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The Outcomes Finance Alliance

Outcomes Finance Alliance
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Outcomes Accelerator
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Institutional engagement and mainstreaming in OBF
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Knowledge and Learning Network
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About the Outcomes Finance Alliance

The Outcomes Finance Alliance (OFA), formerly known as the Impact Bonds Working Group (IBWG), is a global forum for organizations interested in enhancing development impact through outcomes-based financing (OBF).

The OFA is led by donors (SECO, FCDO and the UBS Optimus Foundation), and underpinned by industry-wide collaboration, including research institutions, investors, service delivery organizations, specialized market support providers, advisory firms, and evaluators; with Levoca serving as the technical secretariat.

Since 2018, OFA members have met regularly and worked collaboratively to identify and address the main barriers to mainstream OBF approaches and move the OBF market toward maturity. As a result, OFA members have identified and worked on joint initiatives that support the growth of the market.

One such initiative was the launching of the Outcomes Accelerator in 2022, which currently provides design funding and support to launch early stage OBF projects; another critical current initiative is joint work with the OECD to establish internationally recognized guidance on OBF.



The Outcomes Finance Alliance Objectives

To design and test strategies to make pay-for-success financing instruments a cost-effective and scalable proposition to support development agencies and governments to deliver on the UN Sustainable Development Goals.

The Outcomes Finance Alliance Community

The OFA is an outcome-funder-led initiative that is underpinned by industry-wide collaboration. The (OFA) engages with a wide pool of participants from the impact bond ecosystem, including donors, governments, investors, service providers, technical advisors, evaluators and academics.

Objectives

The objective of the Impact Bonds Working Group (“the Working Group”) is to design a strategy that will help members use impact bonds and related pay-for-success instruments effectively at scale and contribute to launching quality development projects.

The Working Group will contribute to realization of the Paris Declaration on Aid Effectiveness, 2030 Agenda for Sustainable Development through the Sustainable Development Goals, and other relevant international agreements and declarations.

The Working Group will achieve these objectives through the following activities and workstreams:

1

Identifying barriers and solutions to using impact bonds and related pay-for-success instruments effectively at scale, in interactive, all-member workshops, where members work collaboratively with other bilateral government donors, multilateral agencies (development banks, UN agencies) and others to identify barriers and solutions;

2

Developing and testing strategy options identified collaboratively in the workshops: identifying costs and benefits, and recommending a preferred strategy that addresses the challenge of effective and efficient commissioning, and helps grow the market for impact bonds and similar instruments;

3

Commissioning research, sharing knowledge, experiences and lessons learned, including the systematization and dissemination of good practices and successful experiences with innovative instruments in the area of results- based financing (e.g. impact bonds, social success notes, pay-for-success contracts with alternative financing arrangements); and

4

Communicating progress and upcoming steps to the wider market at selected milestones Identifying potential areas for collaboration, where members or groups of members that have common aims may consider working together towards the launch of a joint initiative designed to overcome key barriers and move to scale.

Activities

Identifying barriers and solutions to scale

Community building through workshops and conferences

Developing and testing strategy options

Commissioning research and knowledge sharing

Identifying potential areas for collaboration

Communicating progress to the market

The Outcomes Finance Alliance Recommendations

The (OFA) members have identified five concrete areas and initiatives to accelerate the market’s capacity to deploy outcomes funding cost-effectively and at scale. These initiatives will serve as a catalyst to move the outcomes-based finance market toward maturity by targeting the most serious barriers to scale. The (OFA) members have worked diligently to advance all five areas that were recommended into concrete actions and initiatives. The Outcomes Accelerator is actively driving the implementation of these initiatives, shaping its mission and purpose.

Outcomes Accelerator
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Centre of Excellence & Knowledge-Sharing Platform
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Impact Bond Investment Fund
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Middle-Income Country Outcomes Funds
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Thematically-Focused Demonstration Outcomes Funds
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Sub Groups

The first meeting of the IBWG was hosted by the Ministry of Foreign Affairs of Belgium in Brussels on May 15-17, 2018. This meeting convened representatives from 23 development organizations. During the meeting, Members deepened their collective understanding of core barriers and challenges facing Impact Bonds, and prioritized preliminary strategy options. These strategy options will be further explored and defined in sub-groups with the task of developing detailed prototype strategies before the next IBWG meeting. The sub-groups and strategy areas established by the Working Group Members for further development following the first workshop were:

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OFA Governing Committee:

OFA Secretariat: