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

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.