| Summary: | Performance funding is a common strategy used among state governments to appropriate higher education funding. Performance funding traditionally allocates a portion of state appropriations based on an institution’s ability to meet performance metrics. The metrics used to determine funding signal the factors that are important to the state and strongly encourage institutions to align their practices with the state incentivized outcomes. By setting metrics, state governments seek to encourage institutions to change institutional policies to meet the stated metrics to earn funding. Although the intention behind performance funding is centered on student success and improving student outcomes, there can be unintended consequences that can have a negative influence on some student populations. In fact, available research indicates that performance funding metrics are generally ineffective in changing outcomes and have unintentional negative outcomes for historically excluded students. By introducing critical race theory to the performance funding analysis, it provides policy makers and the higher education community a different lens to consider the negative outcomes from a systemic level.
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