Driven by economic and educational imperatives, public policymakers, higher education leaders, and philanthropic and advocacy groups are mobilizing aggressive national and state campaigns to bolster college completion. Campaigns to improve student success are particularly concerned about the performance of the nation's community colleges. In response to this challenge, state governments are testing the power of several policy levers to change individual and institutional behaviors in ways that increase and accelerate college completion. One of these is the formula used to allocate public funding to institutions. This brief presents a set of Jobs for the Future-produced tools that can help states design performance-based funding systems that can influence student and institutional behavior, avoid unintended consequences, and withstand shifts in political and economic climates. These "Performance Funding 2.0" tools are based primarily on the experience of states participating in Achieving the Dream and the Developmental Education Initiative that have moved toward a new performance funding model in recent years. Contents of this publication include: (1) Reflections on Ohio's New Performance-Based Funding System: Defusing a Ticking Time Bomb (Eric Fingerhut); (2) Design Principles for an Effective Performance-Based Funding System (Richard Kazis); and (3) Characteristics of Performance-Based Funding Systems for Community Colleges in Eleven Achieving the Dream States. (Contains 13 endnotes.) [For "Tying Funding to Community College Outcomes: Models, Tools, and Recommendations for States. Executive Summary," see ED537257.]