Yes, the first idea is what I had in mind. The problem with getting financing in order to achieve results has a few possible solutions, I mention some below in the response to Kawoomba. Which other problems did you have in mind?
The advantages seem to me to work at various levels – improved incentives, much improved knowledge, and the possibility of a system emerging where you can leave it to the financial incentives and the feedback processes they create to bring about increased effectiveness and innovation.
I see where you’re coming from, but I see 3 advantages to paying for results. (1) This approach involves facing head-on the challenge of determining whether a charity is effective, which may be hard but is surely vitally important to answer. (2) It creates incentives for charities which are already effective to become even more so. (3) It could help to foster a system of charitable funding in which money goes to effective charities, not because experts have examined how they function and concluded that they work well, but just through the feedback processes which reward effective and punish ineffective charities. When charities operate in complex environments where the consequences of their activities are not always easy to predict, this sort of system might do better than expert evaluation.