A new Pay for Success project in Massachusetts will help put 2,000 immigrants and refugees on the path towards achieving the American dream

We’re thrilled to be an investor in the Massachusetts Pathways to Economic Advancement Pay for Success Project, which launches today. Our Blended Catalyst Fund investment joins investments from 39 other investors including foundations, financial institutions, and donor advised funds to improve economic outcomes for a diverse population of approximately 2,000 English language learners who are immigrants and refugees living in the Greater Boston area.

The MA Pathways project is Living Cities’ fifth Pay for Success (PFS) investment. So in honor of our fifth PFS investment, here are five reasons why we invested in the MA Pathways project, based on the screening criteria we use to help us decide which PFS projects to invest in.

Impact

Currently, funding for Standard English classes is scarce compared to demand: there are over 16,000 known individuals on waitlists for English classes in the Greater Boston area. Limited English proficiency creates a fundamental barrier to employment and obstructs access to higher paying jobs for immigrants and refugees; compared to immigrants who speak English fluently, English language learners earn about $24,000 less per year, and over 50% of English language learners rely on cash assistance.

In response to increased demand for quality English language classes, Jewish Vocational Services (JVS) will scale its services to increase access to vocational English classes, skills training and better jobs to help over 2,000 individuals with limited English proficiency break through barriers to personal and financial stability.

Partnership

When we make an investment we’re betting on the team behind the project to collaboratively solve all the challenges that come their way. We are enthusiastically betting on the MA Pathways team‘s success. JVS is among the oldest and largest providers of adult education and workforce development services in Greater Boston, with over twenty years of experience specifically in providing skills training with effective outcomes. Social Finance brings deep expertise as both the intermediary who helped structure the transaction and the project manager and is a partner we’ve worked with on the New York State Workforce Re-Entry PFS Project.

Innovation

Like many non-profits, JVS is funded in a hundred different ways. And for most non-profits, grants are a key source of funding. The problem with grants is that they can come with strings attached, limiting the number and types of people an organization can serve. PFS changes the game for non-profits by providing a sustainable stream of funding that allows for service provider flexibility. The steady stream of financing from the MA Pathways project, for example, gives JVS more flexibility to be client-focused. Instead of having to design programs around the funding they receive, JVS can design programs around those they serve, allowing them to be more responsive to their client’s needs and as a result, achieve better outcomes for clients.

MA Pathways also stood out to us because it takes a multi-track approach by implementing and evaluating four distinct program tracks within the same transaction. The multi-track approach makes it possible for the MA Pathways project to serve more people than we’ve seen in past PFS projects while still providing targeted support to program participants.

Government Champion

A strong government champion is crucial to not only the short-term success of the project, but also for achieving enduring change past the life of the project. The Commonwealth of Massachusetts is a national pioneer in its support of PFS. In January 2012, the Commonwealth announced its Social Innovation Financing Trust Fund, a first-in-the-nation initiative to allow Massachusetts to enter into PFS contracts backed by the full faith and credit of the Commonwealth. This was a big deal - as an investor, one of the risks we face with PFS is appropriations risk, or the risk that the government payor will not appropriate the funds necessary to pay back investors if the project is successful. The Commonwealth’s full faith and credit pledge mitigates that risk and allows us make our investment with confidence that we will be repaid if the project succeeds. The MA Pathways project will be the Commonwealth’s third PFS project: the other two are the Massachusetts Juvenile Justice Pay for Success Project, which was one of our first PFS investments, and the Massachusetts Chronic Homelessness Pay for Success Initiative.

Programmatic Significance

In a political climate like the one we are currently faced with, in which the acceptance of refugees and immigrants remains uncertain, we believe it’s more important than ever to support people and organizations who believe - as we do- that we should be supporting economic opportunity for and advancement of all people, and that our nation’s diversity is its strength. It’s one of the many reasons we are so excited to be supporting a project like MA Pathways, which seeks to make a reality the hopes of those who came to this country for a better life.