Impact Policy Tracker Policy

Commonwealth Outcomes Fund



The Commonwealth Outcomes Fund (COF)is an A$100 million (~USD 67.2 million) fund established to expand outcomes-based contracting across Australia, announced in the 2023-24 Budget as part of the A$199.8 million (~USD 134.3 million) Targeting Entrenched Disadvantage package. As a long-term federal instrument operating for up to 10 years, the COF makes contractual payments to state and territory governments, service providers and social enterprises based on the achievement of agreed, measurable social outcomes.

The fund targets three strategic priority areas that align with national policy objectives: (i) supporting families and children to break cycles of intergenerational disadvantage; (ii) overcoming barriers to employment for groups facing systemic exclusion; and (iii) supporting people facing or experiencing homelessness through prevention, early intervention and tailored services.

Early COF-backed projects demonstrate the Fund's coverage and federal reach, including New South Wales' Get Back in the Game, a jointly funded A$10 million (~USD 6.7 million) initiative supporting disengaged youth (15-21) into education, training and employment; South Australia's Young Parenting Program, a 16-week evidence-based intervention aimed at improving child development, family wellbeing and employment outcomes for young parents; and Victoria's Self-Determined Aboriginal Employment Initiatives, which creates Aboriginal-led, place-based employment pathways.

Highlights

  • Building on over a decade of government efforts to develop the Social Impact Investing market: The Fund builds on more than ten years of federal initiatives to strengthen Australia's social impact investing ecosystem, starting with the A$20 million (~ USD 13.4 million) Social Enterprise Development and Investment Fund (SEDIF) in 2011, followed by multiple Payment-by-Outcomes (PBO) trials and the establishment of the Social Impact Investing Taskforce within the Department of the Prime Minister and Cabinet. The COF represents the Commonwealth's most significant outcomes-based contracting initiative to date (in both scale and ambition), offering a ten-year horizon for project development, delivery, evaluation and final payments.

  • Key role of GSG Impact's National Partner in Australia: The creation of the Commonwealth Outcomes Fund directly responds to the recommendations of the Social Impact Investing Taskforce, in which Impact Investing Australia (IIA) -GSG's National Partner- played a key role.

Government’s Role:
Market Participant


Country:
Australia

Policy Type:
Outcomes partnerships

Year: 2024

Responsible Institution:
Department of Social Services (DSS) & Treasury

Additional information:
Outcomes Fund - Australian Treasury

Outcomes partnerships

What are outcomes partnerships?

Outcomes partnerships are innovative funding mechanisms that link payments to the achievement of measurable social or environmental outcomes, rather than to the delivery of predefined services. They typically involve three core parties: a government or public entity acting as the outcome payer, a service provider delivering the intervention, and a third-party investor supplying upfront repayable finance. The investor is repaid, partially or fully, only if the agreed outcomes are achieved. This structure shifts financial risk away from the public sector, encourages performance-based service delivery, and enables more flexible, adaptive approaches to addressing complex social challenges. It underpins instruments such as Social Impact Bonds (SIBs), Development Impact Bonds (DIBs), Career Impact Bonds, and outcome funds.

Outcomes partnerships have emerged from pioneering efforts in the UK and were developed in response to the limits of traditional, one-size-fits-all service delivery, especially in sectors like health, education, and employment. They have helped improve public sector effectiveness (delivering up to 9x of public value for every $1 invested), mobilise private investment for the public good, and strengthen performance management through learning and adaptation. Outcomes partnerships rest on three key principles: 1) collaborative design, where stakeholders co-create shared goals; 2) flexible delivery, allowing for real-time learning and local adaptation; and 3) clear accountability, with transparent reporting on tangible, person-centred outcomes.

For more information, visit GSG Impact’s reports, Shifting Gears - Challenges in scaling outcomes partnerships in government and strategies for success and Tying funding to results, and Oxford University’s Government Outcomes Lab website and its latest report “The evolution of social outcomes partnerships in the UK”.