Got Results? Leverage Outcomes With New Financing Models!

January 9, 2014

Homelessness post

Learn how to use Outcomes Finance to get beyond the pilot stage of your program and use tools like Social Impact Bonds to help you make a bigger impact.

We have good news and better news.

The good news is that it’s an exciting time to be a social sector organization with innovative ideas and programs that get results. Emerging tools like social impact bonds that tie funding to projected results are making it possible for organizations to secure financing that might not be available any other way.

The even better news is that Innoweave has teamed up with the MaRS Centre for Impact Investing to develop an in-depth and user-friendly module to help you to understand how to make Outcomes Finance work for you.

We’ll be hosting our first Outcomes Finance workshop on January 11th with Finance for Good, a social impact bond intermediary that works with public sector organizations and governments to facilitate results-oriented financing (and therefore greater social innovation and impact) in Halifax.

Lars Boggild, Program Development Officer at Finance for Good, will be leading the workshop. He says, “The thing that’s really exciting for the organizations who’ll be taking this workshop is that because of the way it’s structured, they’ll actually spend their time working through a fairly detailed plan of how they would use outcomes financing to get money for their programs instead of just working off of generic case studies in the field. This then becomes a really concrete tool they can actually use right away as they pursue outcomes financing.”

Never heard of Outcomes Finance before? You’re not alone!

Outcomes Finance is a relatively new form of funding in Canada. In fact, this form of results-based financing was pioneered in the UK as recently as 2010. It has captured the imagination of government funders and politicians eager to prove the soundness of their decision-making, as well as social innovators who have excellent preventive social programs but seldom get funding because money is predominantly being spent on remedial programs.

Let’s take a concrete example: Homelessness

In this example, two programs compete for an already overstretched government purse: social housing (preventive program) and homeless shelters (remedial program).

A government which is already struggling to finance homeless shelters may not feel able to fund social housing even if they know it will eventually break the cyclical problem of homelessness.

Outcomes Financing can help create the infrastructure for a social organization to accurately predict its results, help the government funder to put in measurement criteria and then use specific financial instruments (like Social Impact Bonds, etc) to bring in money from private investors to fund the program.

It shifts the paradigm from  “the government only has $100, is already spending $90 on homeless shelters and can’t afford to reallocate a single dollar to prevention,” to that same government now being able to raise an EXTRA $100 (from private investors) to put exclusively towards social housing.

This creates a positive spiral: the social housing can drive cost savings across government (in healthcare, the justice system, and emergency sheltering), allowing for the flexibility to invest in more preventative programming. Everybody wins!

So how can Outcomes Finance work for your organization?

Participants in an Outcomes Finance workshop will benefit from the following insights:

  • How a shift towards the financing of positive social outcomes can enable programmatic innovation and collaboration within the social sector.

  • Deeper knowledge of the risks and benefits of financial tools like Social Impact Bonds (among others), followed by an in-depth discussion of the strategic alignment of these tools to their organizational needs.

  • How to scope their broad domain of interest to specific sub-populations where there is greater opportunity for impact.

  • Recognizing key criteria to prioritize their ideas, and working with the concerns and incentives of other partners within multi-stakeholder mechanisms such as Social Impact Bonds.

  • How measurement tools can be employed in the tracking and evaluation of outcomes, and what different options exist for developing credible evidence.

  • Participants will be able to develop a clear plan forward, with outstanding needs identified and a draft “workplan” to see how implementation could occur.

And here’s an added bonus:

After taking Innoweave’s Outcomes Finance workshop, organizations are invited to submit a proposal for an Implementation Grant to get step-by-step expert coaching to actually use the knowledge gained in the workshop. The next round of grants will open in Spring 2014.

We’re in the process of developing a calendar of workshops for 2014, so if you’d like to host an Outcomes Finance workshop in your area, send us an email. In the meantime, you can get a more in-depth idea of how it all works by checking out the Social Impact Bond Technical Guide for Service Providers, created by the MaRS Centre for Impact Investing, or viewing our Introduction to Outcomes Finance webinar on this page.

ABOUT THE MARS CENTRE FOR IMPACT INVESTING: The Centre for Impact Investing is a social finance hub and project incubator that acts as a neutral collaboration space for all sectors – government, community and private—to strengthen our collective ability to mobilize private capital for public good.

ABOUT FINANCE FOR GOOD: Finance for Good builds the tools, processes, and partnerships necessary to bring Social Impact Bonds (SIBs) to Canada. At Finance for Good, we help non-profits, government, and investors overcome the hurdles that have limited SIB development in the past, such as issues selection, intervention design, and impact valuation. We bring SIBs to Canada through our three-step collaborative process, as described below:

  • Design: Define specific challenge to be addressed by the social impact bond supported intervention (pay-for-success partnership) and select change model most appropriate to achieve desired outcomes
  • Structure: Create financial and legal vehicles required to raise capital and build operational team to administer program
  • Implement: Coordinate effort of service providers and rigorously track results”