ImpactAlpha, February 28 – Boston-based Social Finance has pioneered student-friendly “career impact bonds,” a form of income-sharing agreement, to reduce the risks to workers of training for jobs in health care, IT and even diesel mechanics.
For Google, Social Finance will deploy $100 million to help 20,000 low-income workers gain “Google Career Certificates” in data analytics, IT support, project management, and user-experience design.
Social Finance will contract with nonprofits Merit America and Year Up and others during the 10-year run of the program to provide coaching, interview prep, job placement and stipends for expenses like childcare and transportation.
Students will repay interest-free loans of about $6,000 at $100 a month only when they get jobs that pay at least $40,000 per year.
“This fund is a new kind of financing model,” said Google’s Sundar Pichai, combining balance-sheet and grant capital to make training available to job seekers at no upfront cost.
“We’re in the perfect moment to have these strategies because we have 10.7 million unfilled job openings around the country,” Social Finance’s Tracy Palandjian told ImpactAlpha. “A lot of the skills of the American people have not transitioned to the new economy.”
Separately, Achieve Partners helps portfolio companies set up two-year apprenticeship programs in fields facing skills shortages.