Beyond Compliance 2024

Beyond Compliance: Embedding Impact through Innovative Finance32Name Description  Outcomes fund A funding mechanism that enables multiple outcome-based contracts to operate in a portfolio, developed and supported concurrently or in succession for cohesive impact. Output-based aid A mechanism where subsidies are provided to service providers or recipients only after achieving specific, measurable outputs or outcomes. Typically used in development projects with the aim of increasing access to essential services. Pay for Success A group of outcome-based financing tools that allocate resources toward measurable outcomes, focusing on funding that works to improve lives and drive social impact. Payment by results A payment structure where financial disbursements are made only after the achievement of predefined results, rather than providing upfront funding for activities. Performance debt buy-down A model where a third party reduces or buys down part of a loan between a government and a lender, contingent on achieving predefined social or environmental outcomes. Performance-based contract A contractual relationship where a public service provider (e.g. school) receives payment only if specific performance outcomes are achieved. Performance-based grant A funding model where non-state service providers are paid upon achieving predefined results, encouraging measurable impact in service delivery. Performance-based loan A loan model typically provided by a development bank, where loan disbursements are contingent on meeting specified results, creating accountability for social or environmental impacts. Performance-based transfer/grant An intragovernmental fiscal transfer or grant where funding is tied to achieving specific, measurable outcomes, promoting accountability within government bodies. Prize-based challenge A competitive funding mechanism that awards a prize to the best innovation or solution developed within a specified timeframe to solve a social or environmental challenge. Public-private partnership A collaborative arrangement between a government entity and a private sector organization to provide public services or infrastructure. The partnership typically involves sharing risks and rewards between the public and private sectors. Results-based aid A funding model where resources from a multilateral agency or foreign government are allocated to a government based on the achievement of predefined results. Results-based finance A broad term covering any programme that provides rewards upon credible, independent verification of achieved results, commonly used in development finance. Social impact bond A contractual arrangement involving upfront funding from a third party to achieve social or environmental outcomes, with repayment contingent on meeting those outcomes. Known as Pay for Success in the USA and Social Benefit Bond in Australia. Also commonly shortened to impact bond.