Outcomes Funds: Developed vs. Developing World Finance

2024 looks likely to be a banner year for outcomes funds — professionally-managed pools of grant capital which hone philanthropic and government money on specific challenges worldwide.

In Africa, the Education Outcomes Fund (EOF) aims to mobilise $1BN by the (pivotal) year 2030 — hoping to transform the lives of 10 million children and youth.

The INDIGO project at Oxford University, which kindly consented to the reproduction of their dataset, has been mapping the development and growth of outcomes funds — and government outcomes commissioning generally — since 2010.

Their dataset includes both a snapshot of deployed outcomes as well as a pipeline dataset which provides interesting clues into the outcomes-based financing programmes being developed around the world.

The UK Has Deployed More Outcomes Funds Than Any Other Nation

The United Kingdom (UK) has long been regarded as the global laboratory for all manner of social finance interventions.

So although the results are unsurprising, it is interesting to filter the INDIGO data by total outcomes value (standardised on USD) to understand the extent to which the UK has eclipsed under countries in embracing this form of finance:

The UK’s largest outcomes funds to date:

Outcomes Funds: Facts

  • 5 of the 7 largest outcomes funds deployed to date were domiciled in the UK
  • The Life Chances Fund (LCF) remains the only outcomes fund to date to have surpassed the $100M in mobilised capital with many funds remaining relatively modestly-valued proof-of-concept level initiatives

The global deployment to date visualised on a map.

While some countries have spun up successive and relatively large funds, entire swathes of the world have yet to see any sizeable outcomes funds be rolled out:

Analysing the March import of INDIGO’s data of deployed outcomes funds and dividing the countries listed by their classification on the human development index (HDI) shows that there remains a large gulf between how much money has flowed through this vehicle into developed versus developing nations.

  • Outcomes funds deployed to developed economies: $514.29M ($514,290,163)
  • Outcomes funds deployed to developing nations $81.28M ($81,288,030)
  • Ratio: 6.34X

Much work remains to be done, this year and in future ones, on closing the gap and scaling up this mechanism around the world.

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