Social Finance, UP Fund

Catalyze economic mobility through high-quality job-training programs for low-income individuals at scale.

The Scale of the Problem

Economic mobility in the U.S. was declining with income inequality reaching levels last seen during the Great Depression, even before the COVID-19 pandemic. Two-thirds of jobs required postsecondary credentials, and rising education costs kept valuable training out of reach for more than 5 million young adults. As the labor market adjusts to a changing economy after the pandemic, jobs in certain sectors will disappear, but new jobs will emerge that require different skills. New models are needed to fund retraining and upskilling of the tens of millions unemployed workers to meet the demand for recession-resistant jobs in fields like IT and health care. By enabling new pathways to economic mobility for all individuals, we can help the nation build toward an equitable recovery.

Only 1/3

of low-income students have post-secondary credentials, which are required by 2/3 of U.S. jobs

35%

decline in federal funding for workforce development since 2000

>5M

young adults lack the skills necessary to compete in today’s economy

A Promising Solution

Social Finance developed the Career Impact Bond, a Pay for Success financing tool that provides students with affordable, high-quality workforce training for in-demand careers.

This model flips the current approach to student debt on its head and strives to help students access jobs that will substantially increase their earnings and empower them to achieve financial stability.

$40-50M

of catalytic impact investment capital generated for 15 Pay for Success projects

8-12

career impact bonds focused on recession resistant jobs in IT, skilled trades, and health care

Thousands

of young adults in good jobs with increased wages

Blue Meridian's Investment

Our investments support of the launch of Social Finance’s UP Fund which will serve young people who would otherwise not have the job training and access to in-demand careers financed through their innovative Career Impact Bonds. The funding model is two-pronged. First, Blue Meridian is making a multi-year impact investment which is part of the initial $22.4 million raised by Social Finance. Second, Blue Meridian is making a one-time philanthropic investment to enable Social Finance to explore operational improvements and develop a plan for expansion.

$15.3M impact investment over 3-4 years

One-time philanthropic investment of $4.5 million

A sustainable model to break down barriers to economic mobility

Why We Are Excited About Social Finance, UP Fund

Every organization in our investment portfolio is ready to embark on significant scaling and displays a multitude of strengths. Here are some highlights of the tremendous potential we saw in Social Finance’s UP Fund scaling strategy that that motivated us to invest:

Proven Track Record

Social Finance has extensive experience managing the implementation of social impact bonds and pay-for-success models. They’ve launched fifteen Pay for Success projects, mobilized approximately $150 million to support about 10,000 individuals, and engaged with more than 150 investors including banks, foundations and private investors.

Social Finance’s track record of successfully implementing similar impact bond projects instills a high degree of confidence in its ability to manage the UP Fund’s growth and the implementation of their Career Impact Bonds.

Strong Leadership

Tracy Palandjian is the Co-Founder and CEO of Social Finance and a leader in the impact investing field. For over a decade, she has dedicated herself to re-imagining the role of capital markets in enabling social progress. Before co-founding Social Finance, Tracy spent 11 years as Managing Director of The Parthenon Group, where she established and led the Nonprofit Practice and worked with foundations and NGOs to accomplish their missions in the US and globally.

She is co-author of “Investing for Impact: Case Studies Across Asset Classes,” a report on the evolution of the impact investing industry. She is also vice-chair of the U.S. Impact Investing Alliance and a trustee of the Surdna Foundation.

Sustainable Economic Model

To align incentives between investors and training providers, the UP Fund will pay a portion of student tuition costs upfront, yet it pays the remainder after specific outcomes are achieved – such as students completing the training or graduates obtaining employment. The UP Fund aims to provide a single-digit monetary return on investment for impact investors. With philanthropic support, Social Finance aspires to establish an evergreen fund that will reinvest any returns from student repayments in future career impact bonds to use for other students. Combined these components which serve impact investor, student, and training providers, create a platform for economic sustainability.

About Social Finance

Social Finance is a nonprofit organization dedicated to mobilizing capital to drive social progress. The organization brings partners together, often working across the public, private, and social sectors, to measurably improve the lives of those in need through a set of financing strategies called Pay for Success to align sources with impact.

In addition to pioneering Career Impact Bonds, Social Finance’s strategies also include Social Impact Bonds, which leverage public-private partnerships to fund effective social services, and outcomes rate cards, a tool that enables government to take a system-wide approach to defining prices for targeted social outcomes and pursuing performance-based funding across a set of contracts. Social Impact is launching the UP Fund to provide low-income individuals access to high-quality job-training programs across industries and U.S. geographies.

Learn more about Social Finance

Tracy Palandjian

Co-Founder and CEO

Tracy Palandjian is the co-founder and CEO of Social Finance. For over a decade, Tracy has worked to re-imagine the role of the capital markets in enabling social progress. Inspired by Social Finance UK, Tracy co-founded Social Finance in Boston in 2011 to build the Social Impact Bond field in the United States.

Get Familiar with Social Finance

Co-Founder and CEO, Tracy Palandjian, explains Social Finance’s Pay for Success model.

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