Putting Capital to Work: A guide for investing in people, pathways, and prosperity

The Challenge

Across the United States, too many people who want to work struggle to access the skills, training, and jobs that would put them on a path to economic mobility. The barriers they face are real and varied: the rising cost of training and education, the financial challenge of going without income while upskilling, the erosion of trust in traditional degree programs, and growing anxiety that automation and AI may eliminate the very jobs for which they are training. At the same time, employers in healthcare, skilled trades, advanced manufacturing, and other high-demand fields face persistent talent shortages that hamper economic growth and productivity.

Finally, and most importantly, there is far too little capital to resolve these disconnects. The public and philanthropic resources available to help people train for and access good jobs fall far short of addressing the problem. To close that gap, we must direct existing funds toward the programs that genuinely deliver economic mobility, seek ways to stretch those scarce dollars further, and bring in new funding sources.

Our Approach

Since its founding in 2011, Social Finance has designed partnerships that bring together government, philanthropy, and business leaders, and put capital to work in new ways to improve systems and expand economic opportunity. Our Workforce and Education Investments practice designs, builds, and manages outcomes-based investments that sustainably finance workforce training, address labor market needs, and promote meaningful job placement and economic mobility for people who face barriers.

About The Paper

Our team has learned a great deal designing models that finance learners and training. This paper shares six principles we have found to be critical in structuring funds and investing in distinct opportunities. These principles, while sequential, are not always linear; in practice, they can be applied iteratively and revisited as new information emerges, partnerships evolve, and market conditions shift. The accompanying case studies illustrate each principle in practice.

Several of these principles were shaped as much by what we tried and walked away from as by what worked. To be truly catalytic and drive innovation, capital must be willing to take risks, make bets, and abandon what doesn’t work. We hope our candor about what we learned will help others apply these lessons to their own work.

A Resource for Workforce Practitioners and Funders

We have written this paper as a working set of principles that workforce funders and practitioners can adapt to their own context. This paper is for:

• Funders, interested in stretching capital further and creating opportunities for reuse;
• Training providers, assessing financial health, operational capacity, and impact, and considering how thoughtful financing can strengthen rather than strain programs;
• Public sector partners, considering how private and philanthropic capital can complement public budgets and share risk through outcomes-based structures; and
• Practitioners designing or managing such investments, to draw on the principles, tradeoffs, and lessons we have gathered over many years of doing this work.

Why Now

We share this paper now because the need has never been more urgent and capital continues to be scarce. Inspired by recent conversations in the field about new models (including “Lessons Learned: Financing Workforce Education and Training through Outcomes-Based Repayments” by Harry Holzer at Georgetown University’s McCourt School of Public Policy and the Social Finance Institute’s David Socolow), we are pleased to share our own insights here. We hope they will provide actionable, practical guidance to those seeking to achieve impact in workforce development.

We sat down with leaders across the field to talk about funding workforce development and the ideas behind Putting Capital to Work. Watch the conversations.

Design Principles: Overview

During our engagements, we apply these principles iteratively; they do not always follow the linear order presented here. For example, we might conduct an initial assessment, begin to assemble partners and data, and then return to assessment to learn more about a specific industry or geographic context.

Download the full framework to learn more.

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