Redefining Value From Outcome Based Funding to Tradeable Impact 2025

CASE STUDY 1 Enabling growth through Social Progress Credits Over the past decade, South Korea’s Social Progress Credit (SPC) programme has demonstrated that monetized social impact can serve as a credible and effective basis for financial rewards. Launched in 2015 by SK Group in collaboration with the Center for Social Value Enhancement Studies (CSES), the SPC programme has engaged more than 400 social enterprises, generating over $360 million in verified social value and disbursing over $52 million in cash incentives. More than a funding mechanism, the SPC programme has played a transformative role in South Korea’s impact ecosystem. By linking financial incentives to measurable outcomes, the programme has enabled participating social enterprises to enhance their economic sustainability, refine their business models and improve their credibility with funders and stakeholders. Empirical evidence from the SPC programme shows that outcome-based incentives lead not only to enhanced impact performance but also to increased access to capital, higher growth rates and greater public trust. The ultimate vision of SPC reaches beyond incentive provision. From the outset, the programme aimed to establish the conditions needed to facilitate a market of tradeable social outcomes, mirroring the evolution of environmental credit markets. The programme’s methodology for quantifying and verifying social performance has provided the essential building blocks – standardization, valuation and accountability – needed to catalyse such a system. Source: Shin, H., Imm, G., Jeong, M. E., Kim, H. J. & Kim, H. (2024). Korea’s experiment with pay-for-success. Stanford Social Innovation Review, vol. 22, no. 4. Image credit: JUMPPhilanthropy has played a crucial role in funding social impact efforts, yet it remains inherently constrained in scale and sustainability. While accurate data on the size of philanthropy does not exist globally, it is clear that it only represents a fragment of global financial transactions in the corporate sector, financial markets or the public sectors. In addition, philanthropy tends to be volatile, demonstrated by a 2.1% decline in US charitable giving in 2023.10 Additionally, 45% of philanthropic organizations express concerns about their long-term financial sustainability,11 indicating that reliance on philanthropy alone is not a viable long-term solution. Moreover, philanthropic funding is often focused on short-term projects rather than systemic solutions, leading to fragmented efforts that fail to unlock meaningful, lasting change. Social entrepreneurs have demonstrated immense potential in addressing social issues by harnessing market-based solutions. Balancing social missions with financial sustainability remains a challenge, however. A significant portion of social enterprises struggle to secure initial funding12 and 65% perceive that their social impact is undervalued in traditional markets.13 This lack of financial recognition limits their ability to scale impactful solutions effectively. By creating a structured market for social impact, a tradeable impact framework could provide the financial incentives required to drive sustainable growth and systemic change.1.3 Philanthropy : a limited resource 1.4 The need to support social entrepreneurs Redefining Value: From Outcome-Based Funding to Tradeable Impact 8