• Case Study

The Role of Guarantees in Blended Finance

  • Source : OECD
  • 1 January 2021
This paper takes stock of the use of guarantees in the blended finance market, examining their key benefits, challenges, and barriers to more common deployment in developing contexts, especially in least developed countries. It investigates the potential role of guarantees in light of COVID-19 and post-pandemic recovery efforts. The paper concludes with recommendations for development agencies and public institutions to promote more ubiquitous use of guarantees, including improved uniformity in structuring and ODA-eligibility.
  • Case Study

Fact Sheet: Dc Water Environmental Impact Bond

  • Source : Goldman Sachs
  • 23 July 2025
This fact sheet details the DC Water Environmental Impact Bond (EIB), a pioneering “Pay for Success” model in the water sector and the first tax-exempt municipal bond of its kind. The EIB finances green infrastructure projects aimed at stormwater runoff reduction. It features a unique financial structure where contingent payments are made based on project performance against predetermined environmental outcomes. If the project exceeds targets, investors receive an outcome payment; if it underperforms, they make a risk-share payment to DC Water. This innovative bond allows DC Water to test new infrastructure while mitigating financial risk.
  • Case Study

The Risk and Return of Impact Investing Funds

  • Source : University of Chicago
  • 1 January 2022
This paper provides the first comprehensive analysis of the risk exposure and risk-adjusted performance of impact investing funds. Utilizing a new dataset of impact fund cash flows, it characterizes their risk profile relative to benchmarks, particularly venture capital funds. The study finds that impact funds exhibit a lower market beta than comparable private market strategies. While underperforming the public market when accounting for market risk, they do not underperform more than other private market strategies, offering crucial insights into their financial properties.
  • Case Study

Social Finance: a Primer Understanding Innovation Funds, Impact Bonds, and Impact Investing

  • Source : Center for American Progress
  • 3 January 2013
This primer from the Center for American Progress provides an overview of social finance, specifically focusing on innovation funds, impact bonds, and impact investing. It explains these financial tools and their policy implications for addressing social challenges. The document aims to enhance understanding of how these innovative financing mechanisms can drive positive social outcomes and attract private capital for public good.
  • Blog

Blending with Guarantees: Hope or Hype

  • Source : Convergence Finance
  • 1 July 2019
This blog post by Justice Johnston explores the effectiveness and potential of using guarantees as a blended finance instrument. It likely discusses whether guarantees truly de-risk investments and attract private capital into development initiatives, or if their impact is overstated. The author probably delves into the mechanics of guarantees, their advantages in mobilizing finance, and the potential pitfalls or limitations. The piece aims to provide a nuanced perspective on guarantees within the blended finance landscape, helping practitioners understand when and how to best utilise this tool for maximum impact.
  • Case Study

The Potential and Limitations of Impact Bonds

  • Source : Brookings
  • 1 January 2015
This paper explores the potential benefits and limitations of impact bonds, which aim to attract private investment to social programs by linking returns to achieved outcomes. It discusses how these bonds can bring together diverse expertise, enable investment in prevention, and foster flexibility in service delivery. However, it also highlights challenges such as complexity, high development costs, difficulties in defining measurable outcomes, and the potential for limited innovation or the “financialisation” of public services.
  • Case Study

The Increasing Importance of Green Bonds as Instruments of Impact Investing -towards a New European Standardization

  • Source : “Social Impact Investments International Conference, Second Edition” Rome, 12-13 December 2018 - University La Sapienza (Italy)
  • 1 December 2018
This chapter examines the rapid growth of the green bond market in Europe and its role as a targeted impact investing tool for environmental and social governance (ESG) objectives. It highlights key challenges, including inconsistent definitions of what qualifies as “green” and the proliferation of diverse assessment frameworks. The author argues for a unified European standard—specifically the EU Green Bond Standard—to enhance clarity, transparency, and investor confidence. By analysing current instrument characteristics and regulatory gaps, the chapter advocates standardisation to responsibly align capital flows with sustainable development goals.
  • Case Study

Social Finance: a New Frontier for Development in Indonesia

  • Source : London School of Economics
  • 4 January 2017
This LSE publication explores social finance as an emerging frontier for development in Indonesia. It examines various financing models, including crowdfunding and peer-to-peer lending, and their potential to advance financial inclusion. The study highlights how innovative financial approaches can address development challenges and expand access to capital for underserved populations in Indonesia, fostering inclusive economic growth.
  • Case Study

Exploring the Potential of Social Finance in Canada

  • Source : Report of the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities
  • 1 January 2016
This report evaluates the feasibility of applying social finance mechanisms—like microloans and impact bonds—to support newcomer settlement and integration in Canada. It reviews existing models, including the Immigrant Access Fund and a Community Employment Loan program. The study finds that social finance could leverage private capital, enhance sustainability and innovation in settlement services, and deepen partnerships with government and the private sector. However, it emphasizes the need for context-specific models, sound metrics, and supportive policy frameworks for effective implementation. publications.gc.ca+7
  • Academic / Journal Article

Outcome-based Financing: What Do Nonprofits Need to Know?

  • Source : IDR Online
  • 1 March 2023
This article examines Outcome-Based Financing (OBF) and its implications for nonprofit organizations. It provides essential information for nonprofits considering or engaging with OBF models, such as Development Impact Bonds. The authors discuss the shift from traditional funding to performance-linked payments, highlighting the need for robust measurement and evaluation frameworks. The article also covers potential benefits like increased efficiency and impact, as well as challenges related to data collection, risk, and capacity building for nonprofits navigating this evolving financial landscape.
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