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Welcome to the Impact-Linked Finance Fund

Providing Better Terms for Better Impact

We are financing high-impact enterprises with rewards for achieving positive impact

About the fund

The Impact-Linked Finance Fund provides finance to high-impact enterprises and directly rewards these for positive outcomes generated through their business activities. It was established by Roots of Impact and iGravity in order to pool their know-how and activities for implementing scalable Impact-Linked Finance programs and facilities.

The Fund, set up as a Dutch charitable foundation, is acting as a capital provider and knowledge hub for the practice of Impact-Linked Finance. We also advocate for embedding impact-related principles and terms in other areas of business, policy and finance.

How we provide Impact-Linked Finance

The Fund provides innovative finance in multiple forms to market-based organizations and uses a variety of non-repayable and repayable financial instruments that link financial terms to realized outcomes. In the table below are some examples of such instruments. We also provide funding to intermediaries who give financial or technical support to high-impact organizations. One way of doing this is by compensating them for offering concessional finance linked to positive outcomes.

 

Social Impact Incentives (SIINC)

This solution rewards high-impact enterprises with time-limited premium payments for achieving social impact and enables them to attract additional growth capital.

Impact-Linked Loans

These loans provide financing at concessional rates to impact organizations. Interest rates (and potentially also principal payments) are tied to the achievement of pre-defined outcomes (“better terms for better impact”), which creates a strong incentive: The more impact the organization achieves over the term of the loan, the lower will be its cost of financing.

Other financial innovations

There are multiple ways to reward impact enterprises for positive outcomes, for example Reimbursable SIINC, Convertible SIINC, Impact-Linked Convertible Notes, Impact-Linked Revenue-Share Agreements, Impact-Linked Guarantees, Impact-Linked Redeemable Equity, etc.

Technical Assistance Grants

This specific instrument is meant to build or strengthen the impact measurement and management (IMM) practice of the investees as well as build the capacity to optimize future impact and business performance.

What we want to achieve

The ultimate goal of the Impact-Linked Finance Fund is to catalyze private sector investment for the benefit of high-impact enterprises by improving their risk-return profiles. By either enhancing financial returns and/or mitigating the risk of investing in these enterprises, we can mobilize more vital resources and catalyze much deeper impact. The Design Principles for Impact-Linked Finance are guiding our activities and we will advocate for them to be broadly applied by others, too.

How we run our programs

We work with ring-fenced funding windows related to specific themes, programs and geographies, allowing donors and funders to earmark their contributions.