Massachusetts has launched a social-impact bond to fund immigrant and refugee workforce development.
The goal is to build a model for improving employment rates and earning potential among Boston’s 230,000 non-native English speakers who, on average, earn $24,000 less per year than similarly-skilled English speakers.
Jewish Vocational Services will work with 2,000 adults in Boston for three years, offering vocational English classes, job search support and coaching. Investors will recoup up to $15 million based on the organization’s ability to deliver on three outcomes: participants’ earnings, transition to higher education, and program engagement.
Social Finance, which structured the deal, raised $12.4 million, half from Prudential Financial and Maycomb Capital. Among the 40 investors were Living Cities, Combined Jewish Philanthropies and high-net-worth and institutional investors brought in by Bank of America Merrill Lynch.
The pay-for-success program is the third social impact bond to launch in Massachusetts and the first committed to U.S. workforce development.