Impact Investments, Workforce & Economic Mobility, Education, Career Impact Bonds
The Career Impact Bond is a student-friendly model for financing job training that’s designed to help people facing barriers achieve economic mobility. Launched in 2020, Social Finance’s Career Impact Bond with Alchemy Code Lab aims to serve 300 students over three years. Alchemy’s 25-week, full-time online training program prepares students for mid-level software engineering jobs with employers such as Nike, Kroger, and Cambia Health.
The Alchemy Career Impact Bond eliminates financing barriers for students by covering upfront tuition costs and, in some cases, providing financing for living expenses. This increases access to software development careers for those who have traditionally been locked out. The program also aims to increase diversity in the technology sector, particularly for people of color, women, and LGBTQIA+ individuals.
Alchemy Code Lab has built a strong community of current and former students, instructors, community groups, and employer partners, which has enabled its success in attracting, supporting, and successfully placing students in mid-level software developer positions. Since its founding in 2016, Alchemy has made good on its commitment to provide world-class tech developer training and job support to “the architects of tomorrow.” Devon is one such architect. Before enrolling in Alchemy’s program, Devon worked a variety of entry-level jobs in publishing, manufacturing, insurance, and retail. While Devon had become interested in coding late in college, they felt it was too late to switch paths and break into the industry.
When the pandemic hit, Devon was minimally employed, financially unstable, and ready for a change. That’s when they learned about Alchemy.
“I was looking for places that had really generous scholarships—something where the funding was significant because there was no way I was going to make that choice without a clear financial path for myself,” said Devon. “What was really heartening about the Career Impact Bond was…the safety net. If this all goes wrong, I’m protected.”
The Career Impact Bond works like this: students enroll and complete their training with no upfront cost, and the aid of wraparound supports, like an option to finance living expenses. If their salary after the program exceeds $50,000 a year, they make monthly payments equal to 9.5% of their gross monthly income until they reach the payment cap or the payment term. If their salary falls below the income threshold in a given month, they have no payment obligation.
Devon took advantage of the living expense financing, which removed the financial burden of having to cover living expenses while in school and helped them focus on their studies while completing the intensive, eight-hour-a-day program.
“The ability to say, ‘I am in school full-time, I have enough of a stipend to cover my basic needs, and I can just focus on learning this stuff and not overextend myself’—that was huge.”
Devon graduated from Alchemy and landed a job as an Associate Consulting Engineer at CDW, an information technology company, in less than a month. They are making above the income threshold, so after the six-month grace period, they’ll start to make their income-based payments.
We’re proud to partner with Alchemy to help low-wage earners, especially those from underrepresented communities, transition into stable, economically secure careers in tech.
Investing in Skill Building: The Career Impact Bond
An FJC donor is putting philanthropic dollars to work by investing in economic mobility for low-income workers. The initiative is called the UP Fund, a $50 million pool of catalytic capital raised by Social Finance.
Scripps National News: Training You Don’t Pay Back Until You Land a Job
Tracy Palandjian discusses Career Impact Bonds as an approach to financing job training that aligns business incentives and promotes economic mobility.