As outcomes-based funding gains traction, its implications for strategy, service design and capital are becoming clearer, reflected in discussions at the Impact Investment Summit.
The Impact Investment Summit Asia Pacific 2026 brought together a broad cross-section of the market, from capital providers to policymakers and service providers, all with the shared goal of mobilising capital to advance social and environmental outcomes.
The event drew 840 attendees and more than 120 speakers—up from fewer than 500 attendees only two years ago. This reflects the rapid growth of the impact investment market itself, with more than $157 billion invested in impact across Australia in 2025, a major leap from just $20 billion five years earlier.
At this year’s Summit, the focus moved beyond establishing that impact investing works to the specifics of how capital is deployed to deliver measurable change. The program covered the need for systems-level change, the use of blended finance, philanthropy’s shift amid intergenerational wealth transfer and funding models that link capital to outcomes.
The shift from activity to outcomes
When it comes to the social impact and the for-purpose sector, in an environment of constrained funding, capital is increasingly being tied to outcomes rather than activity.
Current funding models, particularly in health and social services, tend to reward activity—the number of appointments, interventions or program participation—rather than whether those services improve lives and ultimately deliver change.
A Foundstone-hosted panel featuring Natalie Sullivan (CEO of Each) Bonnie Ashton (GM at Future Generation) and Grace Hollister (Impact Strategist) examined the shift to outcomes-based funding models, and how impact measurement, collaboration and system design influence the ability to deliver meaningful, scalable outcomes.
One of the challenges discussed was the failure of the current system to incentivise meaningful change, as it is more focused on activity rather than measuring direct improvements in health and wellbeing.
“If you keep counting what you do, not what difference it makes, then we’re going to continue to invest in a broken health system.” — Natalie Sullivan.
Outcomes-based funding changes that by tying funding to measurable results, like reduced hospital admissions, improved mental health, sustained employment or stable housing.
Funding what works
A system funded on throughput prioritises volume, responds to crisis and counts what is easy to measure. But it struggles to invest in prevention.
When funding is tied to activity, there is limited incentive to address the underlying drivers of demand—such as social isolation, fragmented care and broader social determinants. Yet these are often the factors that determine whether outcomes improve.
When those drivers are addressed, the impact is more immediate. Hospital demand drops, not because more services are delivered, but because the right interventions are put in place earlier.
Providers gain flexibility in how they deliver services and can combine supports rather than delivering isolated interventions. This also supports a longer-term view of funding and impact. We know communities thrive when support is early, local and connected, but those services are not currently valued enough by government because their impact is long term and is harder to measure.
If we measured what matters, we’d fund what works.
Why collaboration becomes central
Outcomes-based models depend on a level of coordination that current systems are not designed to support. For example, commissioning is intended to drive efficiency but often does so by creating competition—rewarding the lowest price for the most activity, rather than the best partnership for the best outcome.
This creates a structural tension. As Sullivan described it:
“The way we commission work is intended to drive efficiency, but it creates competition, so the lowest price for the most activity is rewarded, not the best partnership for the best outcome.
“You can’t build an integrated health and social care system by forcing everyone to fight for the same slice of funding. You can’t ask organisations to collaborate on Monday and then outbid each other on Tuesday. That’s not a partnership model.”
Outcomes require shared accountability, shared data and aligned incentives across providers. That, in turn, requires investment in partnership infrastructure—something rarely funded under activity-based models.
This may look like capital deployed upfront to fund service delivery, with returns linked to outcomes and shifting risk from government; and with philanthropy playing a complementary role by funding early-stage models, supporting evidence-building, and backing harder to finance areas. It also supports organisations to build data and capability required to measure and deliver outcomes.
What this means for social impact leaders
Globally, the funding shift toward outcomes is already well underway.
“From a global perspective, over the past 15-20 years, there has been a big movement toward using outcomes and impact and the cost of delivering an outcome as a key selection factor for investing.” — Grace Hollister.
In Australia, it is reflected in initiatives like the Federal Government’s $100 million Commonwealth Outcomes Fund and the trialling of Payment by Outcomes (PBO) investing to address long-standing social issues.
To be best placed to respond and capitalise on this shift, organisations should rethink how strategy is developed and executed. That requires opening up the strategy process itself—engaging funders, partners, government and communities—to shape outcomes-aligned strategy and operational programs.
Further, it also requires building impact measurement capability and understanding the cost of delivering them.
“Impact measurement allows us to bridge that gap between intentionality and accountability. It’s important that what we learn from the impact measurement is embedded in every facet of the organisation.” — Bonnie Ashton.
The organisations best positioned to access outcomes-based funding, philanthropy and impact capital are those that develop impact-led, stakeholder informed strategy with clear measurement, rather than treating impact as a separate layer.
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