ImpactAlpha, October 22 – Healthcare network Humana is investing $5 million to enable nonprofit Volunteers of America to boost capacity and extend critical funding to local affiliates helping families cope with addiction.
Community organizations are struggling to meet demand for their services as the pandemic strains social safety nets and families face added financial and emotional pressures. Outcome-based funds are emerging as a solution to help nonprofits raise upfront capital from private investors, who get repaid as impact milestones are achieved (see, “Pay-for-success funds in San Francisco and Colorado raise $10 million for nonprofits”).
The fund, structured by Quantified Ventures, will allow local community organizations to offer Volunteers of America’s Family Focused Recovery. The affiliates can borrow from the fund, and repay impact investors through the revenue they generate from health plan partners like Humana, explained Quantified Ventures’ Alison Rein.
For healthcare networks like Humana, such experimental initiatives are a way of testing out “solutions to better serve their members,” she added.