Questions of college performance in the United States are inevitably answered in terms of numbers rather than performance. A Tennessee policy links two percent of state funding to outcomes rather than size. The policy has major implications for funding and performance in colleges and other service-oriented institutions. (Author/MLW)

The use of performance funding, which provides institutions with income for educational results, was tested in Tennessee. Traditionally, the budget has been separated from performance evaluation, and state formulas have evolved from the need for funding to be objective, comparable, and predictable. The Performance Funding Project in Tennessee,…