Private Sector Engagement Initiative Toolkit

Results-based
financing module

Produced by the New Business Team

at World Vision Australia
October 2019
World Vision Australia Results-based financing module

Acknowledgements
This Toolkit was funded by World Vision International’s Global Resource Development Innovation Fund through the Private
Sector Engagement Initiative. It would not have been possible without the contributions and expertise of a number of
our World Vision colleagues. We would like to thank the following people (in alphabetical order): Marine Adamyan, Tim
Andrews, Gustavo Cavero, Ian DeVilliers, Keith Dokho, Rajkumar Dulal, Deb Ingersoll, John (JJ) Ivaska, Therese Johnson,
Rachel Kettle, Anjalie Page, Emma Pankhurst, Alyssa Pizarro, Isaac Rich, Robyn Robertson, Lindsey Ruffolo, Judy Samuels,
Jasim Sheikh, Tim Tempany, Rachel Vethanayagam and Mike Wisehart.

We would also like to thank the following World Vision National Offices that have been a part of the Public Sector
Engagement Initiative over the past two years, working to set up innovative projects involving the private sector and
sharing their lessons learned with us: Bangladesh, Myanmar, Nepal, Pacific Timor-Leste, Rwanda and Sri Lanka.

Cover: Wine Su, aged 10, attends a World

Vision-supported children’s centre in Myanmar.
Photo: Khaing Min Htoo/World Vision

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Table of contents
Glossary 04 5.4 Exploring a potential social impact bond/
development impact bond 022
Quick guide to results-based financing 05 5.5 Creating a social impact bond/development
impact bond 023
1.0 What to expect from this module 07
Step 1: Explore prospective outcome
payers 023
2.0 Introduction to the Private Sector
Engagement Initiative Toolkit 08 Step 2: Build a consortium of
relevant partners 023
2.1 World Vision Australia’s Private Sector
Engagement Initiative 08 Step 3: Design the social impact bond/
development impact bond and outline
2.2 What is this toolkit for? 08 a high-level agreement 024
2.3 What is private sector engagement Step 4: Conduct legal due diligence 027
and why is it important? 09
Step 5: Sign social impact bond/development
2.4 What can I expect from this toolkit? 09 impact bond agreement and sensitise
stakeholders 028
3.0 Overview of results-based financing module 010
Step 6: Implement and monitor a social
4.0 Performance-based contracts 011 impact bond/development impact bond 028

4.1 What is a performance-based contract? 011 5.6 Risks of social impact bonds/development
4.2 How a performance-based contract works 011 impact bonds 029
4.3 When (and when not) to use a 5.7 Lessons from past social impact bond/
performance-based contract 012 development impact bond practitioners 031
4.4 Developing a performance-based contract 014 Case study: Myanmar Clean Cookstove DIB 032
4.5 Risks of a performance-based contract 015 5.8 Conclusion 033
4.6 Lessons from past performance-based
Appendix A: Results-based financing instruments 034
contracts 017
4.7 Conclusion 017 Appendix B: KITAB case study 036

5.0 Social impact bonds and development Instalment 1: A potential results-based

impact bonds 018 financing solution 037
Instalment 2: The project design 038
5.1 What is a social impact bond/development
impact bond? 018 Instalment 3: Challenges and lessons 041
5.2 How a social impact bond/development
impact bond works 019 Appendix C: Recommended resources 043

Case study: Quality Education India Social impact bond/development impact bond
development impact bond 020 sector resources, portal and communities 043

5.3 When (and when not) to use a social

impact bond/development impact bond 021

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Glossary
Development impact bond (DIB): an agreement where private investors provide upfront funding for a program that
achieves specific social outcomes and are remunerated by an outcome payer, such as a foundation or a development agency
at a commercial rate of return if evidence shows that the intended outcomes were achieved. DIBs are a type of RBF.

Independent validator: an independent organisation that verifies the achievement of specific targets or outcomes.

Intermediary: an organisation that oversees and coordinates the implementation of a social impact bond or development
impact bond.

Outcome payer: an organisation that issues a payment upon successful achievement of the project targets.

Performance-based contract (PBC): project agreements that tie at least a portion of the implementer’s payment to the
achievement of specific targets. PBCs are a type of RBF.

Results-based financing (RBF): an approach where funders pay implementers upon the successful achievement of an
agreed target or outcome. There are many types of RBF.

Social impact bond (SIB): an agreement where private investors provide upfront funding for a program that achieves
specific social outcomes and are remunerated by a government at a commercial rate of return if evidence shows that the
intended outcomes were achieved. SIBs are a type of RBF.

Social service provider: an organisation that implements the intervention in a SIB or DIB.

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Quick guide to results-based financing

Results-based financing (RBF) is What’s in it for you?
an approach where funders pay A growing number of donors are using PBCs because
it allows them to pay for successful results instead of
implementers upon the successful ineffective programs. World Vision will need to adapt
achievement of an agreed target or to this new approach. By shifting the financial risk to
outcome. While there are various implementing organisations, donors may also be more
willing to support innovative programs without risking their
forms of RBF, this guide will focus on budgets if programs fail. While PBCs tighten control over
two approaches: performance-based results, they place less scrutiny on project activities. They
contracts (PBCs) and social impact give implementers such as World Vision more flexibility
and freedom to pursue a range of strategies.
bonds (SIBs)/development impact
bonds (DIBs). How to apply it?
It is difficult to provide a definitive process for establishing a
PBC, but they often appear in the following three scenarios.
Performance-based contracts (PBC)
Call for proposal:
What is it?
Some donors use PBCs as part of their usual grant process
PBCs are project agreements that tie at least and stipulate this as part of the funding terms.
a portion of the implementer’s payment to the
achievement of specific targets. For example, a donor Co-created agreement:
government may engage in a PBC with World Vision PBCs can also be part of a unique agreement proposed by
where we are required to train 1,000 mothers in positive either the implementer or outcome payer.
deviance/hearth techniques to improve child nutrition.
Under the PBC, the donor issues payment to World Vision Performance-based contracts within the
only after the training has been successfully completed. project design:
Sometimes an independent validator is used to verify that It is also possible for implementers to embed a
the contract’s targets have been achieved. performance-based approach within their project
designs. For example, an implementer may negotiate
Paying for achieved results a performance-based payment with field partners or
sub-contractors.

Regardless of how a PBC is proposed, both outcome

payers and implementers will need to take care in
Outcome developing the project design and the subsequent
payer Implementer
3 1 contract agreement. At a high level, outcome payers and
Signing the RBF
implementers need to:
agreement 2 • define the target population;
• establish results indicators;
• agree on measurement and evaluation methods; and
• ensure data systems are in place (including adaptive
management systems if applicable).
Verifying results
(independent validator)

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Social impact bonds (SIBs)/development
impact bonds (DIBs)
What is it?
A SIB is an arrangement where funds from private
investors are used to fund a program that generates
cost savings for governments or donors. For example, a
program may save costs for a government’s justice system
when it prevents former prisoners from returning to jail or
save costs for the health system by preventing adults from
developing chronic illnesses. If the program is successful
(and only if it’s successful) in producing the promised
savings, the government offers a payment to the investors
and they earn a financial return in the process. However,
if the program fails to produce the savings, the investors
lose their capital. Thus, government donors only pay for
programs that are effective and the risk is transferred to
private investors. DIBs use the same concept, but the
donors are usually organisations such as the World Bank
or philanthropic foundations instead of governments.
Investor
Paying for achieved 2 Upfront working
results capital
Outcome
payer
4 1
Signing the RBF
agreement 3
Verifying results
(independent validator)
Governance flow (agreement)
Financial flow
Verification by independent validator
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What’s in it for you
The purpose of SIBs/DIBs is to allow donors to support
innovative programs that have good evidence without
risking their budgets if the programs fail. They also attract
private funding for social programs that may not be able
to generate their own income. While social enterprises
can repay investors through their profits, many other
innovative programs do not generate revenues. SIBs allow
private investors to support these programs because of
the repayment they receive from donors if the program
is successful. Through SIBs/DIBs, World Vision can attract
private investors for programs that otherwise may not have
been funded.
How to apply it
Once World Vision offices have validated the strength of
their evidence, ensured their ability to execute, confirmed
the financial feasibility and secured the support of senior
leaders, practitioners should take the following steps.
1. Identify potential donors/governments interested in
paying for proposed outcomes.
2. Build a consortium of investors, independent validators,
implementers and other relevant partners.
3. Design the SIB/DIB program and outline a high-level
agreement.
Implementer 4. Conduct legal due diligence on the multi-party
agreement.
5. Sign SIB/DIB agreement and sensitise stakeholders.
6. Implement and monitor SIB/DIB.
Further contact and information
For more information regarding RBF and the Public
Sector Engagement Initiative Toolkit, please contact
World Vision Australia’s New Business Team at
ausopdnewbusinessteam@worldvision.com.au
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1.0 What to expect from this module

1. Gain familiarity with results-based financing concepts, specifically performance-based
contracts and social impact bonds/development impact bonds.
2. Know the benefits of results-based financing and when to use it.
3. Understand the process for developing performance-based contracts and social impact
bonds/development impact bonds.
4. Access case studies, tools, and practitioner tips to help you design effective RBF projects
and mitigate risk.
5. Explore references for further learning materials, tools, and contacts for support.

Legend

Case studies Tools Checklist References Questions Activity

Monira and her children Jisma and Kaiser are Rohingya refugees in Bangladesh. Photo: Himaloy Joseph Mree/World Vision

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2.0 Introduction to the Private Sector

Engagement Initiative Toolkit
2.1 World Vision Australia’s Private social responsibility and philanthropic donations –
but to do so, appropriate capacities are required for
Sector Engagement Initiative conceptualising, establishing and standing-up new
This toolkit is part of World Vision financial mechanisms. Financed by World Vision
Australia’s Private Sector Engagement International’s Global Resource Development
Innovation Fund, the Private Sector Engagement
Initiative, which was established to Initiative seeks to build this capacity in various National
accelerate value for World Vision and Offices across the partnership. The lessons and
child wellbeing by developing innovative examples collected from this effort are integrated
ways to fund and deliver development into this toolkit to further disseminate our insights and
programs through private sector enhance the organisation.
partnerships. In addition to its alignment
with “Our Promise” by promoting 2.2 What is this toolkit for?
sustainable funding sources and greater There are numerous types of partnerships2 that
partnerships, private sector engagement World Vision can engage in to help further our vision
can support child wellbeing by and mission. Partnerships can be made with various
levels of government, other not-for-profits and the
championing innovations and improving private sector  . This Private Sector Engagement
accessibility to solutions in health/ Initiative Toolkit does not address all forms of
nutrition, education and livelihoods, partnering but specifically focuses on forming
among other areas. partnerships with the private sector.3 It is to be used
by World Vision staff, particularly those in National
For many of World Vision’s National Offices, Offices, as an instruction manual and guide in how to
engaging with the private sector as a partner in field best engage with and partner with the private sector
programming is a relatively new approach. Yet, most to benefit the communities we serve. With a growing
National Offices express either formal or informal number of grants encouraging private partnerships
strategic intent to engage with the private sector and a greater awareness of social responsibility and
for a combination of impact and income. Effective “pro-poor” market opportunities within business, this
engagement with the private sector, however, toolkit aims to build World Vision’s capability in this
requires technical and business development skills increasingly vital area.
that may still be growing or may not currently It should be noted that this toolkit does not address
exist within National Offices and Support Offices. the regulatory environment and legal requirements
Moreover, the more complex and often technical that exist in the countries where World Vision
new financial mechanisms underpinning private works. The vast differences between each geography
sector engagement require greater human resources, and the speed with which these laws change make
adapted processes and different combinations of it impractical to include this information. Toolkit
technical skills. users are highly encouraged to understand the legal
The 2017 Mapping of Private Sector Engagement context that applies to their countries and to their
across the World Vision International Partnership1 World Vision office’s specific type of legal registration
clearly showed that value can be achieved from or entity. Staff must ensure we do not undertake
strategic private sector engagement beyond corporate activities that jeopardise World Vision’s charitable
status. Staff are encouraged to consider innovative

1 To access the findings and recommendations, log in to WVCentral, go to the Partnering Community of Practice, then search in the documents library for “2018 01 11 – Mapping World Vision’s Private
Sector Engagement – Findings and Recommendations”.
2 The United Nations defines partnerships as “voluntary and collaborative relationships between various parties, both State and non-State, in which all participants agree to work together to achieve a
common purpose or undertake a specific task and to share risks and responsibilities, resources and benefits”. https://sustainabledevelopment.un.org/content/documents/2545MSP_Guidelines.pdf
3 The private sector refers to “for profit” organisations focused on but not limited to businesses (commercial enterprises), ranging from small informal businesses to large multinational corporations. The
composition of the private sector differs between developed and developing countries, with almost half of the private sector activities in developing countries taking place in the informal sector.

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In Nepal, the Knowledge Improvement Through Access to Books (KITAB) project uses an RBF approach. See Appendix B. Photo: World Vision
ideas to overcome potential issues, including the
participation of a Support Office that may have
more flexible legal options than their National
Office counterpart.
2.3 What is private sector engagement
and why is it important?
There are a number of ways in which organisations
like World Vision can engage with the private sector.
Most commonly when people think of involving the
private sector in World Vision’s work, the following
things come to mind: charitable donations/corporate
philanthropy, pro-bono services, cause marketing
or corporate social responsibility. Beyond these
approaches, there are private sector partnerships
that integrate the operations of international NGOs
and private sector partners more tightly, such as
through shared value and RBF – the focus of two
modules in this toolkit.
These deeper partnerships with the private
sector can contribute significant value in skills,
expertise, resources, assets and technology in the
implementation of World Vision programs. Their
involvement can also enable World Vision to build
innovative mechanisms for funding and delivering
our development projects, bring in new and more
sustainable revenue channels, and strengthen our
reputation (technical brand) with institutional donors.
In addition to this, partnerships with the private
sector can be used to promote economic growth,
empowering people through livelihoods that help
them lift themselves out of poverty and enhance
child wellbeing. The value that private sector partners
4 https://sustainabledevelopment.un.org/sdg17
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bring will depend on their involvement, which will
vary from one program/project to another.
Private partnerships in World Vision’s programs
also align with Sustainable Development Goal
17, “Partnerships for the Goals”, which aims to
“strengthen the means of implementation and
revitalize the global partnership for sustainable
development”. 4
2.4 What can I expect from this toolkit?
This toolkit does not contain everything there is to
know about engaging and partnering with the private
sector, but instead focuses on the following three
areas that are relevant to World Vision:
Module 1 – Creating shared value partnerships
Module 2 – Results-based financing
Module 3 – Soft skills and tools for private
    sector engagement
Each module in this toolkit contains an explanation
of the above three key areas to increase staff
and organisational knowledge in private sector
engagement. A number of case studies have been
used to provide practical examples for applied
learning by both readers of this toolkit and instructors
using this toolkit for training purposes. In addition to
this, some templates are provided, as are references
to pre-existing World Vision tools that can be used
to aid National Offices and Support Offices in
pursuing and forming successful partnerships with the
private sector.
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3.0 Overview of results-based

financing module
Results-based financing (RBF) is an approach where funders pay implementers upon the successful achievement of an
agreed target or outcome. This guide provides a practical introduction to two RBF mechanisms: performance-based
contracts (PBCs) and social impact bonds (SIBs)/development impact bonds (DIBs). While there are numerous variations
of RBF, these two approaches were found to be most applicable to World Vision. Appendix A of this guide includes a
table that summarises the RBF instruments available and offers some context as to where PBCs and SIBs/DIBs fit within
the wider category.

Even if readers of this guide do not implement complex RBF projects, simply building World Vision’s capacity to deliver on
pay-for-performance initiatives will be valuable as more donors are moving in this direction. It should be noted that World
Vision previously partnered with Instiglio, an international development advisory firm, to develop a comprehensive guide on
RBF in 2017 and users can find this document here5 (it is also listed among the recommended resources in Appendix C).
This module, however, is different in that it is meant to be a pragmatic overview for World Vision’s National Offices and
Support Offices.

In Bangladesh, Hena and her baby attend a World Vision-supported health clinic. Photo: Jon Warren/World Vision

5 https://payforsuccess.org/sites/default/files/resource-files/RBF_PractitionersGuidebook_Instiglio_18Oct2017.pdf

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4.0 Performance-based contracts

4.1 What is a performance-based 4.2 How a performance-based contract

contract? works
PBCs are project agreements that tie at least a Paying for achieved results
portion of the implementer’s payment to the
achievement of specific targets. These targets are
usually linked to outputs or outcomes desired by the
payer. For example, a donor government may engage
in a PBC with World Vision where we are required Outcome
payer Implementer
to train 1,000 mothers in positive deviance/hearth 3 1
techniques to improve child nutrition. Under the
Signing the RBF
PBC, the donor issues payment to World Vision only agreement 2
after the training has been successfully completed.
The target indicator could alternatively be based
on outcomes instead of outputs. In the scenario
discussed, the donor payment would be based on
the number of children who achieve a healthy weight,
for example. An independent validator is often used Verifying results
to verify that the target was achieved and will then (independent validator)
authorise payment.
Source: Instiglio/COV Report
The purpose of PBCs is to allow donors to pay for
To provide a more thorough overview of how a
successful results instead of ineffective programs.
PBC works, the diagram above illustrates the steps
By shifting the financial risk to implementing
involved in implementing one of these projects. Each
organisations, donors may also be more willing to
step is briefly described below.
support new and innovative programs without risking
their budgets if the programs fail. PBCs place greater 1. Signing the PBC agreement: The outcome
accountability on and provide more incentive for payer is the organisation that issues a payment
NGOs to fulfil the promises made in their proposals upon successful achievement of the project
and may promote more evidence-based programs. targets (agreed outputs, outcomes or
While PBCs tighten control over the achievement impact). This actor establishes a PBC with the
of results, they also place less scrutiny on project implementing organisation, or implementer, that
activities and give implementers the flexibility and outlines the targets to be reached, means of
freedom to pursue a range of strategies to achieve verification, and payment to be received upon
the desired impact. success.
Between 1993 and 2016, an estimated US$26.9 billion 2. Verifying results: After the implementer has
was disbursed through various RBF approaches, the delivered its activities, an independent validator
majority of which were PBCs.6 A growing number verifies that the contract’s targets have been
of institutional donors are adopting a results-based achieved and determines whether a payment
approach, and by building our RBF capacity, World should be issued by the outcome payer.
Vision will be better positioned to attract and deliver 3. Paying for achieved results: Once approved
on this funding. by the independent validator, the outcome payer
disburses the agreed funds to the implementer.

World Vision is most suited to the implementer

role, engaging independent validators to verify our

6 InterAction. Innovative finance for development: A guide for international NGOs. November 2018.

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results as necessary. While it is also possible for
the organisation to serve as independent validator
for other PBCs, World Vision has usually declined
these opportunities. Our monitoring and evaluation
professionals often have little time to conduct
external evaluations and World Vision’s primary role
in the sector is to be an implementation organisation
rather than an evaluation service.
It is interesting to note that there are no
requirements for how payments should be used
by implementers after they are awarded. Some
funders state that they use PBCs because targets
and indicators are established, but the payments
are actually made according to the implementer’s
budgeted costs instead of their results. Such designs,
while potentially useful for managing performance,
are not considered PBCs.
For a case example of performance-based incentives
being used by World Vision, see Appendix B of this
guide. This example is not technically a PBC since
the funder’s payments were not tied to specific
outcomes, but performance-based incentives were
used within the project for our value chain partners.
4.3 When (and when not) to use a
performance-based contract
Because of a PBC’s different approach, both outcome
payers and implementers should consider using this
mechanism in the following situations.
• Target outputs/outcomes are clear and
measurable: To avoid disputes between the
implementer and outcome payer about whether
a target was achieved, practitioners should only
apply PBCs to interventions that have a clear
measure of success. At times, this measure is so
apparent that an independent validator may not
be required to determine the results, but this
will depend on the situation at hand. To minimise
risk and reduce costs, it is often advisable for
National Offices and Support Offices new to
PBCs to start with contracts that do not require
an independent validator.
• Implementers have funds to undertake the
project: Since implementers need to undertake
program activities before any payment is received
from the outcome payer, they must have sufficient
funds to cover their expenses. It is best to
ensure implementers have an amount available
for contingency plans as well, in case the project
is poorly run and costs exceed expectations.
Private Sector Engagement Initiative Toolkit
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While the funding associated with large PBCs can
be attractive, World Vision offices should only
pursue contracts for which they have adequate
upfront capital. Often, the Support Office signing
a PBC with the donor will be responsible for the
upfront funds, but this can vary with each project.
Existing processes and safeguards used for match
funding can similarly be applied in this context,
recognising that the associated funding and risks
are higher.
• Implementers have strong capability to reach
and exceed project targets: Implementers
should be extremely confident that they can
exceed the targets set in the PBC even if
unforeseen issues arise with the project. Ideally,
implementers should be well-experienced in the
proposed intervention or at least have piloted
the program. They should also be realistic about
potential risks and take sensible steps to mitigate
these hazards. Because project payments are
dependent on reaching project targets, it is vital
that World Vision offices ensure they can execute
and set performance targets conservatively.
• Implementers can benefit from flexibility in
project activities: Well-designed PBCs provide
implementers with the right mix of incentives and
flexibility to deliver socially meaningful results. By
tying donor funding to results instead of activities
and inputs, PBCs can provide implementers
with greater flexibility to adjust their projects
and improve the impact generated, empowering
them to innovate and learn. Depending on the
terms of a PBC, World Vision offices may be free
to invest in necessary overheads, adapt projects
to changing contexts and experiment with new
strategies without lengthy funder consultations
or approvals.
• Transferring risk to implementers creates
added benefits: At times, donors may be
reluctant to fund new or innovative approaches
because of a fear of failure or uncertainty. By using
a PBC, funders may be more willing to support
an innovative proposal because they only issue a
payment if the approach proves to be successful.
Alternatively, donors may also choose to use a
PBC because they have had poor experiences
with ineffective projects that failed to achieve
the promised social impact. In both cases, these
funders are attracted to projects that they may
not have otherwise supported.
From a World Vision perspective, National Offices
will need to closely coordinate with Support Offices
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and openly discuss their ability or inability to execute
on a PBC. Given that Support Offices manage
relationships with institutional donors and often lead
the proposal writing or contract negotiation, there
is a risk that they will commit a National Office to
unrealistic performance targets. Conversely, Support
Offices could also be too conservative in setting
performance targets, missing an opportunity to
negotiate from a position of strength, showcase our
capability and/or claim a greater share of funding.
World Vision’s project models (e.g. Savings for
Transformation, Citizen Voice and Action) offer
a good foundation for PBCs. National Offices
can strengthen their capability in implementing
these models through their Area Programs or
grant projects, and the monitoring and evaluation
conducted for these efforts familiarises our staff with
the associated outputs and outcomes as well. By
strengthening their ability to oversee and implement
project models that align with donor interests,
National Offices can position themselves for PBCs
that use these interventions.
PBCs may also be useful for implementers from
a financial perspective. Where outcome payers
simply state the amounts that they are willing to
pay for specific social outcomes, it is possible that
implementers can earn a surplus from PBCs because
their costs are lower than the payment received. This
will differ from project to project and some donors
may prohibit the ability to earn a surplus from their
funds. But a growing number of outcome payers
are using “rate cards”, where they simply list the
amounts that they are willing to pay for certain social
outcomes. An example of a rate card is included
above-right:
Rate card for at-risk youth employment
Maximum
Outcome
outcome
Per at-risk youth ages 14-24
price
Improved behaviour at school $500
Completed Level 1 Certification $800
Completed Level 2 Certification $1,300
Entry into First Employment $2,000
(Individual at moderate-risk of reoffending)
Entry into First Employment $3,000
(Individual at high-risk of reoffending)
Employment Retention (12 months) $3,500
Source: Living Cities https://www.livingcities.org/blog/1213-
innovations-in-pay-for-success-outcomes-rate-cards
Such rate cards allow implementers such as World
Vision to quickly determine whether there is an
opportunity to gain a surplus and whether they wish
to pursue the PBC. When their program costs are
higher than the published rates, implementers will
not submit a proposal for the opportunity. When
program costs are lower than the rates, and where
the rules permit it, implementers will have a chance
to gain surpluses and apply for the contract.
In addition, PBCs may allow implementing
organisations to “recycle” their funds. Because
implementers are paid at the end of a successful
project, these organisations will have resources
available to finance their next project. With a single
sum of money, an implementer could fund numerous
PBCs if they continually meet their targets. This is
illustrated in the diagram below.

Performance-based
Performance-based contract
contract approach
approach
Initial Performance-based Performance-based
Initial Performance-based Performance-based
donation payment payment
donation payment payment

Project
Project Project
Project

Conventional
Conventional donor
donor approach
approach
Initial Additional Additional
Initial Additional Additional
donation donation donation
donation donation donation

Project
Project Project
Project Project
Project

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As illustrated above, a single donation can be used to
fund multiple PBCs if the implementer consistently
achieves its targets. In the conventional donor
approach, donations must be secured for each
discrete project. This may be particularly useful for
World Vision offices who seek funding from various
income streams. For example, philanthropists may
be attracted to the ability to have their donation
“recycled” through several projects to maximise the
impact generated. However, as mentioned above,
implementers must be confident in their ability to
continually achieve the targets.
4.4 Developing a performance-based
contract
It is difficult to provide a definitive process for
establishing a PBC since they are used by a number
of stakeholders and in different situations. However,
PBCs often appear in three scenarios: call for
proposals, co-created agreement, and PBCs within
a project design.
Call for proposals
Some donors use PBCs as part of their usual grant
process and stipulate this as part of the funding terms.
Often, implementers are selected through a call for
proposals like regular grants, and organisations can
choose whether they would like to apply, knowing
that this approach will be used. This is the most
common scenario encountered at World Vision
and the use of PBCs appears to be growing among
institutional donors.
Co-created agreement
PBCs can also be part of a unique agreement
proposed by either the implementer or outcome
payer. In these scenarios, the performance-based
payment is often used to solve a specific problem,
such as overcoming donor reluctance or ensuring
accountability among implementers. Both the
outcome payer and implementer will require some
flexibility and autonomy to be able to propose and
establish a PBC.
For World Vision, this scenario is often seen when
offices actively propose a project or negotiate
contract terms. We may approach a foundation or
institutional donor with an unsolicited, innovative
proposal, for example, and in co-creating the
partnership, performance-based mechanisms are
included. Similarly, in negotiating contract terms for
institutional grants, the use of performance-based
payments may be included.
Private Sector Engagement Initiative Toolkit
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Performance-based contracts within the
project design
It is also possible for implementers to embed a
performance-based approach within their project
designs. For example, an implementer may negotiate
a performance-based payment with field partners
or sub-contractors, holding them to account for
the deliverables and outcomes required. Similarly,
performance-based incentives can be used with
actors within a project’s ecosystem. For example, to
encourage agricultural input sellers to serve more
remote communities, implementers may offer a
performance-based payment for each sales agent
that is hired in distant areas.
This approach starts to stretch the definition of a
PBC and others may argue that it is instead another
type of RBF. Regardless of the specific terminology
used, this is a strategy that World Vision offices can
consider where appropriate.
While PBCs can be proposed by various stakeholders
in multiple situations, both outcome payers and
implementers will need to take care in developing
the project design and the subsequent contract
agreement. Due to the financial stakes attached to
key details, contract agreements can sometimes take
significant time and cost to finalise. At a high level,
outcome payers and implementers need to:
• define the target population;
• establish results indicators;
• agree on measurement and evaluation methods;
and
• ensure data systems are in place (including
adaptive management systems if applicable).
Practitioners may also wish to consider the following
features when designing a PBC.
• Combination of performance-based and
conventional funding: Projects can use both
performance-based payments and conventional
funding approaches in their designs. For example,
an implementer may receive $500,000 at the
beginning of the project to fund their expenses
and an additional $250,000 once the specified
targets are achieved.
• Payments based on degree of success:
Though outcome payments can be based on a
specific outcome for a pre-determined number
of beneficiaries, some projects adjust their
payments according to the amount of social
impact generated. For example, instead of
issuing a payment of $5,000 only when 1,000
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beneficiaries are served, a PBC may offer $5
for each successful beneficiary. This incentivises
implementers to exceed the minimum target.
• Maximum or minimum threshold: If outcome
payments are based on the amount of social
impact generated (as described above), funders
may choose to impose a minimum threshold
to ensure that an acceptable amount of impact
is produced. For example, the outcome payer
agrees to pay $5 per successful beneficiary
starting with the 1,000th beneficiary. If the
implementer fails to serve 1,000 beneficiaries,
they will receive nothing. At the 1,000th individual,
they will receive $5,000 ($5 x 1,000 beneficiaries)
and an additional $5 for each extra beneficiary
they serve. Maximum thresholds can also be
imposed by outcome payers, often when their
available funding is exhausted.
In addition, it is important to have each partner’s
legal advisors review the documentation to ensure
all relevant risks are identified and mitigated. Poorly
developed agreements can lead to confusion and
disputes among stakeholders, especially when a
project has been underperforming and tensions
run high.
Sample PBC Agreement
Management Sciences for Health, a US-based
NGO, has made part of its PBC7 publicly
available and it can serve as a useful reference
for World Vision and other organisations. Note
that the contract is between Management
Sciences for Health and its sub-contractors.

4.5 Risks of a performance-based contract

There are a set of common risks that all practitioners should be aware of when considering a PBC. A summary of
these risks and their mitigation strategies is included in the table below.

Risk Description Mitigation strategies

Failure to achieve • Ecological/climatic, political, economic, • Implementers can advocate for specific clauses
targets due to criminal, operational and other within the contract agreement that provide
factors outside of unforeseen factors prevent the them with protection in the case of major issues
implementer’s control implementer from achieving the project outside of their control.
targets, even when they were executed • Base outcome payments on project outputs (e.g.
extremely well. number of farmers trained) instead of outcomes
(e.g. increase in crop yields) since implementers
will have more control of these indicators.
• Integrate contingency strategies into
implementation plans to minimise risks
from external factors (e.g. crop insurance,
disaster risk reduction practices).

Unintended • Pressure to achieve targets may
consequences/perverse encourage implementers to cut corners
incentive to meet and undermine the social impact that
project targets was meant to be generated.
• For example, if the target indicator is
the number of children who show up
at school, staff may be incentivised to
have sick children attend classes instead
of seeking medical attention or urge
children from outlying households to
travel long distances to school without
providing proper transportation or
safeguards.
• Practitioners should select target indicators
carefully to minimise unintended consequences.
• It is best to pilot project intervention
before agreeing to a PBC to uncover potential
issues and perverse incentives.
• Where unintended consequences may exist, put
safeguards in place to ensure these are minimised.
• The project design may consider adding a
measure for unintended consequences to ensure
they are kept low.

7 http://siteresources.worldbank.org/INTHSD/Resources/topics/Services/SampleContract.pdf continued next page

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Risk Description
Reputational risk • Implementers could damage their
of a failed PBC reputation if they do not achieve their
outcome targets and payments are
not received.
• This will reduce the level of trust
afforded to the organisations when
they next attempt a PBC and pursue
additional funding or partnerships
(even if unrelated to the PBC).
Failure to achieve • When an implementer fails to achieve
targets the project targets, it loses the funds
that were used to pay (or are still owing)
for the project’s expenses.
Ecosystem actors • Where performance-based incentives
not motivated for are used to encourage desirable
long-term change by behaviours by ecosystem actors, there is
performance-based a risk that 1) these stakeholders are not
incentives motivated by outcome payments, and
2) their behaviour change will not turn
into sustained habits and stakeholders
will revert to their old practices after the
project ends.
Outcome payment • The payment issued by the outcome
inadequate to cover payer is too low to reimburse the
actual implementation implementer for their project expenses.
costs • While the implementer believed that
the payments would be adequate to
cover their estimated budget, the actual
costs were far higher.
Private Sector Engagement Initiative Toolkit
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Mitigation strategies
• Pilot a project intervention before agreeing to
a PBC to identify potential implementation issues.
The project design should replicate the pilot’s
conditions as closely as possible.
• Closely monitor the project’s implementation to
identify potential issues and resolve them before
they become a major problem.
• Practitioners can try to lower expectations
regarding the PBC, but this may create an
impression that the implementers themselves
have little confidence in their capabilities.
Practitioners should use this tactic cautiously.
• Implementers should be well-experienced in
the proposed intervention or at least have
piloted the approach to ensure it can realistically
deliver the expected results.
• Targets should be set at a suitably low
threshold so that implementers can safely
achieve the targets.
• Closely monitor progress, especially at the
beginning of the project, to identify potential
issues and address problems before they derail
the project. Project managers should increase
their number of monitoring meetings/reports,
focus on implementation progress as much as
compliance and monitoring, and use leading
indicators to highlight potential risks and agile
systems to respond quickly.
• Pilot a project intervention before agreeing to
a PBC to confirm that ecosystem actors are
motivated by outcome payments. The project
design should replicate the pilot’s conditions as
closely as possible.
• Complement outcome payments with training,
social pressure and other behaviour change
strategies to maximise the formation of long-
term habits.
• Implementers should be well-experienced
in the proposed intervention or at least have
piloted the approach to ensure it can meet the
targets within the required budget.
• The project design should replicate the pilot’s
conditions as closely as possible to minimise any
variability between budgeted and actual costs.
• Implementers should be conservative in the
budgeting and allow for cost overruns due to
unforeseen issues (e.g. implementation delays,
staff turnover, foreign exchange fluctuations).
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4.6 Lessons from past performance-
based contracts
In practice, implementing a PBC can sometimes differ
from the stakeholder’s design. Several lessons learned
from past PBCs are shared below to promote greater
success within the sector.
Greater time and cost needed for start-up
Because stakeholders need to agree on the
payment structures, verification method and other
aspects of the contract, the time and cost needed
at the beginning of a PBC is greater than typical
institutional grants.
Time and cost needed for measurement
Stakeholders should allocate additional time and
cost to the project for the verification of targets.
Outcome payers will need to reduce the amount
of funds available for field programming and
implementers should expect a delay after the
delivery of results while indicators are measured.
This extra time and cost can sometimes be higher
than expected.
Mitigate risks of corruption or unintended
consequences
Past practitioners have found that a proactive
strategy to counter perverse incentives is necessary
to avoid potential issues. It is often difficult to predict
the many ways that stakeholders can circumvent
established processes and undermine the social
impact produced, even when intentions are
well meaning.
Ensure proper support in initial stages
Support for stakeholders to adapt to new systems
and processes associated with PBCs has been shown
to be helpful in past projects, particularly during
the early stages of a project. In addition to the new
financing, monitoring and perhaps programming
changes that are needed by implementers, behaviour
changes may be expected of ecosystem actors
as well. Offering additional coaching, reminders,
reinforcements and other support can help ensure
smooth implementation.
For a case example of performance-based incentives
applied to a World Vision project, see Appendix B of
this module.
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4.7 Conclusion
As more donors adopt PBCs, World Vision will
need to enhance our capability to deliver on
specified targets and manage the increased risk.
Donors appreciate the ability to pay for successful
achievements instead of ineffective programs,
and greater accountability will be placed on
World Vision’s staff and processes. This focus on
performance, however, provides World Vision with
more flexibility to adapt our project activities to
unforeseen circumstances and develop innovative
approaches that produce even more impact.
The shift towards performance-based approaches
is also reflected in the growing use of commercial
contracts by institutional donors. In these contracts,
donors retain external organisations to manage
large development programs or initiatives and
award significant sums from their international
development budgets. Like performance-based
contracts, commercial contracts are paid upon
successful completion of specific targets or outputs.
Commercial contracts are beyond the scope of the
Private Sector Engagement Initiative Toolkit, but
World Vision is mobilising resources to explore this
funding modality.
Given the upfront capital required for PBCs (including
commercial contracts), World Vision has been
exploring the establishment of a shared funding pool.
This would be a central fund from which Support
Offices can draw to finance PBCs. At the time of
writing, this fund has yet to be finalised. For more
information on World Vision’s efforts in commercial
contracting and the shared funding pool, contact
Anna Addison (anna.addison@worldvision.org.uk)
at World Vision UK.
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5.0 Social impact bonds and development
impact bonds
5.1 What is a social impact bond/
development impact bond?
A SIB is an arrangement where funds from private
investors are used to fund a program that generates
cost savings for governments. For example, a
program may save costs for a government’s justice
system when it prevents former prisoners from
returning to jail or save costs for the health system by
preventing adults from developing chronic illnesses.
If the program is successful (and only if it’s successful)
in producing the promised savings, the government
offers a payment to the investors and they earn
a financial return in the process. However, if the
program fails to produce the savings, the investors
lose their capital. Thus, government donors only
pay for programs that are effective and the risk is
transferred to private investors.
In relation to DIBs, instead of governments, the
donors are usually organisations such as the World
Bank or philanthropic foundations. Instead of cost
savings to annual government budgets, donors in
global development often seek more effective or
cost-efficient approaches to achieving social impact.
For example, a program may seek to reduce malaria
infections within a community more effectively
School children in Myanmar. Photo: Kyaw Thet Tun/World Vision
8 Brookings Institution. Paying for social outcomes: A review of the global impact bond market in 2017.
https://www.brookings.edu/blog/education-plus-development/2018/01/17/paying-for-social-outcomes-a-review-of-the-global-impact-bond-market-in-2017/
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than current methods and the World Bank commits
to paying an agreed sum if this specific outcome is
reached. That being said, governments (both foreign
and domestic) can be donors as well.
The purpose of SIBs/DIBs is to allow donors to
support new and innovative programs without risking
their budgets if the programs fail. SIBs and DIBs place
greater accountability on NGOs to fulfil the promises
made in their proposals and promote more evidence-
based decisions in the sector. In addition, they attract
private funding for social programs that may not be
able to generate their own income. While social
enterprises can repay investors through the profits
they produce, many other innovative programs do
not generate revenues through their activities. SIBs
allow private investors to support these programs
because of the repayment they will receive from
donors if the program is successful.
As of the beginning of 2018, 108 impact bonds have
been contracted around the world.8 Only six of
these 108 are DIBs that are implemented in low and
middle-income countries, while the rest are SIBs.
World Vision has explored several DIB opportunities
in the past, but has yet to launch an impact bond at
the time of writing.
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5.2 How a social impact bond/development impact bond works

Investors
(e.g. recoverable grants,
community investments, institutional assets)

7 Return 1 Invest

Intermediary
(e.g. Social finance, local foundations, Structure,
Pay for
6 success
local service provider coordinators) 2 coordinate,
manage risk

Outcome payers Social service providers

(e.g. government, foundations, (e.g. non-profits, social enterprises,
corporations) B-corps, for-profits)

Measure/
5 evaluate
3 Deliver

Achieve
Independent validators 4 outcomes Population in need
(e.g. evaluation firm, academics, (e.g. homeless, formerly incarcerated,
consultants) at-risk youth, aging seniors)

Source: OECD.org

To provide a more thorough overview of how an
impact bond works, the diagram above illustrates the
steps involved in implementing a SIB/DIB. Each step
is briefly described below.
1. Invest: Private investors provide funds to the
intermediary, who coordinates the entire SIB/DIB.
2. Structure, coordinate, manage risk: The
intermediary selects social service providers
who implement the proposed program and
distribute the funds from private investors.
3. Deliver: Social service providers use these
funds to implement the program with targeted
beneficiaries.
4. Achieve outcomes: If the design and delivery of
the program are successful, the social outcomes
promised to the donors will be achieved.
5. Measure/evaluate: Independent validators are
brought in to measure the outcomes achieved by
the program and provide an objective decision
on whether a payment should be made.
6. Pay for success: If the independent validators
confirm that the outcomes have been achieved,
then the donors or outcome payers make a
payment to the intermediary.
7. Return: After the payment is received, the
intermediary passes these funds to investors,
who earn a financial return or profit on their
original investment.
World Vision is most likely to play the role of
intermediary or social service provider. Intermediaries
oversee and coordinate the SIB/DIB, while social
service providers implement the intervention. It is
possible that we can play both roles at the same time,
but some donors prefer these positions separated to
ensure that social service providers are objectively
selected (or fired if performance is poor) and that
investor interests are effectively represented. This will
need to be discussed with stakeholders on a case-by-
case basis.
It should be noted that a portion of the funds
received from the private investors will go to the
intermediary and independent validators for their

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services. Therefore, the investors will be funding
the program costs (and associated overheads), the
independent evaluation of the program, and the
intermediary’s costs for coordinating the program.
The payment received from the donor/outcome
payer must be enough to cover all these expenses as
well as provide an adequate return for the investor.
This may seem like a lot of requirements, but keep
in mind that SIBs and DIBs are meant to test and
validate promising programs that have good evidence.
Once a program has shown itself to be consistently
effective, donors and other organisations can simply
replicate the program without paying investors,
intermediaries or even independent validators.
These additional costs are included in the SIB/DIB
only because we are setting up a low-risk trial of the
innovative program for donors.

Case study

reading and math levels. The Quality

Education India DIB aims to address this
issue by offering outcome payments for
improvements in numeracy and literacy.

The DIB plans to support over 300,000 children, with

investors providing US$3 million over the life of the
project and outcome payers offering up to US$11
million for successful results. Payments are made
First grade students, North Tripura, India. Photo: Annila Harris/ yearly throughout the life of the DIB and each annual
World Vision disbursement is used to fund program expenses
incurred in the following year.
Quality Education India
development impact bond Of the $11 million in outcome payments, 78 percent
will be spent on program implementation, 16 percent
In India, enrolment in education on management costs, and a maximum of six percent
has shown promising progress, but on the return to investors. This six percent return is
educational achievement among students measured on an internal rate of return basis.
has lagged. As few as 25 percent of third- The players involved in this development impact
graders in rural areas are at the required bond are as follows:

Investor UBS Optimus Foundation

Additional funding DFID will provide funding for performance management, legal, knowledge and
learning, and outcomes evaluation

Intermediary Dalberg
Service providers Kaivalya Education Foundation (KEF) – a Piramal Initiative, Society for All Round
Development (SARD) and Gyan Shala
Independent validator Gray Matters India

Outcome payers Michael and Susan Dell Foundation, Tata Trusts, Comic Relief, Mittal Foundation
and British Telecom

British Asian Trust provided support in convening many of these payers

For more information9

9 https://qualityeducationindiadib.com/

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5.3 When (and when not) to use a • The proposed program is not financially
self-sustainable. If the proposed program is
social impact bond/development not a social enterprise and does not generate
impact bond income, SIBs and DIBs are a potential option
At a high level, a SIB or DIB should be considered for attracting private investors. The payments
when the following conditions are true. received from donors/outcome payers would
provide the financial return needed to gain
• You have strong evidence about the interest from private investors and motivate
effectiveness of a new or innovative program. them to fund programs that they would have
Because payments from the outcome payer are otherwise dismissed. However, if the proposed
only made when the promised social outcome program involves a social enterprise that will be
is achieved, organisations should be extremely financially self-sustainable, it may be easier to raise
confident that their program can meet and funds from traditional investors. In exchange for
exceed the target outcome. It is our experience their funds, these investors would own a certain
that the rigorous evidence required for SIBs/DIBs percentage of the social enterprise and receive
is often not available for World Vision’s program dividends from the business. This approach may
approaches, but we hope this will change with the be faster and less expensive than establishing
various initiatives currently being implemented to a SIB/DIB because there are fewer partners to
further strengthen our impact evaluations. Robust coordinate and more people are familiar with
evidence is the first item needed since it must owning business shares.
be available to even engage outcome payers and
investors in initial discussions on SIBs and DIBs. Of course, if your proposed program is a social
Typically, organisations have relied on positive enterprise, it is possible to seek funding from
results from randomised control trials to develop both traditional investors and SIBs/DIBs, but
a SIB/DIB. At the very least, your evidence should this will create a high level of complexity. Some
be statistically significant and applicable to the organisations may consider this option if the social
program and geography being proposed. Strong enterprise is only partially sustainable and the SIB/
impact evaluations from other organisations DIB income is needed to subsidise operations.
can also be used for this purpose, but we must
be sure of its relevance and applicability to Beyond these conditions, practical concerns about
the communities being targeted. World Vision the feasibility of creating a SIB/DIB should be
and our partner organisations also need to be considered as well:
confident that we can successfully implement the • Will you satisfy government/donor criteria?
program to produce the promised results.
• Will you be able to deliver the outcomes
• The innovative program is having difficulty required?
attracting funding and adoption. Developing • Will you be able to attract investors?
a SIB/DIB requires time and money, and if the
proposed program can find funding through
established grants, philanthropy or child External Resource for Deciding SIB/DIB
sponsorship, then these options should be Suitability
explored as they will likely be more efficient.
However, there are times when proven solutions Social Ventures Australia has developed a brief
with strong evidence still struggle to gain funding guide addressing these pragmatic issues called
and widespread adoption. SIBs and DIBs are “Is Your Program Suitable for a Social
appropriate for these scenarios since they provide Impact Bond?”10. While it is written from the
donors with a low-risk method for testing the perspective of SIBs instead of DIBs, the insights
proposed program. Because donors only pay for are still applicable.
the activity after social outcomes are successfully
achieved, they may be more willing to commit
their funds to the initiative. For World Vision,
it presents an opportunity to demonstrate and
prove the effectiveness of emerging approaches
that have not gained greater acceptance.
10 https://www.socialventures.com.au/sva-quarterly/is-your-program-suitable-for-a-social-impact-bond/

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5.4 Exploring a potential social impact
bond/development impact bond
For offices that believe they have a program that
would be suitable for a SIB/DIB, it is wise to test
these assumptions before committing a large
amount of resources. We suggest carrying out the
following initiatives. This forms the first step in the
development process. Not all tasks will be relevant
in each situation. We encourage you to select the
ones that suit your needs instead of undertaking all
the tasks below.
Validate the strength of your evidence
Compare the rigour of your impact evaluations with
those of other successfully-funded SIBs and DIBs.
If you do not have the appropriate monitoring and
evaluation expertise in your office to make this
assessment, contact the following for support:
World Vision International
Carolyn Kabore
Senior Research Advisor Resilience and Livelihoods,
Evidence and Learning Unit
carolyn_kabore@wvi.org
Technical Support Office
Deb Ingersoll
Senior Global Resource Development Lead and
Livelihoods Technical Advisor
deb_ingersoll@wvi.org
World Vision Australia’s New Business Team
ausopdnewbusinessteam@worldvision.com.au
Friendly contacts at external organisations may also
be able to assist.
Pilot or implement the program and ensure
all operational issues have been solved
Many organisations note that it is very difficult
to manage a new or innovative program while
implementing a SIB/DIB. As such, it is strongly
recommended that organisations be very
knowledgeable and experienced with the program
they are proposing for a SIB/DIB, ideally having
piloted or implemented the program over long
periods. During the SIB/DIB, the only innovation
should be the financing mechanism itself, not the
program. This is because it is very challenging to
manage a new program and implement a new
financing mechanism at the same time. While
program changes can be made during an impact
bond’s implementation to ensure targets are met,
it is best to have all issues resolved beforehand.
Private Sector Engagement Initiative Toolkit
Results-based financing module
Assess the financial feasibility of a social
impact bond/development impact bond
As mentioned previously, SIBs/DIBs have a unique set
of financial requirements. The payment made by the
government or donor must be enough to cover:
1. the cost of the program;
2. the cost of the independent evaluation;
3. fees from the intermediary to administer and
coordinate the SIB/DIB; and
4. financial return that is agreeable to investors.
Therefore, the proposed program usually needs
to offer a meaningful cost saving from current
programming approaches to attract an outcome
payer. We suggest you do a high-level calculation of
the expenses above to understand the size of the
payment you will need from governments or donors,
the amount of funds needed from investors and the
financial returns that can be offered. This will provide
a view of how feasible and realistic it will be to obtain
an outcome payer and investors. Some donors may
be willing to overlook certain expenses if they are
simply looking to demonstrate the effectiveness of
your program, but this will need to be validated on
a case-by-case basis.
Confirm your leadership’s support
Establishing a SIB/DIB requires a sizable amount of
time and money. Legal advisors often need to be
called and, particularly for first-time implementers,
consultants or intermediaries usually need to be
obtained as well. In addition, a significant amount of
staff time and some travel will be required. Because
of the many partners involved and the complexity
of the terms being negotiated, SIBs/DIBs can take
upwards of two years to establish.
Given this time and expense, it is important to set
the expectations of senior leaders accordingly and
ensure they understand the organisational
investment that is required. Senior leaders often
need to advocate for this investment to board
directors and other oversight bodies as well, and they
must be prepared for the possibility that the team
fails to find interested outcome payers or investors.
This is not to say that SIBs/DIBs are impractical
(a growing number of organisations are using this
mechanism), but leaders should know that they
are different from World Vision’s usual institutional
grants. Senior leaders should also understand and
endorse the SIB/DIB intervention and raise all their
concerns at the early stages of the development
process instead of later on.
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5.5 Creating a social impact bond/
development impact bond
In every project development process, especially
where several partners are involved, many factors
change according to the situation and events rarely
happen in a linear fashion. This is particularly true of
SIBs and DIBs because of their complexities.
Nevertheless, the following steps offer a general
guideline for establishing a SIB/DIB. Please note
that this section assumes that all applicable tasks
in the “Exploring a potential social impact bond/
development impact bond” section have already
been completed. For those who have validated their
evidence, resolved implementation issues, assessed
the financial feasibility and confirmed the support
of their organisation’s leadership, the steps below
are recommended.
Step 1
Explore prospective outcome payers
Outcome payers (the governments or donors that
commit to making payments when the promised
social outcomes are achieved) are often difficult to
find. While some governments may issue an open call
for SIB/DIB ideas, others are only exploring this space
on a case-by-case basis and can limit their projects
with a very specific set of criteria. As organisations
commit the time and cost needed to assemble
partners and design a SIB/DIB, it is advisable to
engage potential outcome payers as well.
This can provide an early indication of whether there
is strong demand for the outcomes being offered
by the SIB/DIB. If demand is low, the consortium
can better prepare and discuss the sizeable effort
and time needed to realistically secure an outcome
payer. In addition, if you are lucky enough to secure
a payer early in the process, they can offer support
by providing cost and impact data to help assess the
financial feasibility, making introductions to relevant
stakeholders and perhaps funding the initial analyses
and pilots.
Some governments and outcome payers have already
calculated the cost that they are willing to pay for
specific social outcomes and have published these
in “rate cards”. Practitioners can then easily assess
whether their program intervention can produce
social outcomes at the published rates and decide if a
SIB/DIB is worth pursuing further. Rate cards are also
helpful for negotiating payment amounts if outcome
11 https://socialfinance.org/
12 https://www.instiglio.org/en/
13 https://www.dalberg.com//
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payers are not seeking internal savings and have done
little analysis.
Included below is the rate card for the UK Innovation
Fund from 2016. Please note that the social outcomes
referenced below are for domestic British programs,
not international development.
Rate card for the UK Innovation Fund
Outcome Rate
Improved attitude towards £700 GBP
school
Improved behaviour £1,300 GBP
Improved attendance £1,400 GBP
Entry Level Qualification £900 GBP
NVQ level 1 or equivalent £1,100 GBP
NVQ level 2 or equivalent £3,300 GBP
NVQ level 3 or equivalent £5,100 GBP
Entry into employment £3,500 GBP
Sustained employment £2,000 GBP
Maximum amount payable £11,700 GBP
per individual over 3 years
Source: OECD – Social Impact Bonds: State of Play and Lessons Learnt
oecd.org/cfe/leed/SIBs-state-play-lessons-final.pdf
Step 2
Build a consortium of relevant partners
Various partners will need to be engaged in the
development of the SIB/DIB. Depending on the role
played by World Vision, other organisations may be
required as the intermediary, social service provider,
independent validator and investor. In addition, legal
advisors, social finance consultants and other support
may be needed during the design and development
of the SIB/DIB. The commitment and capability of
the partners will greatly influence the quality of the
SIB/DIB that is ultimately created, so care should be
taken in selecting the right consortium members.
Organisations that may serve as intermediaries
include Social Finance11, Instiglio12, Dalberg13,
Limestone14, EY15 and Palladium16.
Identifying potential investors can also take time.
Engage intermediary organisations, social finance
consultants, and/or outcome payers to assist with
relevant introductions if appropriate.
14 http://limestone-analytics.com/
15 https://www.devex.com/organizations/ernst-young-22233
16 http://thepalladiumgroup.com/
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Identifying investors in similar SIBs/DIBs may also
uncover promising leads, and forums such as
social finance conferences and online platforms
and communities for the RBF sector can also help.
Given the size of most SIBs/DIBs, investors are most
often institutions and foundations rather than high
net worth individuals. Finding impact investing or
social finance organisations with an interest in your
geography or issue area is a good place to start.
Where possible, engage new investors to avoid
cannibalising existing donor funds. If existing high net
worth donors are involved, consider asking them to
invest in the SIB/DIB through their investment capital
instead of their philanthropic capital if there is a risk
the donor will withdraw their support of another
World Vision project.
Beyond the effectiveness of their work, partners
will need a governance framework to organise
their collaboration. Issues such as decision-making
processes, sharing of costs, dispute resolution
and external/internal communication should be
addressed, ideally through a memorandum of
understanding that covers the SIB/DIB development
period and perhaps later stages as well. If an outcome
payer or similar organisation has been engaged, it
is possible that this organisation will leverage its
networks and influence to secure the most promising
consortium members.
These details can be developed through design
workshops but will likely take a series of collaborative
meetings and messages as well. The activities
described in the “Exploring a potential social impact
bond/development impact bond” section may need
to be revisited as well since new consortium partners
would not have had a chance to evaluate these
issues in depth. They may need time to confirm their
leadership’s support, calculate their own operating
costs and ensure they can implement their roles
effectively. Given this, the SIB/DIB development
process may go back and forth between internal
assessments within individual organisations and
design decisions among the larger group.
In their report, “Choosing social impact bonds: A
practitioner’s guide”, BridgeVentures outlines 15
specific design features that should be considered
when developing a SIB/DIB. These are reproduced in
a table on the next page to provide a general guide
for your consortium’s design decisions.

Step 3
Design the social impact bond/
development impact bond and outline
a high-level agreement
After securing your consortium members, all the
partners should come together and develop the
details of the SIB/DIB proposal. For example, items
to be decided include:

• role and activities of each consortium member;

• timeline for SIB/DIB activities;
• specific indicators for measuring the proposed
social outcomes;
• data collection and measurement systems to be
used during program delivery;
• budget for the SIB/DIB and how much will be
allocated to each consortium member;
• measures to be taken if problems occur and
progress towards social outcomes is off-track; and
• maintaining independence and avoiding conflict of
interest between the intermediary, social service Nutrition education, southwest Bangladesh.
providers and independent validator. Photo: Jon Warren/World Vision

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World Vision Australia
While the features in this table are presented in a
linear fashion, practitioners may find themselves
moving back and forth between adjacent items
as needed. It is also interesting to note that
BridgeVentures assumes that the outcome payer
(described as government entities or philanthropists
in the “Who?” column) is an active collaborator in the
Design features for SIBs/DIBs
BridgeVentures has identified the following 15 design features that can be integrated into a SIB/DIB’s design. While these features may seem
like best practices that should always be adopted, the approach used to achieve them will differ for each SIB/DIB. This is a useful guide as
WV offices outline the details of their design. For more information17
Intended
Design features required
benefits
Focus 1. Ensure payment metrics
resources on directly relate to intended
outcomes outcome (and include a
longer-term outcome
evaluation if necessary).
2. Clearly define target
beneficiaries.
3. Identify the full cost to society
of the issue being addressed,
thereby establishing a value for
the social outcomes sought.
4. Establish a way of accounting
for what would have
happened anyway.
5. Ensure all parties will agree
on whether outcomes have
or have not been delivered,
against which payment will
be made.
Invest in 6. Support outcomes payments
intervention across government
and departments.
preventative
services
17 https://www.bridgesfundmanagement.com/wp-content/uploads/2017/08/Bridges-Choosing-Social-Impact-Bonds-A-Practitioner%E2%80%99s-Guide.pdf
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design process. The participation of outcome payers
is recommended where possible as they can provide
cost data to help assess an impact bond’s financial
feasibility. Moreover, outcome payers can offer
guidance on the type and strength of evidence they
seek to release payments and individuals can help
advocate for the proposal within their organisation.
Activities needed Who?
Evidence gathering The originator of the SIB is often well-placed
(and outcomes to identify the relevant metrics for the intended
evaluation) outcomes, as they are likely to have a longstanding
focus on the issue. Foundations and academics
could be another source of understanding the
outcomes that could be achieved and relevant
metrics, as they often have deep knowledge of social
issues and the various interventions tackling them.
Outcomes If the set payment metrics do not align with the
evaluation longer-term or wider outcomes sought, core parties
might put in place a separate outcomes evaluation
to review these. In most cases independent
evaluations are being commissioned by government
or donors to be delivered by evaluation experts
and academics.
Evidence gathering, Government or donors establish the price they can
establishing pay, which may require financial support from other
counterfactual and government entities or philanthropists. It is likely to
putting a price on require scrutiny of historic costs and future budgets,
outcomes. involving treasury/finance departments.
Evidence may already be available, held by the
service provider, government or donor or be in the
public domain – evidence that can then be mined
to establish the counterfactual.
Independent The role needs to be undertaken by an
valuation or audit. independent party (audit firms or academics) to
ensure objectivity.
Top-up funds, Government or donors may need to link up with
whether issue- other government departments or philanthropists
specific or social to top up payments.
impact bond-specific.
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Design features for SIBs/DIBs continued
Intended
Design features required
benefits
Stimulate 7. Build data collection and
innovation/ reporting systems that enable
Have scope accurate and timely reporting
to be on progress.
innovative
8. Ensure governance structure
is empowered to respond
decisively and creatively.
9. Drive appropriate referrals
by enaging and incentivising
“gatekeepers”.
Grow 10. Tap new sources of capital
services to avoid “cannibalising”
existing funding.
11. Fully cost the required
intervention and investment.
12. Match investors’ financial
risk-adjusted return
expectations to outcome
expectations.
Link financial 13. Explore top-up payments
returns that create a financial
to social upside opportunity linked
outcomes to impact upside.
14. Consider tiered capital
structures, where investors
with deep understanding
of the target group and
outcomes sought to provide
downside protection
to attract less familiar
investors.
Catalyse 15. Ensure investors can engage
entrepre- and influence.
neurial
solutions
Source: BridgeVentures
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Activities needed Who?
IT systems and Such systems can be developed by service
performance providers, if not already in place, or developed
dashboard building. by external consultants to be used by service
providers.
Board and Investors typically form part of the governance
management structure, given that their returns are linked
oversight enabling to successful delivery outcomes. Where there
parties to track are multiple investors, this responsibility will be
progress and inform delegated to a lead or fund representing investors.
delivery.
Stakeholder The responsibility for ensuring appropriate referrals
engagment. falls most often to the service provider. However,
government entities often act as gatekeepers for
referrals, and need encouraging or incentivising.
Given that the government enitities are often also
commissioners, this is more often within their
control than within service providers’ control.
Corporate finance Corporate finance – i.e. financial modelling of
and capital raising. the SIB structure – and capital raising could be
undertaken by the government or donor or serivce
provider. In most instances, it has been supported
by intermediaries who have access to a network of
investors and understand their financial return and
outcome expectations. This has included impact
investing funds, investment banks and non-profits
specialing in impact advisory and consulting.
Top-up funds, Additional government entities and/philanthropists
whether issue- may provide top-up payments to supplement the
specific or social set price per outcome where the main government
impact bond- or donor paying for outcomes has a hard cap.
specific.
Tiered capital Downside protection has been provided by higher-
structures and risk bearing investors, which can include service
guarantees. providers investing themselves, as well
as government or donors.
Hands-on approach If investors do not have the capacity or capability
to tackling progress to engage directly, oversight may be delegated to
and informing advisers and/or via specialist funds.
delivery.
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Series of payments
Some SIBs/DIBs schedule a series of payments
throughout the life of the program. This allows
investors, intermediaries and outcome payers to
ensure progress and accountability during the impact
bond instead of waiting until the end to learn the
results. They can work collaboratively with service
providers and other stakeholders to identify and
address issues as they arise.
Instead of disbursing these early payments to
investors, some SIBs/DIBs re-invest these funds
into program expenses. In fact, some impact bond
designs depend on successful achievement of these
initial payments to finance subsequent activities. This
creates additional risk for the SIB/DIB because an
unexpected problem at the beginning of the project
could jeopardise the entire impact bond. However,
for those who are confident in their program
intervention and execution, this approach can also
decrease the funds required from investors and
perhaps enhance the return and willingness to invest.
Outcome payments based
on degree of success
Though outcome payments are often based on a
specific outcome for a pre-determined number of
beneficiaries, some SIBs/DIBs adjust their payments
according to the amount of social impact generated.
For example, instead of issuing a payment of $10,000
only when 1,000 beneficiaries are served, a social
impact bond may offer $10 for each successful
beneficiary. A payment of $6,000 is made if only 600
beneficiaries are served, while a payment of $13,000
would be made if 1,300 beneficiaries are served.
Some impact bond designs use both fixed and
dynamic approaches simultaneously. For example, the
outcome payers agree to disburse $10,000 only if no
fewer than 1,000 beneficiaries are served. However,
they also agree to pay an additional $10 for each
successful beneficiary beyond the first 1,000 people.
This approach might be used because a government
only realises savings after 1,000 beneficiaries are
supported. It is also a strategy to incentivise the SIB/
DIB consortium to continue generating social impact
instead of stopping after the minimum target is
reached.
Transaction cost ratio
As mentioned above, the cost of an impact bond
goes beyond the funds needed for the program
intervention itself. Fees for independent validators
and the intermediary are also needed to run the
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SIB/DIB. In addition, consultants and lawyers may be
required to help establish the impact bond. All of
these indirect expenses are considered “transaction
costs” needed to facilitate the mechanism and, like
many other social impact funders, stakeholders
seek to maximise the percentage of funds going
to beneficiaries and reduce the transaction cost
ratio. Thus, practitioners should be mindful of the
transaction cost ratio in their design and ensure
the appropriate expectations are set with potential
investors and outcome payers.
These transaction costs are usually necessary when
advancing an innovative approach that is unfamiliar
to many. The lessons, tools and processes developed
during a SIB/DIB’s design should be widely shared
with the sector to reduce transaction costs for
future proposals. At times, organisations could argue
that investors and donors should focus primarily
on direct program expenses. This will be the true
cost of implementation once the intervention has
proven itself through the SIB/DIB and the program
is replicated without the independent validator,
intermediary and other secondary stakeholders.
From this perspective, transaction costs are simply
the temporary expenses incurred to validate new
program approaches.
Once the emerging SIB/DIB design has been finalised,
it should be documented in a proposal. A multi-party
agreement should be developed to formalise the
roles of each partner and the governance structure
to be used during implementation. All of this can take
many months to prepare and costs will be incurred
throughout this process (part of the transaction
costs discussed previously). Many of the required
mechanisms and design details have already been
developed by other implemented SIBs/DIBs and it is
recommended that the consortium refers to these
examples to leverage existing lessons. A growing
community of SIB/DIB practitioners is available for
advice and knowledge-sharing around the world.
Please see Appendix C for a list of recommended
groups and websites.
Step 4
Conduct legal due diligence
Once an overall design has been outlined and the
contents of a multi-party agreement have been
established, legal advisors are required to review
the documentation to ensure all relevant risks are
identified and mitigated. DIBs in particular may have
complex legal implications, given the cross-border
nature of these agreements.
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Past practitioners recommend having a detailed
and comprehensive multi-party agreement,
especially the sections that address actions to be
taken if expected social outcomes are not achieved.
When previous SIBs/DIBs have failed in their
implementation, the lack of clarity and detail in their
multi-party agreement can create additional problems
and prolong disputes. Clauses for corrective action
and even the termination of a SIB/DIB program
should be clearly defined, including an allocation of
the costs for these tasks.
As an outcome payer is engaged, it is also important
that any legal agreement signed with them is also
well-managed. A common risk of SIBs, especially
where a government acts as the outcome payer, is
a failure to honour the agreed outcome payments.
Where the SIB/DIB agreement was signed by a prior
government administration, the current government
may disagree with the program and attempt to leave
the initiative. Strong legal agreements can help to
minimise this risk. Overall, consortium members
should ensure they receive high-quality legal advice
to review their agreements. Past practitioners advise
that organisations should be prepared to pay the
costly fees needed for excellent legal support.
Sample SIB Agreement
The City of Denver, Colorado, has made its SIB
agreement from 201618 publicly available. This
can serve as a useful reference for World Vision
and other organisations developing a SIB or DIB.
Hygiene lessons at a World Vision child friendly space in Cox’s Bazar,
Bangladesh. Photo: Jon Warren/World Vision
18 https://d155kunxf1aozz.cloudfront.net/wp-content/uploads/2016/01/DenverSIBContract.pdf
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Step 5
Sign SIB/DIB agreement and
sensitise stakeholders
After the multi-party agreement has been finalised,
all consortium members sign the agreement. It is also
a good opportunity to publicise the achievement
to external stakeholders, promote World Vision’s
brand as an innovative leader and raise awareness
of the partnerships we have established. Equally
important is the need to socialise the agreement
with internal stakeholders. Due to the innovative
and sometimes complex nature of SIBs/DIBs, internal
staff may be confused about what the project is and
how it affects their daily role. For those who are
playing a role in executing the impact bond but who
may not have been closely engaged in the project
design, it is useful to ensure they understand the SIB/
DIB and are excited about the initiative’s potential.
This is important to the impact bond’s successful
implementation.
Step 6
Implement and monitor a social impact
bond/development impact bond
Implementing a SIB/DIB can be relatively smooth if
World Vision and the other partner organisations
are well-experienced with the proposed program
intervention. Even with this experience, however,
there may be unforeseen challenges, especially in the
initial period of implementation. We strongly advise
that World Vision offices closely monitor their impact
bond’s progress to avoid potential issues. This can be
done through regular reports and learning discussions
with relevant stakeholders.
Some SIB/DIB designs provide consortium partners
with a lot of flexibility to change their activities and
address issues during the implementation phase.
While this can be helpful, practitioners should be
careful about radically innovating on their program
intervention while also dealing with an innovative
financing mechanism (the SIB/DIB). This can
compound the complexity and risks within the
project. As previously mentioned, the ideal situation
is to have the implementation issues resolved prior
to establishing an impact bond.
At times, outcome payments are scheduled
throughout the life of a SIB/DIB and early fund
disbursements are used for program expenses in
later phases of the project. Implementing partners
should be extra careful in these cases as operational
problems at the beginning of the impact bond
may create funding shortages at later stages. Close
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monitoring and fast action to resolve potential issues
is particularly crucial in these scenarios.
If needed, some SIB/DIB designs allow intermediaries
to “fire” service providers for poor performance
and replace them with stronger partners. This also
provides an added incentive for service providers
to achieve the pre-determined outcomes. In such
cases, consortium partners will need a list of qualified
substitute service providers and, again, should closely
monitor project progress to support underperforming
service providers or even replace them.
Even without the threat of dismissal, the financial
and reputational stakes attached to a SIB/DIB’s
5.6 Risks of social impact bonds/development impact bonds
All projects carry risks and SIBs/DIBs have a unique set of hazards due to their complexity and distinct approach.
A summary of common risks and their mitigation strategies is included in the table below.
Risk Description
Failure to secure • A large amount of time and resources are
partners or needed to develop a SIB/DIB project (1.5-2
agreement for years and hundreds of thousands if not a
SIB/DIB million dollars), but organisations can still fail
to secure the partners or agreement needed.
• Often, the staff costs devoted to creating
the SIB/DIB aren’t counted towards the
business development expenses, expanding
the total further.
Unintended • Risk of cutting corners to achieve outcome
consequences/ targets.
perverse incentive
• To keep the project simple, it is often advised
to meet outcome
that SIB/DIB designs include a small number
targets
of outcome indicators, but a myopic focus on
these targets can create perverse incentives.
• For example, if the target indicator is the
number of women who participate in a
savings group, staff may be incentivised to
enrol women who have no interest in the
program (potentially reducing the impact
ultimately created), ignore the impact
created with male participants, take women
away from other important tasks/programs
or inadvertently add to the workload and
burden of women participants.
Private Sector Engagement Initiative Toolkit
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outcome targets often motivate service providers
and other consortium partners to exceed the
minimum requirements. Those who have delivered
successful impact bonds regularly say that the clear
goal and focus of the SIB/DIB mechanism pushes
organisations to implement with greater effectiveness
than they would have otherwise achieved. World
Vision offices are highly encouraged to leverage this
trend and use the impact bond’s outcome targets to
align and drive performance among staff members.
Many successful practitioners frame the targets as a
minimum threshold that should be well exceeded,
creating significant social impact for our beneficiaries
in the process.
Mitigation strategies
• Organisational leaders should be aware of the
potential costs of developing a SIB/DIB and be
prepared for the time and resources required.
• Where possible, it is advisable to split the
development costs among consortium
members to minimise financial risk.
• Organisations could also set a limit to the time
and resources they will dedicate to developing
a SIB/DIB, giving their staff a clear deadline for
securing an agreement.
• Choosing a small number of outcome
indicators is advisable, but practitioners should
select these indicators carefully to minimise
unintended consequences.
• It is best to pilot program intervention before
developing a SIB/DIB project to uncover
potential issues and perverse incentives.
• Where unintended consequences may exist,
put safeguards in place to ensure these are
minimised.
• The SIB/DIB design may include a measure
for unintended consequences to ensure they
are kept low.
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Risk Description
Reputational risk • Consortium partners could damage their
of a failed SIB/DIB reputations if they do not achieve their
outcome targets and payments to investors
are not released.
• This will reduce the level of trust afforded to
the organisations when they next attempt
an innovative project, and potential funding
or partnerships (even if unrelated to the SIB/
DIB) may be jeopardised.
Financial risk of a • When a SIB/DIB fails, there is a risk that
failed SIB/DIB consortium partners will not be reimbursed
for expenses already incurred (e.g. staff with
contracts for the full project period, vehicle/
office costs).
• Financial risks to investors are not included
here. Investors should be aware of the risks
to their funds and a financial loss due to a
failed SIB/DIB is always a potential outcome.
New government • Where governments are the outcome
dishonours SIB/DIB payer for a SIB/DIB, it’s possible for a
agreement new government administration to try
to remove themselves from the impact
bond agreement.
Little accountability/ • Whether or not the consortium achieves
incentive for its outcome targets, intermediaries receive
intermediaries or fees from investors for their services.
service providers • Similarly, there is a risk that service providers
may be satisfied in receiving funds to
implement their activities with little regard for
whether the outcome targets are achieved.
• The same is true for independent
validators, but these actors should not be
incentivised for a successful outcome; they
must instead offer an objective measure of
the project’s success.
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Mitigation strategies
• Piloting a program intervention before
developing a SIB/DIB is critical to identifying
potential implementation issues. The impact
bond design should replicate the conditions
of the pilot as closely as possible to avoid
unforeseen problems.
• Closely monitor implementation of the SIB/
DIB to identify and resolve potential issues
before they become a major problem.
• Consortium members can try to lower
expectations regarding the SIB/DIB and
remind stakeholders of the risk associated
with innovation, but this may create an
impression that the implementers themselves
have little confidence in the project.
Practitioners should use this tactic cautiously.
• It is important that consortium members and
their legal representatives pay close attention
to the clauses in the SIB/DIB agreement
that deal with project failure. Responsibility
for outstanding financial expenses will be
addressed here.
• Too often, organisations do not want to think
about the possibility of a failed SIB/DIB and do
not devote enough attention to this scenario.
• Where possible, consortium members should
ask for advanced funding for their expenses to
minimise financial losses.
• It is important that consortium members
and their legal representatives ensure that
new government administrations are bound
by the SIB/DIB agreement to honour their
responsibilities.
• Enlisting advocates within the government,
but also in key constituencies that appeal to
all political parties, is helpful too.
• The SIB/DIB design can include an option to
replace service providers who underperform
or fail to achieve their outcome targets, aligning
their incentives with the impact bond’s success.
• To incentivise success among intermediaries,
consortium members can tightly align the
intermediary’s reputation to the project’s
outcome, influencing future opportunities
for SIBs/DIBs.
• Practitioners should also be careful that
the pressure to reach a successful outcome
does not create a perverse incentive or
unintended consequence that undermines
the intended impact.
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5.7 Lessons from past social impact
bond/development impact bond
practitioners
With a growing number of SIBs and DIBs
implemented around the world, there is an
expanding number of firsthand lessons shared among
practitioners. Some of these insights are shared
below for World Vision offices considering a SIB/DIB.
Know your intervention
Practitioners should use an intervention that they
know extremely well. Ideally, the innovation within
a SIB/DIB project should be the financing mechanism,
not the program intervention. For this reason, it
is strongly advised that organisations pilot their
proposed intervention if they do not have strong
experience with it. Using a little-understood program
approach for a SIB/DIB exposes the project to
implementation risks and adds to the challenge and
complexity already created by the impact bond
mechanism. Where further innovation and iteration
is required, a deep understanding of program
intervention will also help practitioners avoid
costly mistakes.
Ensure interest from outcome payers
Given the immense time and cost needed to develop
a SIB/DIB, it is important to know early on that
there is interest from potential outcome payers. This
can be accomplished by engaging potential payers,
understanding their criteria for impact bond projects
and inviting them to help co-create the SIB/DIB
where appropriate. World Vision Australia has spent
time, effort and expense building a DIB, starting with
piloting the initiative and identifying the intermediary,
but the lack of an outcome payer prevented the
initiative from going forward.
Currently, SIBs/DIBs have yet to become a widely-
used tool among governments and donors.
Organisations playing the role of outcome payer are
often more innovative, risk-tolerant funders who
wish to demonstrate the viability of a SIB/DIB for
the rest of the sector. As such, World Vision offices
should approach philanthropic foundations and the
innovation teams within large donors (e.g. United
Nations, World Bank, bilateral donors) as potential
outcome payers. PBCs, as explained in Section 1 of
this module, can also serve as a less-costly alternative
for engaging outcome payers, especially if they are
new to RBF or the proposed intervention.
Private Sector Engagement Initiative Toolkit
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Opinions differ on SIB/DIB consultants
There are a number of consultancies available to
help stakeholders design and launch an impact
bond. These organisations offer advice and support
services in developing a SIB/DIB, instead of actively
overseeing the implementation as an intermediary
does. However, some consultancies may also
serve as intermediaries. While some experienced
implementers recommend hiring a strong SIB/DIB
consultant to help your organisation build an impact
bond project, others have questioned the cost of
these advisors. It is recommended that practitioners
conduct proper research by obtaining a wide number
of perspectives on the value of SIB/DIB consultants
and by compiling a strong list of potential consultants
to consider. They should be clear about the capacity
gaps that SIB/DIB consultants should fill and have
a deep understanding of the costs and staff time
required by the advisors.
Base outcome payments on
a few clear indicators
To reduce the complexity of a SIB/DIB project, past
implementers often recommend the use of only a
few outcome targets and indicators. This minimises
the costs for independent validators and establishes
a clear decision for the disbursement of funds,
avoiding potential conflicts between the stakeholders.
At the same time, consortium partners need to
select these indicators carefully to ensure they do
not create perverse incentives. The pressure to
achieve the outcome targets may unintentionally
motivate staff members to take actions that burden
our beneficiaries and undermine social impact. This
is highlighted in the previous table section on risks.
A temporary learning centre set up by World Vision following the
2015 Nepal earthquake. Photo: Max Greenstein/World Vision
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Case study
Mini Moto clean cookstoves were promoted through this DIB project
in Myanmar. Photo: World Vision
Myanmar Clean Cookstove DIB
As early as 2014, World Vision Australia
was actively exploring opportunities
to leverage its experience with clean
cookstoves to engage impact investors
and private capital.
Under the Australian Government’s Australian
NGO Cooperation Program and the Private Sector
Engagement Initiative funded by World Vision’s Global
Resource Development Innovation Fund, World Vision
Myanmar collaborated with World Vision Australia to
develop the Myanmar Clean Cookstove DIB, beginning
in 2015.
The project aimed to promote and distribute clean
cookstoves that eliminate air pollution caused by
charcoal and wood fires commonly used in rural
communities. In addition to removing the harmful
health effects caused by these fires, the cookstoves
enhance environmental sustainability and local
livelihoods by burning pellets made from rice husks.
To monetise the health benefits generated by the
cookstoves, the team designed a DIB to measure and
sell this social impact to an outcome payer such as a
government or foundation. World Vision Australia
collaborated with world-class universities to establish
a metric for cookstove health outcomes and planned
for a recognised global body to certify these results.
Private Sector Engagement Initiative Toolkit
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A pilot of the cookstoves at subsidised prices also
showed promising results among rural communities,
however competition in the cookstoves market
remained a concern. Under the pilot, World Vision
helped interested community-based organisations
become local vendors for the cookstoves, where the
income would enable local communities to generate
funds for self-managed community projects.
The team had succeeded in finding an investor who
was willing to finance the DIB, but developing a viable
distribution strategy for the stoves and securing an
outcome payer remained challenging as of June 2019.
A consultant was retained in Myanmar to recommend
three potential business models for the distribution,
expansion and financial sustainability of the stoves.
After interviewing various stakeholders and conducting
a detailed economic analysis, the consultant concluded
that the lowest feasible retail price would still be
costly for households targeted by World Vision and
an ongoing subsidy was required. It is possible that
outcome payments for the health benefits could
provide this subsidy, but upfront capital for the stoves
would be needed and the team still required an
outcome payer.
Since the cookstoves reduced the amount of firewood
used, carbon credits were also considered as an
additional outcome payment. Discussions commenced
with an international foundation to join their carbon
credit subsidy program for cookstoves in Myanmar.
However, this opportunity was ultimately deemed
impractical. The foundation had yet to sell any carbon
credits for the existing cookstoves in their program
and upfront funding was required for the full price of
the stoves before the credits were sold. The volume
of cookstoves and high market price for carbon needed
by this strategy also placed the success of this strategy
in doubt.
Finding an outcome payer who would pay for the
health benefits generated by the cookstoves was the
best approach for subsidising the retail price, but an
appropriate partner could not be found before the
project’s funding was exhausted in June 2019. Unlike
carbon credits, which have an established global
market, selling health outcomes from avoided smoke
inhalation would be a pioneering effort.
The International Finance Corporation, a member of
the World Bank Group, is implementing an RBF project
focused on solar lamps in Myanmar.
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Case study (continued)

Both World Vision Australia and World Vision
Myanmar engaged this office about becoming an
outcome payer for the health and environmental
benefits of cookstoves. While the representatives
were interested in further reviewing of the opportunity,
no concrete commitments were made.
World Vision Australia and World Vision Myanmar
agreed to close out the project and disseminate lessons
learned, but will revive the opportunity if a viable
outcome payer is found in the future. Scenarios such as
these are a natural part of the innovation process and
the partnerships, capacity and impact measurement
approaches developed through this project may prove
useful for other initiatives.
The distribution network developed for the cookstove
DIB, for example, is already a key asset in other private
sector partnership discussions initiated by World Vision
Myanmar and World Vision Australia. A local company
that sells off-grid solar lights to rural households is
interested in partnering with World Vision to use
community-based organisations as distribution partners,
an approach developed by the cookstove project.

5.8 Conclusion
SIBs and DIBs are a good tool for interventions
that have strong evidence but limited adoption
or funding by donors. Significant time and cost is
required to establish SIBs/DIBs, but they are meant
to be an intermittent solution that demonstrates the
effectiveness and reliability of emerging evidence-
based programs and helps them achieve the scale
they need. They are also a unique approach that
attracts private capital to social programs that do
not normally generate income.

As the number of SIBs/DIBs grows around the world

and processes become more efficient, the time and
cost required to establish these projects will hopefully
decline. World Vision’s efforts to further enhance our
evidence base and tri-sector partnerships (e.g. private
sector, government and philanthropy) will place us in Clean water supply in Gicumbi District, Rwanda. Photo: Jon Warren/
a stronger position to leverage this mechanism. World Vision

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World Vision Australia
Appendix A:
Results-based financing instruments
This guide provides an overview of two kinds of RBF instruments, but there are many other types available. The table below
from the Instiglio/World Vision guide to RBF 19 summarises these instruments and offers some context as to where
PBCs and SIBs/DIBs fit within the wider category.
Instrument Definition
Performance A third party buys down
debt buy-down all, or part, of a loan
between the government
and a lending organisation
if pre-defined results are
achieved.
Performance- A development bank
based loan provides a loan to
a government with
disbursements conditioned
upon the achievement of
pre-defined results.
Cash on delivery/ A multilateral agency or a
results-based aid foreign government awards
funding to a government
if pre-defined results are
achieved.
19 https://www.payforsuccess.org/sites/default/files/resource-files/RBF_PractitionersGuidebook_Instiglio_18Oct2017.pdf
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Results-based financing module
Risk
Example
transferred to
Central National HIV/AIDS Prevention and Support Project
government in Botswana. In 2008, the Government of Botswana
agreed to finance efforts to tackle its HIV/AIDS
epidemic through a US$50 million International
Bank for Reconstruction and Development (IDRB)
loan, and concurrently reached an agreement with
the European Commission to buy down the IDRB
loan contingent on meeting certain targets. The
European Commission agreed to provide up to 15
million euro which, if targets were reached, would
reduce the effective interest rate of the loan to 0%,
and contribute roughly US$3 million towards the
principle repayment. Performance targets for the
government included increasing condom use and
awareness of HIV transmission among young people.
Health Millennium Development Goals Program-
for-Results Project in Ethiopia. The World Bank
supports the Government of Ethiopia’s Health
Sector Development Program (HSDP) by disbursing
credit against achievement of a subset of the
HSDP’s key objectives. Through the project the
government can receive a maximum of US$100
million, depending on its performance against a set
of eight indicators. The indicators include health
outcomes, such as the proportion of deliveries
attended by skilled birth providers, and outcomes of
institutional reforms, such as increased transparency
in pharmaceutical procurement processes.
Poverty Reduction Budget Support to the
Government of Sierra Leone. Between 2013
and 2015, the UK’s Department for International
Development incentivised improved public financial
management in Sierra Leone by partially tying
budget support to the outcomes of institutional
reform. Funding was provided in the form of a
fixed annual amount plus an additional payment
contingent on reaching targets for a range of financial
management indicators, from discrepancies between
annual and budgeted expenditure on health,
education and road maintenance to the proportion
of tax payers filling tax returns on time.
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World Vision Australia
Instrument Definition
Performance- A central government
based grant rewards resources to a local
government if pre-defined
results are achieved.
Performance- An outcome payer
based contracts conditions part of its
payment to a service
provider based on
the achievement of
pre-defined results.
Price-based An outcome payer opens a
challenges competition that awards a
pre-defined financial prize
for the best innovation
developed in a pre-defined
timeframe.
Social Impact An investor provides
Bonds (SIB) & upfront capital to a service
Development provider and only gets paid
Impact back by the government
Bonds (DIB) (SIB) or founder (DIB) if
accountability/ the pre-defined results
incentive for are achieved.
intermediaries or
service providers
Private Sector Engagement Initiative Toolkit
Results-based financing module
Risk
Example
transferred to
Local government The District Development Fund in Lao. The District
Development Fund is the mechanism through
which the Government of Lao transfers funds from
the central level to the district level. Since 2012,
amounts transferred to districts have been based
on performance in areas such as planning and
budgeting, financial management and procurement,
accountability and transparency.
Providers (public Escalera in Mexico. Escalera delivers high school
and private) preparation curriculum kits to public schools one
year before high school enrolment to help students
make informed decisions regarding high school
enrolment. In 2014, Escalera signed a Performance-
Based Contract with the Government of Chiapas,
which paid for each additional student that enrolled
in high school because of the program.
Greenhouse Gas Emissions Reduction Pilot in
Vietnam. AgResults, a partnership between several
bilateral funders, the World Bank and the Bill and
Melinda Gates Foundation, is incentivising innovation
to reduce greenhouse gas emissions and increase
yields in Vietnamese agriculture by awarding
cash prizes to the best solutions as part of the
competition. In the first phase of the pilot, selected
implementers scale their solutions, competing to
win prizes of up to US$1million based not only
on emissions and yields, but on the number of
smallholders reached.
Investor The Educate Girls Development Impact Bond in
India. In 2015, Educate Girls, a high-performing
service provider, received upfront investment
capital from UBS Optimus Foundation to expand
education services to about 15,000 children. UBS
Optimus Foundation’s investment will be repaid
with a return by the outcome payer, Children’s
Investment Fund Foundation, if Educate Girls’
intervention reaches targets for enrolment
among out-of-school girls and improvement in
test scores.
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Appendix B:
KITAB case study
KITAB case study – understanding performance-based incentives
(An RBF approach)
For many parts of Nepal – and in many
other developing countries – there is a
lack of access to reading books in schools.
While textbooks are often available, these
additional reading materials are scarce and
this in turn can limit children’s ability to
learn. Already in Nepal only six out of 10
people can read or write.20 The issue of a
lack of reading books is not just a matter of
affordability for schools, though that can be
an obstacle too, but one of a broken supply
chain. Even if a school has sufficient funds for
books, they may be disconnected from book
suppliers and publishers far away in the city.
Project areas in Nepal
Morang:
Sunsari:
20 https://en.unesco.org/countries/nepal
21 NEGRP document of Ministry of Education Nepal. p. 9
https://www.moe.gov.np/assets/uploads/files/NEGRP_Final_Document.pdf
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In Nepal, government statistics show that most schools
do not have book corners in classrooms, where additional
reading materials are kept for teachers and students to
use for learning. This is despite book corners being one
of the Ministry of Education’s five prioritised minimum
enabling conditions for schools.21 Schools also have a per
child fund provided by the government that should be used
to ensure the prioritised minimum enabling conditions are
implemented. However, these funds are rarely allocated
towards more reading books for schools, due to other
spending priorities and a lack of awareness about the
prioritised minimum enabling conditions and the value of
book corners.
Questions for participants
1. What kind of traditional development program
approach do you think would normally be used
to get more books into schools?
2. Do you think this traditional development
program approach would result in a sustainable
solution to this problem? Why or why not?
Kathmandu
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World Vision Australia
Instalment 1: A potential results-based
financing solution
A funding opportunity has been presented from the World
Bank, calling for projects that strengthen the evidence base
for RBF’s impact on the education system by improving
access to quality reading books. World Vision Australia
and World Vision International Nepal worked together to
design a project that aims to fix the supply chain of books
from publishers to schools using an RBF approach. The
project is named Knowledge Improvement Through Access
to Books – or KITAB, which is the Nepali word for “book”.
A brief overview of the project design is as follows.
Project target areas:
898 government schools in Morang and Sunsari (two
districts in the south east of Nepal).
Project aim:
To transform the book market for schools in the two
districts of Nepal using a digital marketplace – like a local
Amazon. This online platform is to be built by World
Vision International Nepal’s Innovation Lab and it will
be used to connect schools and publishers in order
to improve the way books are developed, procured,
produced and supplied.
RBF component:
RBF can take on several different forms, but in this project
it involves payments and incentives built into the book
supply chain. These are provided to schools, publishers
and local municipalities to reward the part they each will
play in getting more books into schools. These rewards
are given based on a pre-defined result that each of these
stakeholders will be made aware of and need to fulfil to
receive the reward.
Students from one of the 898 government schools in Nepal targeted by the KITAB project. Photo: World Vision
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Questions for participants
1. What kind of RBF approach does this project
use? (Hint: DIB/SIB/performance-based
incentives)
2. Do you think this approach is better than the
other RBF alternatives? Why or why not?
3. Why was the donor wanting to implement
an RBF solution as opposed to a typical grant
program? What would be the advantages of an
RBF solution?
4. Do you think this RBF approach could produce
a sustainable solution to the broken supply chain
of books for these two project areas in Nepal?
Why/why not?
5. What incentives do you think could be given to
the different stakeholders? Do you think they
should be monetary or in kind?
6. What pre-defined results do you think each of
the stakeholders should be asked to produce in
order to receive their incentive?
7. Do you think the incentives you outlined above
would change the behaviour of the stakeholders
in the supply chain of books to result in more
books in schools?
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Instalment 2: The project design Municipality education heads

The incentive framework
The project proposal put forward to the donor was
successful in winning funding for a two-year implementation
period! Now the World Vision Australia and World
Vision International Nepal teams must work together to
determine the incentives to be given to each stakeholder
in the supply chain of books to result in the ordering
of books, the establishment and maintenance of book
corners, and, to some degree, the use of book corners.
A consortium of five publishers was formed and the project
team extensively consulted all stakeholders to analyse their
motivations to determine the most appropriate incentives
to produce results. For each stakeholder they decided on
the following incentives, which were conditional upon their
achievement of the pre-defined thresholds of results. Some
of these incentives are payments, some are in kind, and
some are incentives of recognition.
Publishers
• US$20 for every Nepali language title uploaded onto
the KITAB Bazar platform.
• Five percent of the total order value for titles that are
delivered on time to the local municipalities.
• Publishers must upload at least 10 titles each onto the
KITAB Bazar platform in order to be eligible for the
above incentives.
• The total number of book titles to be uploaded by all
publishers together is 100.
• Beyond these incentives, publishers also gain access to a
new sales channel.
• Three assessment visits to schools will be conducted
annually by the education heads. After completing a
day of assessment visits and providing an assessment
report, they will receive US$15, which is equivalent to
government per-diem policy.
• These visits are to check on the existence and use of
book corners in schools.
Principals
• A mobile library bag to store books and carry them
between classrooms will be provided to principals
for schools that have been found to be using the
book corners during all three visits by municipality
education heads.
• An educational kit: a set of teaching materials will be
awarded to encourage the use of the book corners.
This will be provided once during the project lifecycle
after three visits by the municipality education head, if
schools have been found to be using the book corners
in two out of three visits.
• A letter of appreciation for up to three principals per
municipality for those who best contributed to the full
functioning of book corners. These rewards will be
given out once a year.
Schools
All the 898 schools in Morang and Sunsari have been
categorised by the project team into two broad categories:
category A represents “vulnerable” and category B
represents “non-vulnerable” schools. See the below table
for an explanation of these incentives for category A and B
schools.

Category A schools Category B schools All schools

Establishment These schools are required to order a
incentive minimum of 15 books (five per grade)
through the KITAB Bazar to receive
135 additional books as an incentive
(45 per grade).
These schools are required to There is a cap of a
purchase a minimum of 30 books maximum 45 additonal
(10 per grade) through the KITAB books per class and
Bazar to receive 120 additional books 135 bonus books per
as an incentive (40 per grade). school.

Maintenance Will receive additional books at 1:1 ratio in There is no maintenance incentive for N/A
incentive the second period of ordering in the project. category B as these are considered
For example, if they order five books, they “non-vulnerable” schools.
will receive five bonus books. There will be
a cap of a maximum five bonus books per
class and 15 bonus books per school.

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How the KITAB Bazar works
In addition to designing the incentive model of the RBF
framework, the project team also designed and developed
the KITAB Bazar platform to facilitate the overall process
of selecting, ordering and purchasing books for children by
schools. The incentive payouts will also be determined by
the KITAB Bazar system providing accurate, and unbiased
calculations.
KITAB Bazar has the following users:
• schools – responsible for ordering the books;
• local municipalities – responsible for approving orders;
and
• publishers – responsible for uploading books to the
online platform.
The KITAB Bazar platform will be available for a period
of one month. The first round of orders for the project
will occur in the first year, followed by a second round of
orders the following year with a similar period of operation.
The project design set these two order periods to ensure
the pooled procurement of books would provide printing
efficiencies, making books cheaper for publishers to print
and thus cheaper for schools to buy.
A dashboard on the KITAB Bazar platform will also assist
in the monitoring and evaluation of the project. This will
calculate the orders of the books in real time for each of
the 898 schools in the two districts.
See the following diagrams for more detail on how the
incentives and the KITAB Bazar platform work.

How it works

1. 2. 3.

School places Municipality verifies Publisher receives

purchase requests the requests the order

Incentive is
calculated for
the school

4. 5. 6.

Publisher prints/ Municipality receives School receives

dispatches the order the order and provides the books from
cheque to publisher municipality and
verifies delivery

Incentives are separately sent

to municipality by World Vision
International Nepal

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World Vision Australia Results-based financing module

Other features

Incentive calculation Monitoring and evaluation SMS based delivery

for schools and dashboard according verification mechanism
publishers to requirements of
M&E team

Screenshot of KITAB Bazar platform

Questions for participants

1. Do you think these RBF incentives will be enough to 4. Are there any risks with the project’s design?
encourage these stakeholders to play their role in Are there potential unintended consequences or
improving the supply/demand of books into schools? implementation risks?

2. Which incentives do you think are the strongest and
which do you think might be weak?
3. Identify which incentives are provided as financial
payments, which are in-kind payments, and which
are incentives of recognition. Why do you think
these different types of incentives were used?
5. Do you think these incentives would work in your
National Office’s country context? Why or why not?
What tweaks do you think would be necessary?
6. What obstacles do you think this technology solution
of the KITAB Bazar might face in Nepal? What
obstacles would it face in your National Office’s
country context? Do you think it would be successful
if applied there?

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World Vision Australia
Instalment 3: Challenges and lessons
A. Lack of clarity around RBF
As RBF was a new concept for the project team,
there was a steep learning curve in applying an RBF
framework to a project. There was some confusion
around what elements of the project RBF applied to.
It was well understood that an RBF framework was
to be applied to stakeholders within the project. But
initially it was not clear whether the donor’s payments
to World Vision throughout the project were also
conditional upon the achievement of results. After
further engagement with the donor, it became
clear that tranches of funding would be tied to the
deliverables of the project, which were in the form
of three project reports sharing the project’s baseline,
mid-term and endline results. Funding would not be
tied to outcomes achieved by the project in terms
of the number of books ordered via the KITAB
Bazar platform.
B. Access to the platform and tech literacy
Before the KITAB Bazar platform could be
launched for schools to purchase books, publishers,
municipality education heads and schools needed to
learn how to use it. While the five publishers and 29
municipalities were relatively easy to reach, it was
a big challenge to reach all 898 school principals.
But the project team mobilised throughout the two
districts and over a few weeks managed to include
99 percent of schools in their sessions, also providing
an instruction manual to attendees and those who
missed the sessions.
The two project districts had been selected due to
their good cellular networks, so internet coverage
was not a significant issue for using the platform via a
smartphone or computer. However, not all platform
users had smartphones, and many had low levels
of technological literacy. Despite these obstacles,
due to the continued tech support and regular
communication with users by the project team, when
the KITAB Bazar was launched, 92 percent of the
898 schools used it to order books during the 30-day
period allowed for orders. This was considered a
big success for the project.
Private Sector Engagement Initiative Toolkit
Results-based financing module
C. Monitoring and evaluation challenges
A large component of this project was to test
whether RBF is an effective approach in improving
access to reading materials and to strengthen the
evidence base for the impact of RBF. However, as this
approach is new, it was unclear as to how exactly RBF
should be monitored and evaluated. As a result, the
required monitoring and evaluation framework was
more complex than usual. Results from the baseline,
mid-term and endline were to be measured and
provided to the donor in reports.
However, a lack of clarity existed in the monitoring
and evaluation framework and there were different
understandings of what was required between World
Vision Australia and World Vision International
Nepal. This included confusion about the extent
to which measuring RBF should be included in the
framework, when due dates of deliverables/data
collection should be, which indicators and thresholds
were appropriate, and which data sources should
be used.
This lack of clarity was also a result of many staff
changes. A series of discussions was required over
many months, well after the commencement of
the project, to finalise the document. Eventually a
monitoring and evaluation narrative was also drafted
to guide the monitoring and evaluation process
by making the deadlines and requirements clearer
to both World Vision Australia and World Vision
International Nepal.
D. Managing donor expectations
The World Bank donor for this project was based
in Washington, however, the National Office had a
strong relationship with the Nepal representative
of the World Bank. The Nepal representative had
different priorities about the aims of the project,
including an integrated approach, with more emphasis
on the use of books and learning outcomes to be
incorporated into the project. While this was a
worthy suggestion, the scope and funding outlined by
the Washington donor was clear that only one aspect
of Nepal’s education obstacles would be tackled
by the pilot project: the lack of reading materials in
schools and whether an RBF approach will help solve
this problem. As a result, the expectations of the
local donor representative needed to be carefully
managed while ensuring that the Washington donor’s
expectations were met. Clear communication was
required to ensure everyone from World Vision
(Nepal and Australia) and from the World Bank
(Washington and Nepal) was aligned.
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World Vision Australia
Questions for participants
1. What do you think were the main factors in bringing
about this project’s success of 92 percent of schools
ordering books via the KITAB Bazar?
2. If you were designing a monitoring and evaluation
framework for this project, what challenges do you
think you would encounter in measuring the impact
that RBF has had in improving the supply/demand for
books? What ideas do you have to overcome these
challenges?
3. Why was there an initial lack of clarity around RBF
in this project and why was the payment to World
Vision by the World Bank not an RBF payment?
What in the project did constitute RBF?
Head teachers in a training session on how to use the KITAB Bazar
platform on a smartphone.
Private Sector Engagement Initiative Toolkit
Results-based financing module
4. To replicate the successes and avoid the challenges
encountered by the KITAB team, what should the
project manager do on the next RBF project? What
practices would you keep and what would you
change?
5. One of the aims of this project is to provide a
sustainable solution to fixing the supply chain of
books into schools. After this project has concluded
how do you think World Vision could hand over the
platform to ensure it continues to be used? Who
do you think would be best placed to manage the
platform?
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Appendix C:
Recommended resources
Fritsche, György Bèla, Robert Soeters and Bruno Meessen. Social impact bond/development
“Performance-Based Financing Toolkit”, World Bank Training,
The World Bank. impact bond sector resources, portals
“Funding for Results: How Governments Can Pay for
and communities
Outcomes”, Beeck Center for Social Impact and Innovation, Brookings Institution impact bonds resources
Georgetown University.
Center for Global Development (CGD) DIB resources
“A Guide for Effective Results-Based Financing Strategies”,
The World Bank, 2018. Center for Global Development (CGD) DIB working group

“A Guide to Best Practices for Performance-Based Service Field resources from Social Finance
Contracting”, United States Office of Management and Budget
(OMB), 1998. Global Partnership for Results-Based Approaches (GPRBA)

Gustafsson-Wright, Emily and Izzy Boggild-Jones. “Paying for
Social Outcomes: A Review of the Global Impact Bond
Market in 2017”, The Brookings Institution, January 17, 2018.
Gustafsson-Wright, Emily et al. “The Potential and Limitations
of Impact Bonds: Lessons from the First Five Years of
Experience Worldwide”, The Brookings Institution, July 2015.
Instiglio Database of RBF
International Capital Market Association (ICMA)
resource centre for green, social and sustainability bonds
United Nations Development Programme (UNDP)
social and development impact bonds resource

“Impact Bonds in Development Countries: Early Learnings

from the Field”, The Brookings Institution, 2017.

“Investing in Social Outcomes: Development Impact Bonds”,

Center for Global Development, 2013.

Loevinsohn, Benjamin. “Performance-Based Contracting

for Health Services in Developing Countries: A Toolkit”,
The World Bank, 2008.

“A Practitioner’s Guide to Results-Based Financing: Getting

to Impact”, Instiglio and World Vision, 2017.

“Results Based Financing in Health (Self-paced)”,

The World Bank.

“Results-Based Financing in the Energy Sector : An Analytical

Guide”, Vivid Economics, 2013.

Turley, Laura et al. “Performance-Based Specifications:

Exploring When They Work and Why”, International Institute
for Sustainable Development, 2014.

Private Sector Engagement Initiative Toolkit 043

This module was produced by the New Business Team at World Vision
Australia as part of the Private Sector Engagement Initiative Toolkit.
It was written by Gordon Chan with contributions from fellow team
members Sandra Carvajal and Jane Hosking.
For questions about this module you can contact the authors:
Gordon.Chan@worldvision.com.au
Sandra.Carvajal@worldvision.com.au
Jane.Hosking@worldvision.com.au
AUSOPDNewBusinessTeam@worldvision.com.au

Disclaimer: This Public Sector Engagement Initiative Toolkit is intended for internal use within World Vision only.
It reflects insights from World Vision Australia and is intended to complement the other private sector
engagement and partnership tools and resources developed across World Vision International.

© October 2019 World Vision Australia. ABN 28 004 778 081. All rights reserved. Ref # 8793