Designing outcomes based financing: Lessons from Sierra Leone and Bogotá

Introduction

Results based financing (RBF) refers to a broad family of mechanisms that link payments to verified results. These results may be outputs or outcomes. Outcomes based financing (OBF) is a form of RBF in which payments are tied, at least in part, to pre-defined outcomes rather than to the delivery of specified activities. But designing a mechanism that is both rigorous and workable involves a series of choices: what to measure, how to set targets and prices, how to select and incentivise implementing partners, how to verify results, and how to structure contracts to give providers flexibility to adapt their approach.

On 12 August 2026, Global Schools Forum’s Community of Practice on Innovative Financing brought together practitioners to explore these technical questions in more depth. Members had expressed a particular interest in moving beyond the principles of OBF to understand how these mechanisms are designed and implemented in practice.

Milena Castellnou, Chief Programmes Officer at the Education Outcomes Fund (EOF)  & Bethany Fong, Programme Associate at EOF; Job Matseshe, Regional Director at Rising Academies in Sierra Leone and Liberia; and Sebastián Osorio Hoyos, Director at Instiglio brought perspectives from across the OBF ecosystem.  The session drew on EOF’s practice brief, Designing an Outcomes Fund, alongside experience from Rising Academies’ work in Sierra Leone and Instiglio’s experience supporting performance-based contracts in Bogotá. 

Together, these perspectives illustrate how design choices around measurement, incentives, verification and implementation play out in different contexts, and what can be learned when OBF meets the realities of delivery and public systems. 

Designing an outcomes fund 

EOF kicked off the session drawing on its extensive experience applying innovative financing tools to education, specifically through the design of seven education outcomes funds in Rwanda, South Africa, Tunisia, Namibia, Nigeria, and two in Sierra Leone.

Outcomes funds are one of many tools within the OBF toolbox. In education programmes, this innovative financing mechanism brings together governments, implementing partners, independent evaluators, outcomes funders, and at times, pre-financers, around what matters most in any education programme: learning. 

EOF believes outcomes funds can drive impact across education sectors and are putting that belief into practice by co-designing outcomes funds with partner governments in early childhood care and education (ECCE),  foundational learning, accelerated learning for out-of-school children and skills for employment programmes.

Designing any OBF programme requires a thoughtful, contextualised and strategic navigation of trade-offs around interdependent design elements. After identifying the core problem to be addressed (e.g. low literacy skills in public primary schools) and the intended programme impact and its theory of change, an OBF programme will face the following choices when aligning incentives to the target outcomes:

• What payment metrics should be selected, and what weight should be allocated to each? 
• What should be the price paid for each unit achieved, and what target should implementers be incentivised to reach? 
• How should outcomes be measured and evaluated?

To show the Community of Practice how these technical decisions played out in practice, EOF took a deep dive into the Sierra Leone Education Innovation Challenge (SLEIC), 2022-2025. At launch, SLEIC was the world’s largest OBF programme in education. It reached 125,000 children in 325 public primary schools throughout Sierra Leone, with foundational learning interventions led by five implementing partners: EducAid, Rising Academies, Save the Children, StreetChild, and the National Youth Awareness Forum (NYAF).

Alongside providing an overview of programme results, the Community of Practice heard about how these design decisions were made in SLEIC and engaged in a candid conversation around lessons learned. 

What worked well?

SLEIC used its first year for learning, mobilisation and target setting, paying for activities before shifting to OBF in years two and three. Partnerships and delivery approaches also drove results and fostered a strong culture of collaboration among stakeholders: intentional governance spaces were set up so that government, implementers and other outcomes partners could come together and problem solve throughout the programme’s lifecycle. Implementing partner Rising Academies echoed this sentiment: its approach to structured pedagogy and coaching at scale thrived under an OBF model that rewarded using data to adapt and innovate.

What would EOF do differently?

SLEIC’s lessons have directly shaped the second generation of EOF programmes. EOF  has reevaluated whether RCTs are the right fit for OBF evaluations, and has reflected on which assessment instruments are most appropriate and sustainable. SLEIC also showed EOF how outcomes partnerships are only as strong as the trust among all stakeholders, especially between implementing partners and external evaluators. EOF has now built that trust into programmes from the start through more extensive data sharing and collaborative decision-making on design, such as through live data sharing and a collaborative target-setting workshop in South Africa.

Getting outcomes funds right is an iterative process. The “Designing an Outcomes Fund” Practice Brief, and the conversation with the Community of Practice, highlighted just that: they did not aim to provide a rigid and prescriptive model of outcomes fund design, but to highlight the iterative process that underpins aligning incentives with education outcomes. 

 As EOF grows and strengthens its approach to building outcomes partnerships, they’re committed to sharing what we learn, both what works and what doesn’t, with the wider education and innovative financing community.

Performance based contracts in Bogotá

After hearing from EOF and Rising Academies, the Community of Practice heard from Instiglio, who has applied innovative financing mechanisms in various sectors for over a decade. This includes extensive work in the education sector, including ECCE.

In designing an RBF programme for ECCE in Bogotá, Colombia, Instiglio confronted the same design questions presented by EOF.

What is the core problem to be addressed and intended impact?

In Bogotá, the Secretariat for Social Integration (SDIS) identified four gaps in early childhood care: uncertainty in the total capacity used; weak retention, as only 23% of children reached 153 to 190 days of attendance; rigid service delivery models; and limited pertinence of the service to the target population. Instiglio provided the technical assistance, co-designing an RBF mechanism with SDIS and building the capabilities the government needs to run it long term. 

What payment metrics were selected?

The resulting Performance-Based Contract covers 35 centres; 12 voluntarily opted into a 6% bonus on top of their base contract, tied to three metrics aligned with the District’s Development Plan priorities for early childhood: timely attendance, continuous attendance, and service quality. 

How were results measured and evaluated?

Instead of hiring an independent third party, the mechanism enabled the SDIS to embed the verification process itself, building on its existing supervision routines and its software information system. For timely attendance, centres recorded attendance daily in the software, noting the reason for any absence, and submitted monthly reports that supervisors checked through random visits and calls to families. This metric was paid monthly. Continuous attendance used the same records: at the end of the agreement, each child’s total days attended were sorted into one of three retention thresholds (low, medium, or high). Paying per child kept centres focused on keeping each child enrolled. For quality, SDIS staff applied a standardised observation guide three times on random unannounced full days. Both metrics were paid once, at the end of the agreement. This approach kept transaction costs low without giving up accountability, and it pushed SDIS to improve its own attendance data.

What were the results?

In the first iteration, average attendance rose 1 to 2 percentage points, with only two participating centres declining. Fewer than 20% of children fell outside any retention threshold in nearly all centres, and three centres reached the quality threshold. Being publicly funded, the project must scale through public systems, navigating structural barriers like system rigidity, political and institutional instability, regulatory and legal barriers, verification costs, and provider capacity. Instiglio proposed adjustments such as making SDIS’s information system the single verification source, letting centres use bonuses to hire temporary pedagogical support, and separating supervision from verification. Metrics, weights, and verification generate technical evidence, but those alone don’t necessarily scale a programme. Considering evidence on how public institutions implement the programme within the design can be as fundamental. The strongest sign the programme is working is that SDIS is now considering results-based payments as a structural feature of their procurement.

Closing thoughts 

Across all three perspectives, one message stood out: outcomes based financing is a shared learning opportunity for governments, implementers, funders and evaluators. In Sierra Leone, the government and implementing partners worked through implementation challenges together. The five implementing partners exchanged lessons through peer learning forums, and partners reviewed each year’s independently verified results together. The variation in results across intervention models also gave government and funders useful evidence on what works in that context. In Bogotá, the Secretariat for Social Integration verified results itself and treated verification as a tool for learning rather than a sanction. For the first time, it could measure the quality of its early childhood services systematically.

These lessons are shaping what comes next. For EOF, SLEIC’s lessons are informing its newest programmes in Nigeria and Namibia. For Rising, OBF has strengthened its model and its ability to iterate and innovate. The next step is to bring new funders to the table and replicate the model elsewhere.. In Bogotá, the mechanism is now in its second iteration, and the Secretariat is considering making performance based contracts a standard feature of its procurement. 

We will continue to explore these mechanisms and the new questions that arise with our members through future Community of Practice sessions.

Resources

• The session recording and presentations
• What is an outcomes fund,practice brief by EOF and GSF
• Designing Outcomes Funds Practice Brief
• Sierra Leone Education Innovation Challenge case study
• Sierra Leone Basic Education results
• Talking Outcomes with Rising Academies
• Performance-Based Contracts in ECCE in Bogotá