Outcome Bonds: Designing, Financing, and Managing Impact-Driven Investments
Outcome Bonds (sometimes known as Social Impact Bonds, Development Impact Bonds, or other forms of Pay-for-Success financing). This course is designed to cater to finance professionals and business school students who want to develop a deep understanding of how outcome-based financing works, why it’s growing in popularity, and how to structure and manage these financial instruments in the real world.
- Course Title: Outcome Bonds: Designing, Financing, and Managing Impact-Driven Investments
- Level: Intermediate/Advanced (suitable for finance professionals and business school students)
- Duration: Approx. 8–10 weeks (flexible based on depth)
- Format: Lectures, readings, case studies, assignments, guest speakers (optional), and a final project
By completing this course, you will have:
- A solid grasp of Outcome Bonds’ theoretical foundations and practical applications.
- Hands-on experience structuring and evaluating a hypothetical OB through the final capstone project.
- Insight into the challenges and future opportunities of Pay-for-Success mechanisms, enabling you to innovate and contribute to the expanding field of impact finance.
Mode of Delivery: Online
Course Structure at a Glance
- Module 1 – Introduction to Outcome Bonds
- Module 2 – Key Stakeholders and Their Interests
- Module 3 – Financial and Legal Structuring of Outcome Bonds
- Module 4 – Impact Measurement and Evaluation
- Module 5 – Real-World Case Studies
- Module 6 – Challenges, Critiques, and the Future of Outcome Bonds
- Module 7 – Course Project Work & Workshops (Optional)
- Module 8 – Final Presentations & Wrap-Up
Assessment and Grading
- Online Class Participation (10–20%)
- Engagement in discussions, workshops, role-plays.
- Assignments/Problem Sets (30–40%)
- Reflection essays, stakeholder mapping, drafting a term sheet, impact measurement plan, etc.
- Midterm Exam/Quiz (20–30%)
- Tests understanding of key concepts (contract structuring, stakeholder roles, outcome metrics).
- Final Project/Capstone (30–40%)
- Quality of the final proposal, clarity of presentation, and demonstrated comprehension of all course components.
Recommended Readings
- Books & Reports
- Nicholls, A., & Emerson, J. (Social Entrepreneurship: New Models of Sustainable Social Change)
- Gustafsson-Wright, E., Gardiner, S., & Putcha, V. (Brookings Institution) – various impact bond reports
- OECD reports on Social Impact Investment and Pay-for-Success
- Academic Articles
- “Social Impact Bonds: A Conceptual Framework” (Public Administration Review)
- “The Emergence of Pay for Success” (Journal of Social Entrepreneurship)
- Online Resources
- Perfect Capita (for ongoing updates, case studies, webinars)
- Social Finance UK – pioneer of SIB structuring
- Global Impact Investing Network (GIIN) – broader resources on impact investing
- World Bank, IFC – knowledge portals on impact bonds and blended finance
- Case Study Libraries
- Harvard Kennedy School, Stanford Graduate School of Business, and INSEAD publications
Curriculum
- 7 Sections
- 23 Lessons
- 10 Weeks
Expand all sectionsCollapse all sections
- Module 1: Introduction to Outcome BondsLearning Objectives Understand what outcome bonds (OBs) are and why they exist. Differentiate between Social Impact Bonds (SIBs) and Development Impact Bonds (DIBs). Explore the theoretical underpinnings and historical evolution of pay-for-success models.5
- Module 2: Key Stakeholders and Their InterestsLearning Objectives Identify the main actors involved in an OB. Understand each stakeholder’s motivations, risk appetite, and expected returns. Explore the role of intermediaries and outcome payers in structuring deals.3
- Module 3: Financial and Legal Structuring of Outcome BondsLearning Objectives Understand the contractual framework behind OBs. Learn how to structure payments tied to performance milestones. Explore risk mitigation tools and legal considerations.3
- Module 4: Impact Measurement and EvaluationLearning Objectives Distinguish between outputs (activities) and outcomes (impact). Learn different methodologies for impact measurement (RCTs, quasi-experimental designs, etc.). Understand the role of third-party evaluators and data integrity.3
- Module 5: Real-World Case StudiesLearning Objectives Analyze successful and failed OB implementations across different sectors. Learn best practices and pitfalls directly from real-world evidence. Understand geographical and sectoral nuances in OB deployment.5
- Module 6: Challenges, Critiques, and the Future of Outcome BondsLearning Objectives Critically examine common criticisms of OBs. Discuss transaction costs, complexity, and the potential for unintended consequences. Explore the evolving landscape, including policy and market trends.3
- Module 7: Final Presentations & Wrap-UpLearning Objectives Synthesize and apply knowledge gained throughout the course. Demonstrate the ability to design and articulate an outcome bond proposal. Reflect on learning journey and discuss next steps in OB innovation.1
