Measuring outcomes of development projects funded through traditional grantmaking is notoriously difficult. Many, if not most, of these grants—whether from governments, foundations, charities or other groups—contain provisos as to how the money should be spent, but the link between individual funding commitments and real-world results is not always clear.

Approximately ten years ago, several nonprofits and public and private-sector organizations created Development Impact Bonds (DIBs) to make measuring outcomes easier. Based in part on the UK government's Social Impact Bonds, the DIBs are a contracting mechanism that enables impact-driven investors to provide up-front funding for social programs, with their return on their investment dependent on the achievement of agreed-upon outcomes. Since their creation nearly a decade ago, only 24 DIBs have been launched in low- and middle-income countries, according to Devex, a media platform for the global development community.

Funding change in Kenya

In early 2023, a team of six White & Case lawyers and legal staff worked with the UK-based nonprofit Bridges Outcomes Partnerships to structure, negotiate and execute a DIB to fund sexual and reproductive health services for 15- to 19-year-old girls in Kenya. This matter was placed through our collaboration with the bespoke social finance pro bono support program Social Finance Hot Desk, which is an initiative of impact advisory firm Prime Advocates.

This DIB is one of the first in Kenya to address sexual and reproductive health. Despite broad awareness of contraception and HIV prevention/treatment, adolescents in Kenya face barriers to accessing quality care including social and financial constraints and the lasting effects of the Ebola and COVID-19 crises, which hampered the administration of sexual and reproductive health services.

The DIB's unique structure and performance measurement mechanisms, combined with the number of parties involved, made this a complex and rewarding project, according to London-based partners Melissa Butler and Anna Soroka, who led the deal. The DIB brought together:

• Tiko, a nonprofit that addresses sexual and reproductive health challenges using technology, which leads the implementation of the project in Kenya
• Bridges Outcomes Partnerships, the Firm's pro bono client that provided up-front capital for the project and coordinated between Tiko and the UN's Joint Sustainable Development Goals Fund and the Children's Investment Fund Foundation, the outcomes funders
• The UN's Joint Sustainable Development Goals Fund and the Children's Investment Fund Foundation, the outcomes funders, who promised funds linked to the achievement of the project outcomes

The DIB launched in July 2023 and will continue for two years. The staggered funding is contingent upon Tiko meeting outcome-based criteria outlined in the DIB agreement. For example, two key milestones for receiving funding include achieving a specific number of girls who are using two or more HIV services, and a specific number who receive services and live in multidimensional poverty.

This was a complex and innovative transaction, with an intricate web of agreements between the various parties that required the full range of each lawyer's skills. The lawyers focused not only on the legal aspects but also on ensuring a smooth flow of the much-needed health services to the girls in Kenya.

According to Bridges Outcomes Partnerships and based on the DIB's measurement structures, the project had provided more than 230,000 types of health services to more than 150,000 girls as of December 2023, well above the DIB's goal of approximately 136,000 at the six-month mark.

Photo by © Wilpunt / GettyImages
A community nurse talks to teenage girls in an informal settlement in Africa.