UN FfD4 Multistakeholder Hearing Side Event on Outcomes-Based Financing

On October 29, 2024, the OECD and the Outcomes Finance Alliance (OFA) Secretariat convened a side event at the UN Secretariat in New York as part of the Multi stakeholder Hearing in the lead up to the Fourth International Conference on Financing for Development (FfD4). Facilitated by the OFA Secretariat (Levoca LLC), which represents over 100 organizations in the outcomes based financing (OBF) ecosystem, this hybrid event showcased prospectives on using OBF for SDG impact from local implementers, government representatives, impact investors, and knowledge partners. A key takeaway from the discussion was that while the increasing volume of financing required to achieve the Sustainable Development Goals (SDGs) remains important, FfD4 presents a critical opportunity to emphasize the quality of financing for SDG impact —an area where outcomes finance can play a pivotal role.

The event featured an opening presentation by the OECD to set the stage on how OBF is aligned with international commitments on development effectiveness and can help governments enhance the impact of public financing for the SDGs. The OECD also introduced a new joint initiative with the Outcomes Finance Alliance to develop internationally recognized guidance on OBF to be used by governments, multi-lateral development banks, donors, and the private sector – with the FfD4 as a key platform for shaping this guidance.

An interactive panel discussion included perspectives from Fundación Corona, Oxford University’s Government Outcomes Lab, UBS Optimus Foundation, and Village Enterprise. Panelists shared how OBF has helped amplify impact and transform how outcomes are delivered within diverse sectors—ranging from poverty alleviation to education and jobs. A key theme from the discussion focused on how local governments can amplify the impact of limited funding by paying for results instead of actions. One implementer noted OBF practices have also helped increased program sustainability through new sources of funding and new partnerships. Panelists also explored how OBF can incorporate civil society’s role and enhance program participants’ voices. Additionally, OBF offers a robust mechanism for impact investors to improve the quality of finance mobilization efforts.

Facilitated by the OFA Secretariat, the session concluded with an open discussion. Several key points emerged from the dialogue that underscore the opportunity to use OBF to enhance the SDG impact of financing: (1) the importance of thoughtful, rigorous design balanced with a pragmatic approach to measurement and outcome verification; (2) the experiences of governments and donors that are shifting from pilots to scaling OBF a standardized practice; and (3) that successful institutionalization efforts should focus on the sustainable, long-term changes that outcomes finance can foster within organizations and broader development ecosystems.

Through these collective insights, the event highlighted OBF as an important mechanism for effective SDG financing and reinforced the call for an approach that considers both the quality and quantity of development financing.

The Governing Committee of the Outcomes Finance Alliance is comprised of its funders, the State Secretariat for Economic Affairs (SECO), the UBS Optimus Foundation and the Foreign, Commonwealth and Development Office of the UK (FCDO), who are supported by Levoca LLC as the Secretariat.