What is a Social Outcomes Contract?

The main feature of a Social Outcomes Contract (SOC) is that improved social and health outcomes lead to a financial return for the involved parties and the saving of public finances. This is regulated through the social outcomes contract between the commissioner and the investor(s). The role of each party of the contract vary depending on context, and thus, the structure of the contract varies. However, the SOC has some permanent features:

The commissioner makes a commitment to the investor through the SOC to deliver specific actions and pre-defined outcomes for the target group. The investor receives their variable compensation depending on achieved outcomes. The compensation of the investor is regulated through a payment ceiling. In some cases, the same actor acts both commissioner and investor (see case: “Botkyrka and Örnsköldsvik”).

The service provider is commissioned with an outcomes contract and their compensation is partly dependent on the outcomes of the intervention. The outcomes focus of the SOC increases the need for a transparent and robust project monitoring. This is provided by the intermediary (RISE). RISE initiate situation assessments in collaboration with other actors to identify the needs of the target group, design SOCs, measure outcomes and support all parties in the project.

Social & Health Impact Center

SHIC is an independent knowledge hub which provides capacity and competence to drive development. SHIC works both strategically and operationally. Learnings from other countries suggest that this type of actor is crucial. Examples are SITRA in Finland, Social Finance in UK, MaRS Centre for Impact Investing in Canada.