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Kresge invests in Massachusetts Pathways to Economic Advancement Project

Social Investment Practice

The Kresge Foundation has approved a $250,000 program-related investment in the Massachusetts Pathways to Economic Advancement Project, a Pay for Success initiative that will help limited English speakers in Greater Boston make successful transitions to employment, higher wage jobs and higher education.

The project is a partnership between the Baker-Polito Administration, Jewish Vocational Services of Boston (JVS) and Social Finance. Both Jewish Vocational Services and Social Finance are current Kresge grantees.

“MA Pathways represents an important step forward in the evolution of outcomes-based financing. For the first time, we are measuring success in terms of gains in employment productivity and not just savings to the government,” says Kimberlee Cornett, managing director of Kresge’s Social Investment Practice. “Through this program, people who came to this country seeking a better life will gain important skills that will help them support their families and be more productive workers in the community. Kresge is pleased to invest in the futures of these families and to support the work of JVS in serving them.”

This innovative program will combine nonprofit expertise, private funding and independent evaluation 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.

The project is being carried out by the Commonwealth of Massachusetts, represented by the 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 Corp. and Jobs for the Future.

Pay for Success (PFS) initiatives provide tools for results-based government financing, leveraging private capital to fund experienced service providers and enable government to respond to identified needs. Investors are repaid based on the level of measurable success of the program. This data-intensive approach helps governments target funding toward approaches that work, while limiting risk on new policy programs.

This is the third PFS initiative launched in Massachusetts, and the first PFS project in the nation to focus exclusively on workforce development.

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.

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

“Social Finance is proud to be a part of the nation’s first Pay for Success project to focus exclusively on workforce development,” said Tracy Palandjian, Social Finance co-founder and CEO. “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.”