What are social outcomes partnerships?
IMPACT 101: ‘Social outcomes partnerships’ is the new term – at least in some countries – for ‘social impact bonds’. But what are they exactly? And what are outcomes funds? Michael Gibson and Andreea Anastasiu from GO Lab have the answers.
What are social outcomes partnerships?
Michael Gibson & Andreea Anastasiu: Social outcomes partnerships are cross-sector partnerships that respond to deep social issues – like youth unemployment and homelessness – by pursuing measurable social outcomes.
They are defined by two key characteristics:
1. Payment for social or environmental outcomes achieved – in other words, they involve an outcomes contract (as opposed to a contract that simply pays for activities or inputs).
2. Upfront, repayable finance provided by a third party – typically a socially motivated investor. The repayment is (at least partially) conditional on achieving specified outcomes.
These partnerships bring together three core partners: an outcome payer, a service provider and an investor. Others are often involved, such as evaluators, performance management experts and technical advisers.
‘Social impact bond’ was the original term for this funding model, but a desire to distinguish it from traditional (financial) bonds – something quite different – led many to refer instead to ‘social outcomes contracts’. In 2023, the UK government went a step further and, in a nod to the intentionally cooperative nature of these approaches, adopted the term ‘social outcomes partnerships’. Elsewhere they are referred to as ‘pay-for-success’ (the United States) or ‘social benefit bond’ (Australia). In many other parts of the world ‘impact bond’ remains the most used label.
There are also other kinds of outcomes or results-based funding, but these don’t necessarily involve a social investor providing upfront financing.
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How widespread are they?
MG & AA: In the past 15 years, over 300 social outcomes partnerships (or impact bonds) have been launched in places as diverse as India, South Africa, France, Portugal, Japan, Cameroon, Argentina and many more. They have been used to address a diverse range of social challenges – from tackling and preventing homelessness, to addressing unemployment, reducing recidivism, improving education outcomes and promoting healthy lives. Data on social outcomes partnerships is available on GO Lab’s Knowledge Hub.
Many of these projects have been supported through dedicated outcomes funds. The UK has been at the forefront of innovation in outcomes funding, and hosts the largest number of outcomes funds globally – ten to date, out of a total of 21 across the world. The scale of these funds varies significantly, as does the way they are implemented on the ground.
Over 300 social outcomes partnerships (or impact bonds) have been launched in India, South Africa, France, Portugal, Japan, Cameroon, Argentina and many more
So what exactly is an outcomes fund?
MG & AA: Outcomes funds provide dedicated funding to pay for social outcomes. These funds are typically structured to support multiple, separate outcomes-focused partnerships that are developed and managed in parallel. Outcome funds use a range of approaches to identify or allocate funding to suitable social outcomes partnerships. In the UK, this tool has been used to improve accountability and efficiency in public spending.
They pool funding from multiple sources (often government but can also include non-state organisations) to pay for the successful delivery of outcomes, with disbursal of funding contingent on results. Outcomes funds are not investment funds (there is no expectation of financial return). Projects ultimately supported by an outcomes fund may involve social impact investment as pre-financing for service providers to implement social programmes.
How significant are outcomes funds?
MG & AA: The largest outcomes fund implemented to date in the UK is the Life Chances Fund which concluded in March 2025 – a £70m programme supported by the Department for Media, Culture and Sport to help people who face the most significant barriers to leading happy and productive lives. This ran for nine years and supported over 50,000 people across England through 29 social outcomes partnerships. In July 2025 the UK government announced a new, much larger fund – the £500m Better Futures Fund – which will support vulnerable children and families across England.
Outcomes funds have also been used in Portugal, the Netherlands and the USA. Since 2020 the approach has also been applied in Latin America (Colombia), sub-Saharan Africa (Ghana and Sierra Leone, South Africa), the Caribbean (Haiti) and Australia. Further funds are in development in countries such as Nigeria, Tunisia, and Rwanda.
What are the advantages of outcomes funds and social outcomes partnerships? Why have they become more popular recently?
MG & AA: Amid growing pressure on public budgets and cuts to development aid, outcomes-based funding models are increasingly seen as a way to bring more accountability and efficiency in public spending and philanthropic funding.
Outcomes funds allow multiple outcomes contracts to be set up, which in turn might deliver a range of benefits including improved efficiency, cost-effectiveness, innovation, accountability, systems-level planning and responsiveness.
Outcomes models such as social outcomes partnerships can respond to a range of implementation, co-ordination and accountability challenges. But standalone outcome-based projects can be expensive and time-consuming to design and launch. This has limited their use to date. Outcomes funds promise to address some of these challenges and offer a route to scale, increasing the amount of funding, the number of projects and stakeholders involved, and the number of service users reached by outcomes funding models. Other motivations for the use of outcomes funds include economic efficiencies (by reducing the transaction costs of developing complex partnerships); redirecting funds from ineffective projects to those that achieve demonstrable, measurable results; and accelerating learning about innovative interventions and/or outcomes funding itself.
From our research at the GO Lab, we have seen that social outcomes partnerships can enable more adaptive, accountable and person-centred services that place meaningful outcomes at their core. However for these benefits to be realised, social outcomes partnerships need to be carefully designed and managed. This entails:
- clearly specifying outcomes that can be reliably measured and are meaningful for participants;
- engaging stakeholders early and consistently;
- providing flexibility for innovation and data-led adaptation.
Outcomes funds offer a route to scale, increasing the amount of funding, the number of projects and stakeholders involved, and the number of service users reached
What are the main criticisms of social outcomes partnerships and outcomes funds? In what contexts do they not work?
MG & AA: Social outcomes partnerships are not a silver bullet for tackling complex social problems. Investors may only break even, or may make a loss on their investment, depending on the results of the programme. Social outcomes partnerships will not be appropriate for every situation, and their potential to achieve the benefits described above will depend on a range of contextual factors.
When it comes to outcomes funds, funders must ensure that various core capacities – the ability to pool funds to credibly pay for outcomes, motivate the development of long-term and sustainable cross-sector partnerships, and give assurances around risk management – can be fulfilled across the life of the fund. Administrators (typically a particular team within the organisation hosting the fund) must be able to set aside funding to pay for outcomes when they are achieved, call for suitable project proposals, select successful proposals, and ultimately pay for the achievement of measurable social outcomes. If these capacities are missing, then the administrators may be unable to properly steward the fund.
From our analysis of these funds, we’ve found some key ingredients for success:
- clear goals that are well aligned with broader government priorities;
- robust shared data systems that ensure outcomes are measured effectively;
- adaptive funding models that help tailor solutions to local needs and participant ambitions.
To achieve long-term impact, any new outcomes funds will need to invest in capacity building at local level and prioritise learning and evaluation.
How do we know social outcomes partnerships work? What are the limitations of this evidence?
MG & AA: The evidence underpinning social outcomes partnerships has developed considerably since 2010, when the world’s first such programme was launched. We now have a much better understanding of when and how these innovative funding models can be helpful. While evidence gaps remain, several studies published to date point to similar findings. They show that, despite being challenging to develop, social outcomes partnerships can:
- sharpen partners’ focus on outcomes,
- align partners’ priorities,
- encourage the use of adaptive, data-led management to respond quickly when implementation is off-track,
- enable frontline staff to adopt a more person-centred and tailored approach to delivering services.
For many of the outcomes funds supported by the UK government, in-depth evaluations are available. Earlier this year the National Lottery Community Fund published the final evaluation of the Commissioning Better Outcomes Fund, a £40m outcomes fund which supported 27 projects. The evaluation concluded that social outcomes partnerships are best suited for situations where outcome funders are looking to achieve both flexibility and accountability, and to contexts where there are limited resources to fund experimentation.
However, like the individual social outcomes partnerships they support, it is difficult to assess the added value of the outcomes fund model, over and above the impact of the particular interventions that the model supports. To further build the evidence, future initiatives should develop their own robust learning and evaluation strategy at the fund level. More broadly, there should be greater data sharing and transparency around outcomes funds, to allow others to learn from successes and challenges. Over the coming years we need to answer not just if social outcomes partnerships work, but develop a recipe book for where, when and how.
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