Justin Bakule joined Social Finance in July 2021 to spearhead corporate engagement, with an eye toward building cross-sector partnerships that work for businesses and the communities in which they operate. We spoke with Justin about his journey to Social Finance and the work ahead.
What drew you to Social Finance?
Justin Bakule: I’ve tracked the progress of Social Finance since its inception. And Tracy and I have known each other since the beginning—we were fellow travelers in the social change space.
My career has, for the last 15 years, primarily sat at the intersection of social and environmental issues in the corporate space, where I’ve been working more broadly to find ways for the private sector to work in partnership with government and civil society to drive change. I’ve always had that shared throughline with Social Finance.
The one thing that’s always distinguished Social Finance for me is the unique combination of advisory work, impact investing work, and then what we call active performance management, where we’re measuring project outcomes and managing toward those outcomes. A lot of my prior work was primarily advisory—I didn’t have the benefit of engaging with ongoing service delivery. Now, I can do that while also engaging with the private sector.
Your hire represents an important shift to more deliberately engage the private sector. Your past work has centered on helping corporations make social impact part of their core business models, with the Shared Value Initiative (SVI), which you led for many years, being your most visible contribution in this area.
Why do you think it’s important for Social Finance to more intentionally cultivate relationships with corporate partners? And why is now the right time to make those connections?
Bakule: Well we’re already doing a lot of work with corporate partners on Career Impact Bonds and Pay It Forward Funds. And through this work we’ve learned that many efforts aimed at advancing economic mobility or prosperity, involve the private sector, whether it’s an employer or training provider or another organization.
So this idea of proactively building our muscles around corporate engagement is really important. How do we start building a presence more broadly with employers so they have an awareness of talent financing? My guess is the awareness level, particularly at big companies, is relatively low. I think the other thing that’s really interesting and that makes it a good time to engage with corporate partners is the current social environment. Many companies have made commitments, particularly in respect to providing more employment opportunities for people of color. This is an opportunity for Social Finance to ramp up our engagement with businesses and help them understand that we can help deliver on these commitments.
From working with companies over many years, it’s not a stretch to say that they frequently make commitments and then the specifics of how the work is going to get done come afterward. Our model addresses that issue. We focus on outcomes.
Strong employer engagement has driven a lot of the success we’ve seen with the Career Impact Bond. In Career Impact Bond with American Diesel Training Centers (ADTC), for instance, we’re seeing students graduate and get full-time diesel mechanic jobs thanks to ADTC’s connections with trucking companies like Penske.
Bakule: Yes, that’s right. One thing I find provocative about this work in particular is that there’s a business case for action. Penske and its peers in the trucking industry are facing a constraint—there’s a diesel technician shortage that constrains their ability to function. They’re either losing revenue, they’re costs are too high. A shortage of skilled technicians may very well be keeping trucks off the road. So, there’s a very clear business case within that situation. Therefore, trucking companies are not only willing to partner with ADTC but also commit to hiring ADTC graduates and covering the cost of their training.
Back in 2011 when Harvard Business School Professor Michael Porter and Mark Kramer, FSG’s co-founders published the Harvard Business Review article, “Creating Shared Value,” that ended up being the impetus for the SVI, they challenged business leaders to put social progress at the center of their work to generate value for their organizations and the world at large. Would you say that the pandemic has proven this shift in thinking is now more necessary than ever?
Bakule: The pandemic has certainly helped illustrate what a systemic shock to the business really looks like. There have been many people in the environmental movement, for example, that have been warning about the systemic shock of climate change and what that will mean for business, for decades. But the pandemic really illustrated that, bringing the world to a standstill seemingly overnight.
The challenging thing with helping businesses understand the risk of climate change, even though a lot of companies have made tremendous progress on reducing their carbon footprints, is that it unfolds in planetary time. But, the pandemic happened in an instant and brought things to life that had only been talked about theoretically. It also showed the need for cross-sector collaboration—you saw it in the response. We needed the government, the private sector, and civil society to get us back to where we are now.
I think the pandemic happened at a moment in which commitment to sustainability and the concept of shared value, among corporations, was at an all-time high after a 20- or 30-year journey. At that moment, CEOs and executive suites had a level of social awareness that was quite high and has only gotten higher. The pandemic and other critically important moments, including the murder of George Floyd and issues of racial equity, gun violence, and even our political environment over the last four years, have forced business leaders to grapple with issues that they were unaccustomed to addressing. Honestly, on many of these issues, corporate leaders finally grasped that silence had a tangible cost to them as well—lost employees, lost customers and so on.
A lot of corporate leaders had hung their hats on the Milton Friedman-driven, shareholder primacy mindset for a long time, but now we’re seeing more companies evolve markedly beyond that. Two years ago the CEOs for 250 U.S. headquartered businesses signed onto the Business Roundtable’s revised “Statement on the Purpose of a Corporation,” which said a company should serve stakeholders, not shareholders.
In our work at Social Finance, we have to triangulate ourselves in this business environment. Which companies want to meaningfully address the key problems affecting the people and communities we serve? How do we reach those leaders?
“I’m the kind of person who wants to talk to Career Impact Bond students or even go to ADTC for a week and be in the shop to figure out how hard the courses are—I just want to get as close to the impact as possible.”
You spent some time in the U.S. Peace Corps, working at the Mailan Ministry of Tourism in Gao, Mali. What led you to volunteer for the Peace Corps and how did that experience shape your professional outlook? Do you use any lessons learned there in your work today?
Bakule: I served in the Peace Corps with my wife, which was fantastic. We had this really transformative experience living in the Sahara Desert in northern Mali. At the time, I had earned my MBA and was working in strategy consulting with big companies—getting on a plane every Monday morning and coming back Friday night just to help someone get an extra quarter point of market share on a replacement truck tire. I remember sitting in a windowless conference room in Greenville, South Carolina in summertime and thinking this can’t be all there is to life. Next thing I knew, Greenville summers were the least of my worries. In Mali, we slept outside because it was so hot.
That experience did two things for me. One, it took my theoretical notion of what it meant to be impoverished and made it real. Folks interested in international development issues often see data from the World Bank about the number of people worldwide living on less than a dollar a day but to live with people who can’t afford to take their kids to the doctor is something else. And Mali is just a completely different cultural context which was really eye-opening.
I came away from the experience just incredibly humbled—far from thinking I had done anything to influence people’s lives or change anything. When I came back, I went back to working with big companies, but now on social issues related to their business in places like the Ivory Coast, Chile, and Haiti, in communities where improving conditions on the ground also helped their business. I was able to apply my business background and training and understanding the motivations of large corporations, along with the experience of what it’s like to be in a challenging place in the world.
I’m the kind of person who wants to talk to Career Impact Bond students or even go to ADTC for a week and be in the shop to figure out how hard the courses are—I just want to get as close to the impact as possible.
After leaving FSG, I started an organization to make gig economy jobs more just and fair for workers. I went out and drove for Uber and Lyft to understand how much money people driving for these companies were making. I got up at 4 a.m. to try to capture the early morning Logan airport runs. Then, I came back home and built a financial model to ascertain how the mechanics of the business actually worked if you were a driver. How much were drivers actually making? And the answer was not a lot—less than minimum wage. How can that be? Turns out, when you’re a “contractor,” minimum wage laws don’t apply.
As vice president of advisory and corporate engagement, your portfolio obviously encompasses a lot of diverse work. Are there any particular projects you’re excited about?
Bakule: One just happened to start when I did—it’s a Pay It Forward Fund in Florida. I’m very much looking forward to getting in at the beginning of the project and helping the state effectively invest in its workforce. And, of course, I’m reaching out to my corporate network—learn about Social Finance, learn about talent finance, and learn about how we have a potential solution for your talent challenges.