As specialists in the design and implementation of outcomes-based contracts, Social Finance is often asked how to decide whether to use an outcomes-based approach for a particular intervention or issue area.
In this guide, we outline four dealbreaker questions that can help service providers, donors, governments, and philanthropists to identify whether outcomes-based contracts are appropriate for the social challenge they wish to address.
The questions are:
1. Do all stakeholders agree on the social problem and a definition of success?
2. Is there a clear rationale for using an outcomes-based approach?
3. Is there enough uncertainty to make an outcomes-based approach a good fit?
4. Will it be possible to pre-finance service delivery with private capital?
The report includes some examples of outcomes-based approaches in practice from our work in Latin America.
You can also read a web-based version of this guide.