As part of our 10-year anniversary, Social Finance US is proud to highlight our Global Network, which consists of sister organizations in the U.K., the Netherlands, Israel, and India. We are grateful to be part of the Social Finance family that allows us to draw support and inspiration from one another. Here at Social Finance US, we recently sat down with each of our sister organizations to discuss some of their most exciting and impactful work in helping to advance social and economic systems across the globe.
Social Finance United Kingdom
What we’re working on: Social Finance UK created the Mental Health and Employment Partnership (MHEP) in 2015 to tackle the social injustice of high unemployment levels among people with mental illnesses. While 70% to 90% of people with a mental illness want to work, only 37% are in paid employment. For those with a severe mental illness, the figures are even more shocking with just 7% in employment. And yet, being in a meaningful job is a powerfully effective way of supporting recovery.
Working with social investors, local authorities, and National Health Service funding, we set up a Social Impact Bond to scale the internationally recognized Individual Placement and Support (IPS) model in the UK by supporting collaboration between mental health and employment services. The project has been a great success and MHEP recently celebrated helping its 1,000th client get placed into a job. You can find more details and key learnings in this blog.
We’re now delighted to be working with our friends at Social Finance Netherlands (NL) on a project funded by the European Social Catalyst Fund to expand the IPS approach across five European countries. Drawing on insights from our work in the UK, we’re helping country experts develop a roadmap for scaling up IPS in Croatia, the Czech Republic, Denmark, France, and Spain.
On being part of the Global Network: We share a focus on outcomes-based financial innovation, community engagement, and adaptive program design with our global Social Finance family. Each country has its own cultural and economic differences, but we face many of the same social challenges. Being part of such an enthusiastic international network opens up opportunities to build on our shared expertise by taking ideas and practices from one area to inform the development of similar services in other parts of the world. Our work with Social Finance NL on the European scaleup of IPS is a great example of this. There is abundant evidence of the benefit of IPS services from a range of international evaluations and we look forward to exploring the potential beyond the UK and Europe.
Social Finance Netherlands
What we’re working on: Together with the Ministry of Social Affairs and Employment, Social Finance NL is creating a fund that will enable employers to invest in an inclusive company. To date, employers have only received support to hire individuals who can’t easily find a job. For years we have advocated to focus not only on individuals, but on companies as a whole and the barriers they face in becoming more inclusive. It is a great milestone that we can team up with the Ministry to work on financial tools to enable this transition.
On being part of the Global Network: In many ways, the Social Finance Global Network laid the foundation for us to build Social Finance Netherlands. Long before our launch, our co-founders Ruben Koekoek and Björn Vennema were already working closely with Social Finance UK to learn the basics of Social Impact Bonds and to launch the first one in the Netherlands with support from ABN AMRO Bank. Since we formally joined the Global Network in 2018, we’ve continued to learn from our partners and deepen our relationships. Often, we find that we are working on very similar challenges in different contexts, so we are able to test new waters together. Whether it is Social Impact Bonds, workforce development, or fundraising, our work becomes stronger together. When we visited the Boston office of Social Finance US a few years ago, we were inspired by the team’s energy and commitment to the Social Finance cause—and the team has connected us to the main players in the U.S. pay-for-performance market. We are also excited about the start of a new project with Social Finance UK that will scale the UK’s proven IPS methodology across Europe.
Social Finance Israel
What we’re working on: Social Finance Israel recently launched its first Career Impact Bond, a workforce development project that will train and place young adults from the Druze minority in Israel into software development jobs. The project is a partnership with Appleseeds Academy, Koret Economic Development Funds, and the multinational tech company Nvidia. The model for this project was informed in large part by the extensive experience of Social Finance US. We had many conversations with staff in the U.S., who generously shared their insights and feedback and were excellent partners in our development process. The result is a Career Impact Bond shaped by the learnings in the U.S. yet uniquely adapted to the Israeli market. The project will be funded in a blended finance model, approximately 50% from a coalition of local impact investors and 50% from a government grant for innovation in tech workforce development.
On being part of the Global Network: Through the Global Network, we can apply and scale innovative financing instruments with common fundamentals across disparate populations and geographies. The Career Impact Bond is one example. Having professionals on the ground in five corners of the globe ensures that our projects are not only innovative and cutting-edge, but also tackling pressing challenges and doing so in ways that are fit for purpose.
Thanks to the Global Network, we are also able to make informed decisions in the face of uncertainty. Having the ability to consult and exchange with our Network peers over the course of the COVID-19 pandemic has been invaluable in ensuring minimal change or disruption to our Social Impact Bonds in operation.
Social Finance India
What we’re working on: Social Finance India is launching a Skill Loan Facility in partnership with the National Skill Development Corporation, which will help low-income youth get affordable, student-friendly loans to access specialized skilling programs. Inequitable access to financing is the biggest reason why most low-income students have been unable to pursue vocational training courses. Given their lack of banking and credit history, they face unaffordable interest rates (22-25%) and high rejection rates (>80%) in the formal banking sector. We are currently enrolling training partners and plan to launch the program in May 2021.
On being part of the Global Network: Social Finance US shared valuable insights and played a pivotal role in the ideation of the Skill Loan Facility. While the model has been customized to the Indian market, it draws parallels from the Career Impact Bonds launched by the U.S. team. The key principle of aligning incentives between students, training providers, and investors is fundamental to the design. Moreover, philanthropic funds are leveraged as “first loss guarantee” to attract catalytic capital from impact investors and provide student-friendly repayment terms. Another important commonality is the criteria used for screening programs—focused on employer linkages (historical data for students’ placements and salaries) as well as a soft skills component in the curriculum design.