The project: A collaborative effort to improve educational outcomes

Social Finance International partnered with Fundación Salvador del Mundo (FUSALMO) and BID Lab to design El Salvador’s first outcomes-based contract (OBC) to tackle secondary school dropout rates and enhance students’ 21st-century skills. By tying funding to measurable results, this initiative ensures accountability, drives innovation, and promotes long-term impact in the country’s education system. The project leverages EdTech tools and the STEAM (Science, Technology, Engineering, Arts, and Mathematics) approach to equip students with critical thinking, problem-solving, and digital skills essential for their future success.

This outcomes-based contract aims to reach approximately 1,300 students in Soyapango and Ciudad Delgado. To incentivize education outcomes for students, the payments are tied to the achievement of two key student outcomes:

1. Percentage of students in 7th, 8th and 9th grade promoted to the next school year.

2. Improvement in students’ 21st-century skills measured by an increase in a STEAM skills test score.

To achieve these outcomes, service providers implement a comprehensive intervention that includes direct academic and socio-emotional support for students, teacher training, and engagement with families to ensure their support for their child’s educational progress. The project also delivers extracurricular STEAM classes involving EdTech.

Key elements of the approach

To develop this groundbreaking initiative, Social Finance International worked closely with partners to launch and support the implementation of the outcomes-based contract. We:

• Defined target population and schools; established minimum service elements; and determined learning objectives for students in the 7th, 8th and 9th grades.

• Conducted extensive research and market outreach to inform program design, cost estimates and the selection of service providers.

• Estimated the total budget required for the programme and the appropriate value of each outcome, and designed various financial incentives to encourage the achievement of outcomes.

• Led an initial due diligence of service providers to identify their operational model and assess their capabilities to work under an outcomes-based approach.

• Delivered training sessions and co-designed workshops to strengthen local capacity to implement an outcomes-based approach, including outcome funders and service providers.

• Led the program’s learning agenda, identifying, capturing and systematizing the key lessons learned from implementation.

This outcomes-based contract marks a significant step toward embedding results-based financing into El Salvador’s education system and fostering a culture of evidence-based decision-making.

Lessons learned: Insights for future education-focused programs

• The importance of timing in education projects. Since outcomes often need to be measured at fixed points in the school year, program design, contracting, and mobilization must be closely aligned with the school calendar. Schools run on pre-defined calendars, and successfully integrating an outcomes-based contract aiming to achieve ambitious results during the school year requires careful planning. Ensuring service providers are able and ready to work with students from the very first days of the school year can maximize the chances of success. It is essential to consider timing from the outset to ensure smooth implementation and maximize the program's impact.

• In-country stakeholder leadership as a driver of a rapid and collaborative design. Strong leadership from in-country stakeholders was essential to accelerate the design of this outcomes-based contract. By aligning with FUSALMO’s agenda and adapting to the priorities of in-country actors, we fostered a highly collaborative process that enabled the contract design to be completed in less than 12 weeks. Key factors for this rapid progress included early stakeholder engagement, clear decision-making processes, and a shared commitment to flexibility and problem-solving.

Looking ahead: Expanding the impact of outcomes-based education

• Generating insights into effective models to improve educational outcomes. This project provides valuable insights into two key areas: the differences between different two types of social enterprises( one dedicated to use technology as a transformative means of the teaching-learning process and another rooted in traditional learning processes that has since embraced technology as a deliberate innovation) in driving educational outcomes, and the added value of STEAM and EdTech tools in enhancing student motivation and improving learning outcomes. By exploring these two elements, the project contributes to a deeper understanding of how various models and approaches can be leveraged to achieve meaningful educational impact.

• Laying the foundations to demonstrate the impact of outcomes-based approaches in improving educational outcomes in Central America. As the first pilot of its kind in El Salvador, this project serves as a proof of concept, showcasing how outcomes-based approaches can drive better educational outcomes. By demonstrating a new way of structuring and financing interventions, it should inspire other actors to explore similar models, ultimately fostering a broader shift toward innovation and impact-driven approaches in education.

Interested in partnering to advance results-based education models? Connect with us:

📩 María Alejandra Urrea, Associate Director, Social Finance International – maria-alejandra.urrea@socialfinance.org.uk

📩 Louise Savell, Director, Social Finance International – louise.savell@socialfinance.org.uk

Partners: FUSALMO | BID Lab

Location: El Salvador