresented students of color. Additionally, there are recommendations for future studies on bridging the communication gap between state policymakers and institutional leaders about diversity goals.