Impact-Linked Finance

Impact-Linked Finance

There is a strong need for effective impact finance innovations to close the enormous funding gap for achieving the SDGs. Together with BCG, we are designing and accelerating the concept of Impact-Linked Finance solutions.

 

 It’s a tool for positively incentivizing private sector investment in social impact work with financial rewards.

Design & Features

Our solution SOCIAL IMPACT INCENTIVES (SIINC) is one of the already existing Impact-Linked Finance instruments in the market. The features that define and differentiate these instruments are:

Market-based organizations

They address enterprises and organizations that have a revenue stream (i.e., paying customers) and follow market principles.

Direct link to financial rewards

These instruments direct financial rewards to the primary value creator (i.e., to the social enterprise as opposed to the investors as in most pay-for-success schemes).

Based on outcomes

Impact-Linked Finance instruments are based on creating outcomes – not outputs – and measuring them wherever feasible, useful, and economically viable as triggers for determining the level of financial rewards.

Focus on additionality

The financial rewards in these instruments should empower the organizations to deliver additional outcomes that would not have happened without the incentives.

 

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Listen to our Online Roundtable

In May 2019, we held the first online roundtable on Impact-Linked Finance with experts from Boston Consulting Group, Swiss Agency for Development and Cooperation, Stawi Africa and Beneficial Returns. Listen to the inspiring and creative thoughts around the subject.

More food for thought

If you would like to stay tuned about Impact-Linked Finance, feel free to register here, check out our SIINC case studies or read the latest publications on this and related subjects.