What Is
Impact-linked Finance
Impact-Linked Finance is an innovative financing approach that provides financial rewards to market-based organizations for the achievements of positive social outcomes.
Aligning financial terms and social impact
Providing better terms for better impact
ILF enables and incentivizes enterprises to accelerate and deepen their positive impact, while continuing to grow their business. Rewards for positive outcomes can be built into financing instruments across the board, from equity and debt to guarantees. ILF builds on the idea that any business – regardless of sector or stage – can optimize for impact.
Linking financial rewards to the
outcomes that matter
Unlocking the potential of high performing enterprises
Organizations with market-based models receive direct financial rewards for creating positive impact.
Funders and investors, enjoy more impact “bang for the buck” and make smarter use of their investments for the benefit of people and the planet. ILF has also proven effective at steering enterprises toward achieving positive outcomes that they would not have been able to pursue otherwise.
Principles of
Impact Linked-Finance
Incentives to the value creator
Financial rewards should be directed to the primary value creator.
Focus on outcomes
ILF instruments are based on outcomes or proxies of outcomes – not outputs – and measure these wherever feasible, useful, and economically viable as triggers for determining the level of financial rewards.
Better terms for better impact
The financial rewards in these instruments should drive the organizations to deliver additional outcomes that would not have happened without these incentives.
- katie.naeve@ilfcollaborative.org
- +1 (513) 213 1679
Driving a new era in finance where capital is aligned with impact to create meaningful, measurable change across communities worldwide.
