

From Impact Incentives to Impact by Design
Why and How We Are Advancing the Integration of Impact into Finance
by Natasha Dinham & Bjoern Struewer, Co-CEOs of Roots of Impact
January 2026

You’ve heard us say it before, and we’ll say it again: embedding impact incentives into finance is one of the most powerful ways to move the needle toward positive impact. That’s why we pioneered new financial instruments and coined the term Impact-Linked Finance for this practice. Over the past decade, we’ve demonstrated how “better terms for better impact” can drive meaningful change – and we will continue to do so. The growing momentum confirms that Impact-Linked Finance is here to stay and is shaping a new way of impact investing.
What has been less visible, yet equally important, is how our work has evolved beyond designing and implementing impact incentives for carefully selected, high-potential enterprises and funds. The potential of our approach becomes far greater when Impact-Linked Finance is integrated into a broader strategy rather than used in isolation. Over time, we have developed and applied an expanding set of approaches that share one core principle: deploying capital to ensure it delivers the greatest possible impact in line with the risk–return expectations of those who provide this capital.
Alongside an incredible network of partners, we have designed blended funds and evergreen philanthropic investment vehicles that mobilize resources, align incentives, and accelerate impact. We have developed capacity-building approaches that turn traditional technical assistance on its head by rewarding enterprises for achievements rather than reimbursing costs for activities. And we have advised organizations exploring innovative and blended finance and introduced new ways to make these approaches more effective. Across all this work, our solutions have been designed to integrate impact from the outset. This evolution unfolded naturally as we responded to diverse needs and remained focused on delivering fit-for-purpose solutions.
We want to do more of this
Given the state of the world and the urgent need for bold, full-scale solutions, we believe it is essential to leverage the entire range of effective strategies to drive meaningful change. At the same time, we must uphold core principles that ensure finance is used in the most impactful way possible. In other words: delivering what’s needed across the full spectrum.
Going forward, we are embracing our own distinctive approach of designing and implementing capital strategies that create lasting change. From now on, we will be the trusted partner for capital strategies delivering impact by design – for impact investors, philanthropists, and catalytic funders.
What we mean by impact by design
Impact by design is about using capital deliberately and strategically to enhance positive outcomes. It embeds impact creation from the outset, ensuring that positive outcomes are generated through intentional design. It seeks to advance direct, indirect, and systemic outcomes across the entire spectrum of capital, spanning philanthropy, blended finance, and impact investment. This includes actively supporting organizations and funds receiving capital to strengthen their capability to deliver, measure, and scale impact.
We have developed a distinct set of impact-by-design solutions and methodologies and embedded these in our approach to deploying capital. These include a proven assessment and selection process, innovative financial structures, and targeted capacity-building support for portfolio organizations and funds. Many of these solutions are redefining how capital has traditionally been used.
Effective impact-by-design approaches include:
- EVERGREEN PHILANTHROPIC INVESTING: Turning philanthropic capital into catalytic investments for impact enterprises, recycling returns to fuel ongoing value creation.
- FAMILY OFFICE ENGAGEMENT STRATEGIES:
Investing in high-potential enterprises aligned with the family’s own business sector, leveraging deep engagement and family networks to amplify impact.- MISSION-FIRST CAPITAL FOR INNOVATION:
Seeding and scaling high-impact disruptive technologies, guided by stewardship governance to unlock their full potential.- BLENDED FUNDS WITH IMPACT ENHANCEMENT:
Combining capital stacks with different risk/return profiles, technical assistance (TA), and impact incentives. Catalytic funders help de-risk and amplify impact, while commercial investors drive scale.- IMPACT-LINKED FINANCE:
Driving accountability and aligned incentives by tying investment terms or fund manager compensation to predefined impact targets.
Quite literally, design matters to ensure that these solutions work as effectively as possible. We understand how value is created. Building on over a decade of experience in Impact-Linked Finance, we’ve developed a leading track record in uncovering high-potential opportunities and unlocking their impact and business value. This is what makes the difference.
Committed – by design
Our mission is not limited to a specific investing or funding practice. What drives us is the commitment to make finance work for positive impact — by refining and reshaping it so that it becomes truly fit for purpose. Sometimes this means introducing small tweaks, other times it calls for more fundamental redesigns. In all cases, our work is guided by the belief that finance can deliver better outcomes when it is intentionally designed to do so.
We are excited to leverage the full set of strategies and tools – and, when necessary, pioneer new ones – to ensure that the full potential to create lasting impact is realized in line with the priorities of our clients. We are committed to delivering IMPACT BY DESIGN.
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