Asha Impact
3 min readJul 3, 2020


Charcha 2020: Fundraising and Philanthropy Track, 14–16th May 2020

Speakers: Dhun Davar, UBS Optimus Foundation; Abha Thorat-Shah, British Asian Trust; Prachi Windlass, Michael and Susan Dell Foundation; Kartik Desai, Asha Impact (Moderator)

About the session: A discussion with three pioneering organisations in education and blended finance. Using insights from the existing impact bond structures in India, the speakers shed light on the operating models that are best suited for blended finance structures in a post Covid-19 world, where nonprofits need to innovate, and what it will take to get these models off the ground quickly.

Watch the video recording of the session here

Key takeaways from the session:

  • Impact Bonds face four major challenges today — (1) unlocking outcome funding and risk capital (2) standardization of impact metrics (3) lowering costs to get more impact bonds off the ground (4) increase government involvement to scale these instruments
  • Different pay for performance instruments have been tried in education and skilling

Social Success Notes: To improve learning outcomes in budget private schools, financial incentives were tied to the achievement of improved learning outcomes. In case outcomes improved, schools received an interest subvention on their loan. The intervention showed a deeper impact (higher outcome achievement) over models where no financial incentives were provided. (Read more on Social Success Notes here)

Development Impact Bonds: DIBs were used to scale proven non-profit models who were working with students in government schools to deepen and scale their impact. (Read more on DIBs here)

Impact Linked Debt: Low-cost loans and guarantees to NBFCs to enhance coverage to students from low-income families to gain access to aspirational skilling courses

  • The relevance of Blended Finance for Education and Skilling will become more pertinent in a post COVID world: Foundations and Service Providers need to re-look at interventions in the short-term w.r.t program delivery modifications (eg. remote and distance leaning solutions). In a post-covid world, the focus would need to shift towards bridging the immediate gaps created by COVID and using frugal technologies that enhance access to online education.

Immediate focus of funding pools is on covid-relief, which will lead to funding drying up eventually. Funders will hence be more discerning and will insist on more effective use of philanthropy. This is where pay-for-performance instruments would play a key role.

  • These instruments have two key features which would be helpful in the wake of covid (1) help shift payment timings for funders (outcome funders) who may be constrained now (due to covid relief efforts) and (2) bring together funders with different risk-return profiles who may be interested in opportunities that are uncorrelated to the market.
  • Market Building for Blended Finance would require simultaneous steps of (1) investor education and knowledge exchange (2) investing in capturing better baseline data (3) outcomes acceleration — new and better quality bonds through Design and Technical Assistance grants; testing new interventions (4) pooling of risk and outcome funding; creating blended capital stacks to make risk investing more appealing (5) engaging Government to become the buyer of outcomes (Outcome Funder) and make public provisioning more effective
  • No plug and play rulebook for impact bonds exists. Collaborators need to come together and question, redesign the structure for the problem at hand.
  • The pipeline of DIB-ready nonprofits is meagre and hence capacity building and hand-holding support is paramount
  • DIBs/SIBs are not a substitute for grant-funding and cannot be applied to every sector and intervention.



Asha Impact

An impact investment and policy advocacy platform for business leaders