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:
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.
Would you like to read more?
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.