What happens in an outcome-based financing model when a major crisis hits?

With over 5 million recorded cases of COVID-19 across the globe and cases rising exponentially in many regions, the impacts of the pandemic are reverberating across sectors. While governments have put in place measures to ensure the health and well-being of the populations they serve, the nature of the virus and the measures being implemented to protect the population have meant unprecedented disruptions in economic activity and dramatic shifts in the delivery of critical social services around the world. In this policy brief, I explore the impact of the pandemic on social services that are funded through impact bonds, an innovative outcome-based financing mechanism in which investors provide up-front capital to service providers, with the potential for a return if selected outcomes are achieved.