Is an outcomes-based approach or impact bond right for me?

6 December 2021

As specialists in the design and implementation of outcomes-based contracts, Social Finance is often asked how to decide whether to use an outcomes-based approach for a particular intervention or issue area.

In this guide, we outline four dealbreaker questions that can help service providers, donors, governments, and philanthropists to identify whether outcomes-based contracts are appropriate for the social challenge they wish to address.

The questions are:

1. Do all stakeholders agree on the social problem and a definition of success?
2. Is there a clear rationale for using an outcomes-based approach?
3. Is there enough uncertainty to make an outcomes-based approach a good fit?
4. Will it be possible to pre-finance service delivery with private capital?

The report includes some examples of outcomes-based approaches in practice from our work in Latin America.

You can also read a web-based version of this guide.


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