Outcomes Finance 101: What It Is, Why It Matters, and How Canada Can Lead
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What if government funding only went to programs that delivered real results?  

That is the idea behind outcomes finance. It is a growing approach to public funding that puts results first, not just activity. Instead of paying for services before they happen, outcomes finance ensures that money flows only when meaningful change is proven—like higher graduation rates, warmer homes, or improved health. 

This guide will walk you through the basics: What is outcomes finance? Why is it growing globally? Where does it work best? How is it being used in Canada? And what makes Raven’s model unique? 

By the end, you will be able to explain outcomes finance to someone else. 

What Is Outcomes Finance?  

Outcomes finance is a way to fund public services based on performance. Instead of paying upfront for a program, governments or funders agree to pay only if clear results are achieved. These are called outcomes, and they must be specific and measurable. 

Here is how a typical outcomes finance project works in five steps: 

1. Define the problem – A social or environmental issue is identified, like high rates of chronic illness or energy inefficiency. 

2. Design the solution – A program is co-designed with partners to address the issue, with clear goals in place. 

3. Fund the project – Investors or donors provide upfront funding so the program can get started. 

4. Deliver the program – A community organization or service provider runs the intervention. 

5. Measure the outcomes – Independent evaluators assess whether the results have been met. If they have been, the government pays.  

This model is sometimes called Pay for Success, Social Impact Bonds, or Outcomes-Based Contracts. It works best when the desired outcome can be clearly measured and tied to a specific intervention.  

Why Outcomes Finance Exists 

Governments have always funded programs with good intentions. But too often, those programs are judged by how much activity they produce—not by whether they solve a problem.  

Outcomes finance came from a need to: 

• Make public spending more accountable 

• Encourage innovation without increasing risk 

• Give communities more control over solutions 

• Attract new sources of capital, including private and philanthropic funding 

It was first tested in the United Kingdom in 2010, in a project aimed at reducing repeat prison sentences. Since then, over 200 outcomes contracts have launched in dozens of countries.  

Where It Works Best (And Where It Doesn’t) 

Outcomes finance works well in areas where: 

• The problem is clearly defined 

• The results can be measured over a few years 

• The program can be tested and adapted 

• The benefits lead to long-term public savings 

Examples include:

• Housing retrofits that reduce energy bills

• Health programs that lower illness rates 

• Job training that leads to lasting employment 

• Education support that improves graduation rates 

But outcomes finance is not a fix for everything. It is not meant to replace universal public services or core programs like education, hospitals, or emergency care. It is a tool—not the whole toolbox. 

It is most useful when: 

• You want to try something new 

• You need flexible funding 

• You want to prove something works before scaling it 
         

A Brief History of Outcomes Finance 

• 2010: First Social Impact Bond launched in Peterborough, UK to reduce reoffending rates (UK Government) 

• 2012–2020: Life Chances Fund and Social Outcomes Fund created in the UK, supporting over 90 projects 

• 2023: UBS Optimus Foundation launches €100 million SDG Outcomes Fund with support from the European Commission

• 2025: UK launches £500 million Better Futures Fund to support children, families, and youth services (The Guardian) 

Research from the Government Outcomes Lab at Oxford has been instrumental in tracking global trends, learning what works, and building standards around outcomes-based partnerships. 

Canada’s Outcomes Finance Landscape  

Canada has only recently started using outcomes finance. But interest is growing. Key moments include: 

• 2014: First social impact bond launched in Saskatchewan to support child and family reunification 

• 2017–2019: Market readiness programs supported by federal government 

• 2020–Present: Outcomes projects launched with Indigenous communities through Raven Outcomes and other partners 

• 2024: National research on outcomes-based models published to guide public policy 

Most of Canada’s activity so far has been driven by Indigenous partners, social finance practitioners, and philanthropic funders. 

Raven Outcomes: Indigenous-Led Innovation 

Raven Indigenous Outcomes Funds is the first Indigenous-led outcomes finance fund manager in Canada. We work with First Nations, governments, and funders to invest in measurable change for Indigenous communities. 

We got into this work because for decades, funding systems failed to meet the needs of Indigenous Peoples. Projects were often designed without community input, and funding was limited, rigid, and short-term. We knew there had to be a better way. 

We created Raven Outcomes to:

• Improve outcomes for Indigenous communities 

• Provide flexible, upfront funding based on Indigenous priorities 

• Use capital in ways that reflect trust, respect, and self-determination 

• Build long-term partnerships that deliver measurable change 

Our model centers Indigenous leadership and values at every step. We call our contracts Community-Driven Outcomes Contracts (CDOCs). They are: 

• Co-designed with Indigenous communities 

• Anchored in culture and local knowledge 

• Measured through clear and meaningful indicators 

• Supported by investment, not burdened by it   

Here are some of the real results from Raven’s work with First Nations communities: Raven Outcomes Fund I Portfolio 

How we can scale this work: Create a national Indigenous Outcomes Fund (IOF) 

We believe it is time for a national IOF in Canada. It would: 

• Align public money with what works 

• Create a shared set of tools and standards 

• Allow provinces, municipalities, and Indigenous governments to access outcomes-based funding 

• Attract more investment and partnerships across sectors 

Canada does not need to start from scratch. The model is proven. Communities are ready. The opportunity is now. 

Want to Learn More? 

Explore these resources to dive deeper into outcomes finance and how it’s being used globally and in Canada: 

Government Outcomes Lab – University of Oxford: An international research centre offering detailed case studies, evaluations, and tools related to outcomes-based partnerships across sectors.

• Learn more by visiting their knowledge bank.    

• Explore their Outcomes Funds Guide, which aims to document and describe outcomes funds around the world and identify lessons for future fund design.
• Read the report from Raven Indigenous Impact Foundation and Sorenson Impact Institute on the State of Outcomes-Based Finance in Canada.

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