September 19, 2019
Four Mass. Nonprofits Launch Pay-for-Success Program

March 19, 2018 — A consortium of four Massachusetts nonprofits today announced the launch of a pay-for-success, workforce development program that aims to provide language training and job placement for limited English speakers in Lowell seeking to advance their careers.

This is the third pay-for-success (PFS) initiative launched in Massachusetts, and the first PFS project in the nation to focus exclusively on workforce development. Its goal is to increase access to workforce development services, including vocational training, English language classes, job search assistance, and college-transitioning programming for approximately 2,000 adults over three years.

PFS is an innovative funding model that combines nonprofit expertise, private funding, and independent evaluation to transform how government leaders respond to chronic social problems.

Participating in the new PFS program are the two Lowell-based nonprofits—Coalition for a Better Acre (CBA) and the Cambodian Mutual Assistance Association (CMAA)—along with International Institute of New England and Jewish Vocational Service (JVS), both based in Boston.

Yun-Ju Choi, executive director of CBA, said, “By working with local partners and a great workforce development leader like JVS, we are helping more of our residents improve their English, get jobs, support their families, and contribute their talents and strengths to the local economy.” CMAA Executive Director Sovanna Pouv noted, “The program is for community members who want to not only improve their English, but to also find better, higher paying jobs, and these workforce development services fill a critical need for our immigrant and refugee communities here in Lowell.”

Social Finance, a Boston nonprofit, raised $12.43 million from 40 investors including financial institutions, donor advised funds, individuals, and foundations, to fund JVS services.

JVS, one of Greater Boston’s largest community-based workforce development and adult education providers, will offer four distinct program tracks that draw on its expertise integrating adult education with job readiness and employer relationships. Each program track will accommodate varying language levels, personal resources, employment objectives, and educational goals among program participants.

“This innovative source of private and public capital, where government pays only for what works, enables JVS to scale our proven workforce development model, reduce waiting lists, and prepare thousands of talented immigrant workers to meet the demands of our booming economy. We are thrilled to be part of the Commonwealth’s groundbreaking effort to creatively expand funding for high-quality human service delivery, and look forward to successfully delivering great results for our clients, investors, and partners,” said Jerry Rubin, president and CEO of JVS.

Tracy Palandjian, Social Finance co-founder and CEO, said, "This public private partnership would not have been possible without the support of impact investors committed to using their capital to advance the core values of our country, including Prudential Financial, Maycomb Capital, CJP, Living Cities, and others. This initiative will contribute to the economic mobility of immigrants and refugees and to the vitality of the Massachusetts economy for years to come.”

The project is being carried out by the Massachusetts Executive Office for Administration and Finance, the Executive Office of Labor and Workforce Development, and the Executive Office of Education, in conjunction with partners including JVS, Social Finance, the Harvard Kennedy School Government Performance Lab (GPL), Economic Mobility Corporation, and Jobs for the Future.

The returns investors will receive on this project depend on the achievement of agreed-upon outcome metrics. Outcomes will be measured on a quarterly basis, and success payments will be made quarterly. To the extent that outcomes are met as measured by the evaluator, the state will make up to $15 million in success payments. If the highest level of outcomes is not met, success payments to investors may be reduced, and if no outcomes are produced investors may face full losses.

JVS said it will be paid for the services it has agreed to provide as part of the project. Payments to JVS will not be contingent on client outcomes, although they will be held to certain enrollment requirements. JVS and Social Finance are both eligible for a success fee, paid only at outstanding levels of performance in the project.

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