The deputy CEO of Tri-Sector Associates on how impact-first funding models can build bridges across the public, private, and non-profit sectors

In five words, how would you describe what you do to someone you’re meeting for the first time?

It’s hard to sum it up neatly, but these five words come to mind: We are in the business of “multiplying impact through cross-sector partnerships.” We believe that by building a shared vision, using a common language of outcome measures, and harnessing the unique strengths of different players — ranging from philanthropists and businesses to the public sector and non-profit organisations — we can better solve complex societal problems together.

We do this by structuring outcome-based partnership models, such as pay-for-success (PFS) and blended finance solutions, depending on the nature of the issue we are tackling. For example, in one of our first projects in Asia, we aimed to address the poverty and social exclusion faced by ethnic minority children in Hong Kong. To achieve this, we collaborated with a local service provider to structure a PFS project for an early childhood education programme.

A coalition of funders provided the upfront funding, while the Hong Kong government committed approximately $5 million as outcome payments with additional incentives to be disbursed if all pre-agreed success measures were met. 

This approach requires various stakeholders to come together, align on measures tied to incentives, and actively monitor the programme's outcomes and impact throughout its implementation.

Why is your work at Tri-Sector Associates important to the world today?

There are many players who want to do good, but we need to do this collectively and meaningfully.

Many players want to do good, but we need to do this collectively and meaningfully. Governments are increasingly interested in attracting private and philanthropic capital to achieve sustainable development goals (SDGs). Meanwhile, newer philanthropists seek innovative ways to maximise impact, and businesses are advancing their ESG agendas. Nonprofits and social enterprises also recognise the need to improve impact measures to attract diverse funding.

By understanding each party's hopes and concerns, we can structure the right partnerships to solve the world’s toughest problems. That’s why Tri-Sector’s work is crucial: we make different sectors work together with an impact-focused approach, especially as we face challenges like climate change, poverty, and ageing in the years ahead.

What do people most misunderstand about what Tri-Sector Associates aims to achieve?

It’s common to hear, “We’ve never heard of an organisation like yours before” when we talk to different parties. So, rather than a misunderstanding, it’s often a case of needing more market education in general. This isn’t surprising, given that solutions like blended finance are still emerging globally. Between 2015 and 2022, the annual blended finance flow averaged approximately US$9 billion ($11.8 billion) — a figure that falls significantly short of the US$4.2 trillion required annually to meet SDGs in developing countries.

For those who have heard of us, it can be easy to misunderstand our work as simply implementing a pre-determined PFS or blended finance solution to any given problem. But it’s more nuanced than that. We typically start by assessing whether a PFS or blended finance model is even appropriate for the issue at hand. We ask ourselves questions such as: Does it add value in addressing the issue? Can the issue be rigorously measured?

This has led to the innovation of models, such as launching the first-ever Social Impact Guarantee for a vocational training programme for youths and the Outcome Amplifier for a family empowerment programme in Singapore.

What would success in your work look like?

I would say there are two levels of success. On a personal level, success occurs when ecosystem players have that “aha” moment of recognising the value of our work in solving challenges that deeply matter to them.

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On a systemic level, success occurs when outcome-based partnership models become central to key players in the sector, who see these models as viable options for improving society. This requires trust-building across sectors as well as enhancing capabilities in impact measurement and outcome-linked financing. We’re realistic that this takes time, so we’ll keep our eyes on the stars and our feet firmly on the ground as we work towards our goals.

What three things would make your larger work goals easier to achieve today?

As the saying goes, “Vision without action is a daydream and action without vision is a nightmare.” The first thing that comes to mind is the continued need to focus on our vision as we pursue our work goals.

Another critical factor is talent. We cannot realise the vision without a group of aligned and passionate individuals who aspire to create impact together. The ability to recruit and retain talent who are eager to build a career in the impact sector is essential.

We’re fortunate to have assembled a team with diverse backgrounds and specialised knowledge, allowing us to bring expertise in impact investment, management consulting, public policy, programme design, and impact measurement to the table.

Lastly, we cannot do this alone. Growing understanding and support from ecosystem partners is crucial. We were pleased to become part of the Temasek Trust ecosystem in July 2023, as they recognised how our work could contribute to new pathways in philanthropy and impact investing. Through support from Temasek Trust and other like-minded partners, we can multiply impact together.

When you look at the state of the world today, what is the one thing that gives you hope?

To me, hope is a sense of agency to improve our situation. The one thing that gives me hope is the sense of agency I witness in the individuals and partners around us. For instance, target segments our partners serve, such as tertiary-educated individuals with autism, seek higher-skilled employment opportunities as they strive to unleash their potential and gain greater independence. 

We also see service providers and funders proactively reaching out to learn more about innovative ways of giving. The government has shown a willingness to partner with the community and share their perspectives on issues they want to solve together.

All of these encounters make me feel hopeful that we can achieve so much more together in this space.