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Social Finance, Inc.

 10 Milk Street, Suite 1010
 Boston, MA 02108
[P] (617) 9399900
[F] --
http://socialfinance.org/
[email protected]
Jill Scherer
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INCORPORATED: 2011
 Printable Profile (Summary / Full)
EIN 27-4620963

LAST UPDATED: 07/02/2018
Organization DBA Social Finance, Inc.
Former Names --
Organization received a competitive grant from the Boston Foundation in the past five years Yes

Summary

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Mission StatementMORE »

Social Finance is dedicated to mobilizing capital to drive social progress.

Mission Statement

Social Finance is dedicated to mobilizing capital to drive social progress.

FinancialsMORE »

Fiscal Year Jan 01, 2018 to Dec 31, 2018
Projected Income $7,742,091.00
Projected Expense $7,267,234.00

ProgramsMORE »

  • Social Investment

Revenue vs. Expense ($000s)

Expense Breakdown 2016 (%)

Expense Breakdown 2015 (%)

Expense Breakdown 2014 (%)

For more details regarding the organization's financial information, select the financial tab and review available comments.


Overview

Mission Statement

Social Finance is dedicated to mobilizing capital to drive social progress.

Background Statement

Social Finance focuses on Pay for Success financing—a new public finance tool that helps to measurably improve the lives of people in need by driving government resources toward better, more effective programs. Our organization was founded in 2011 to introduce Pay for Success—a model pioneered by our UK-based sister organization—to the United States. In the years since, we have helped to build a field where public, private, and social sector leaders collaborate to scale up programs that work. To support individual projects and strengthen the field, we provide Advisory, Social Investment, Active Performance Management, and Market Education services.

Impact Statement

Over the past year, Social Finance's accomplishments include:
  • Launching two Pay for Success projects, mobilizing $15 million to improve outcomes for 2,400 individuals in Massachusetts and California
  • Supporting our partners in Oklahoma, who launched a $10 million Pay for Success project to reduce recidivism for up to 625 women
  • Spearheading the development of the nation's first outcomes rate cards--a new procurement and contracting tool that standardizes performance-based financing
Our goals for this year include:
  • Introducing the Public Impact Initiative, our partnership with governments to drive meaningful, measurable results for communities
  • Launching the first outcomes rate cards in the country
  • Developing Pay for Success projects to support environmental sustainability and resiliency

Needs Statement

As Social Finance looks to guide the robust development of a new field and achieve organizational sustainability, we are seeking general operating support. Flexible funds allow us to pursue opportunities that have the highest potential for advancing the Pay for Success field and related outcomes-based financing models. In addition, we are seeking:
  • Project support
  • Government partners
  • Investor partners
  • Partners for our new sustainability and resiliency focus area

CEO Statement

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Board Chair Statement

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Geographic Area Served

NATIONAL
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Organization Categories

  1. Human Services - Management & Technical Assistance
  2. -
  3. -

Independent research has been conducted on this organization's theory of change or on the effectiveness of this organization's program(s)

No

Programs

Social Investment

The Social Investment team works with governments to develop Pay for Success projects across several workstreams, including program design, data and evaluation, economics, finance, and legal. The aim of these projects is to improve social outcomes and generate financial returns. Social Finance also mobilizes capital to support Pay for Success projects, putting capital to work in service of society. Once projects launch, Social Finance plays a role in active performance management to ensure projects stay on track and drive positive results for communities in need.
Budget  --
Category  Human Services, General/Other
Population Served At-Risk Populations
Program Short-Term Success  Social Finance develops and launches Pay for Success projects that fund programs across diverse issues areas, including education, health, criminal justice, and workforce development. Target outcomes are specific to each project, but share the objective of improving people's lives and making government spending more effective and efficient. At the same time, it is a means of strengthening cross-sector collaboration by uniting uncommon partners—government, philanthropy, nonprofits, and impact investors—around common goals.
Program Long-Term Success  Social Finance views Pay for Success projects as a way to strengthen government's use of evidence in decision-making, driving more funding to programs that work. As the nation's largest funder of social services, government holds the key to large-scale impact. Pay for Success is a way to overcome the persistent mismatch between government spending and community results, between sensible prevention and downstream remediation, and between what we know from the best of social science and what we do when that gets clouded by urgency and politics. We see a future in which impact investors tie their money intrinsically to better outcomes for the most vulnerable citizens; mainstream public finance markets increasingly reward non-financial performance; high-performing nonprofits access sustainable funding that rewards performance; and governments base funding decisions on—and pay for—positive social outcomes. We believe that Pay for Success can make taxpayer money go further and allow governments to make more progress against inequality.
Program Success Monitored By  --
Examples of Program Success  When Social Finance was founded in 2011, few government or nonprofit leaders had heard of Pay for Success. Now, the majority of states have explored the model in some way--by introducing legislation, developing a project, or initiating a feasibility study. The Pay for Success market in the United States now stands at $200 million and is helping to improve the lives of more than 24,000 people nationwide.

CEO/Executive Director/Board Comments

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Management


CEO/Executive Director Ms. Tracy Palandjian
CEO Term Start Jan 2011
CEO Email [email protected]
CEO Experience Tracy Palandjian is Co-Founder and Chief Executive Officer of Social Finance, a nonprofit organization which is leading the development of Pay for Success financing and Social Impact Bonds, an innovative public-private partnership that mobilizes capital to drive social progress.

For more than a decade, Tracy has committed to building a more impactful nonprofit sector by re-imagining the role of the capital markets in enabling social progress. Inspired by Social Finance UK, Tracy co-founded Social Finance US in 2011 to develop the Pay for Success model in the United States. Prior to Social Finance, Tracy was a Managing Director for 11 years at The Parthenon Group where she established and led the Nonprofit Practice and worked with foundations and NGOs to accomplish their missions in the US and globally. Tracy also worked at Wellington Management Co. and McKinsey & Co.

Tracy is co-author of Investing for Impact: Case Studies Across Asset Classes. She is vice chair of the U.S. Impact Investing Alliance to the Global Impact Investment Steering Group and vice chair of the Board of Overseers at Harvard University. Tracy serves on the Federal Reserve Bank of Boston’s Community Development Advisory Council, as well as the boards of Facing History & Ourselves and the Surdna Foundation (where she chairs the Investment Committee). She is also a Director of Affiliated Managers Group (NYSE: AMG).

Tracy is a frequent speaker and writer on impact investing, social innovation and results-oriented policy making, having been covered in The Wall Street Journal, Atlantic, Economist, TIME, Forbes, and New York Times. A native of Hong Kong, Tracy is fluent in Cantonese and Mandarin. She graduated from Harvard College with a B.A. magna cum laude in Economics, and holds an M.B.A. with high distinction from Harvard Business School, where she was a Baker Scholar.
Co-CEO --
Co-CEO Term Start --
Co-CEO Email --
Co-CEO Experience --

Former CEOs and Terms

Name Start End
-- -- --

Senior Staff

Name Title Experience/Biography
-- -- --

Awards

Award Awarding Organization Year
-- -- --

Affiliations

Affiliation Year
-- --
Member of state association of nonprofits? No
Name of state association --

External Assessments and Accreditations

External Assessment or Accreditation Year
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Collaborations

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CEO/Executive Director/Board Comments

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Foundation Comments

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Staff Information

Number of Full Time Staff 41
Number of Part Time Staff 0
Number of Volunteers 0
Number of Contract Staff 1
Staff Retention Rate % --

Staff Demographics

Ethnicity African American/Black: 0
Asian American/Pacific Islander: 10
Caucasian: 32
Hispanic/Latino: 0
Native American/American Indian: 0
Other: 0
Other (if specified): 0
Gender Female: 30
Male: 12
Not Specified 0

Plans & Policies

Organization has Fundraising Plan? Under Development
Organization has Strategic Plan? Under Development
Years Strategic Plan Considers --
Management Succession Plan --
Business Continuity of Operations Plan --
Organization Policies And Procedures Yes
Nondiscrimination Policy Yes
Whistle Blower Policy Yes
Document Destruction Policy --
Directors and Officers Insurance Policy --
State Charitable Solicitations Permit --
State Registration --

Risk Management Provisions

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Reporting and Evaluations

Management Reports to Board? Yes
CEO Formal Evaluation and Frequency Yes Annually
Senior Management Formal Evaluation and Frequency Yes Semi-Annually
Non Management Formal Evaluation and Frequency Yes Semi-Annually

Governance


Board Chair Mr. Bracebridge H. Young Jr.
Board Chair Company Affiliation Arabesque Partners
Board Chair Term Apr 2011 -
Board Co-Chair --
Board Co-Chair Company Affiliation --
Board Co-Chair Term -

Board Members

Name Company Affiliations Status
Pamela Dippel Choney Retired Voting
Sir Ronald Cohen Global Steering Group for Impact Investment and The Portland Trust Voting
Karen Dynan Harvard Kennedy School Voting
Tracy Palandjian Social Finance, Inc. Exofficio
Edward L. Shapiro PAR Capital Management Voting
Ian Simmons Blue Haven Initiative Voting
Laurene Sperling Sperling Family Charitable Foundation Voting
Sandra A. Urie Cambridge Associates Voting
Bracebridge H. Young Jr. Arabesque Partners Voting
Nancy Zimmerman Bracebridge Capital Voting

Constituent Board Members

Name Company Affiliations Status
-- -- --

Youth Board Members

Name Company Affiliations Status
-- -- --

Advisory Board Members

Name Company Affiliations Status
-- -- --

Board Demographics

Ethnicity African American/Black: 0
Asian American/Pacific Islander: 1
Caucasian: 9
Hispanic/Latino: 0
Native American/American Indian: 0
Other: 0
Other (if specified): --
Gender Female: 6
Male: 4
Not Specified 0

Board Information

Board Term Lengths --
Board Term Limits --
Board Meeting Attendance % --
Written Board Selection Criteria No
Written Conflict Of Interest Policy Yes
Percentage of Monetary Contributions 100%
Percentage of In-Kind Contributions --
Constituency Includes Client Representation No

Standing Committees

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CEO/Executive Director/Board Comments

      

Foundation Comments

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Financials


Revenue vs. Expense ($000s)

Expense Breakdown 2016 (%)

Expense Breakdown 2015 (%)

Expense Breakdown 2014 (%)

Prior Three Years Total Revenue and Expense Totals

Fiscal Year 2016 2015 2014
Total Revenue $4,871,173 $4,199,681 $6,936,909
Total Expenses $5,025,648 $4,452,553 $3,529,878

Prior Three Years Revenue Sources

Fiscal Year 2016 2015 2014
Foundation and
Corporation Contributions
-- -- --
Government Contributions $79,085 $0 $0
    Federal -- -- --
    State -- -- --
    Local -- -- --
    Unspecified $79,085 $0 $0
Individual Contributions $3,618,135 $2,120,948 $6,636,093
Indirect Public Support -- $0 $0
Earned Revenue $1,156,310 $2,070,596 $291,900
Investment Income, Net of Losses $17,643 $8,137 $8,916
Membership Dues -- $0 $0
Special Events -- $0 $0
Revenue In-Kind -- -- --
Other -- $0 $0

Prior Three Years Expense Allocations

Fiscal Year 2016 2015 2014
Program Expense $3,994,266 $3,752,273 $2,980,910
Administration Expense $885,386 $641,793 $472,711
Fundraising Expense $145,996 $58,487 $76,257
Payments to Affiliates -- -- --
Total Revenue/Total Expenses 0.97 0.94 1.97
Program Expense/Total Expenses 79% 84% 84%
Fundraising Expense/Contributed Revenue 4% 3% 1%

Prior Three Years Assets and Liabilities

Fiscal Year 2016 2015 2014
Total Assets $6,783,382 $7,008,307 $6,976,111
Current Assets $6,730,387 $6,973,753 $6,952,238
Long-Term Liabilities -- $0 $0
Current Liabilities $679,877 $750,327 $465,259
Total Net Assets $6,103,505 $6,257,980 $6,510,852

Prior Three Years Top Three Funding Sources

Fiscal Year 2016 2015 2014
1st (Source and Amount) -- --
-- --
-- --
2nd (Source and Amount) -- --
-- --
-- --
3rd (Source and Amount) -- --
-- --
-- --

Financial Planning

Endowment Value --
Spending Policy --
Percentage(If selected) --
Credit Line No
Reserve Fund Yes
How many months does reserve cover? --

Capital Campaign

Are you currently in a Capital Campaign? No
Capital Campaign Purpose --
Campaign Goal --
Capital Campaign Dates -
Capital Campaign Raised-to-Date Amount --
Capital Campaign Anticipated in Next 5 Years? --

Short Term Solvency

Fiscal Year 2016 2015 2014
Current Ratio: Current Assets/Current Liabilities 9.90 9.29 14.94

Long Term Solvency

Fiscal Year 2016 2015 2014
Long-term Liabilities/Total Assets 0% 0% 0%

CEO/Executive Director/Board Comments

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Foundation Comments

Financial summary data in the charts and graphs above are per the organization's IRS Form 990s. Contributions from foundations and corporations are listed under individuals when the breakout was not available.
 
Please note, the combined audited financial statements above include private operating LLC's that Social Finance Inc. uses for its projects. For an isolated view of Social Finance, Inc.’s operating financials (non-consolidated), please refer to the sections in the documents titled "Supplementary Information" (e.g., pages 18 through 24 for FY16).

Documents


Other Documents

No Other Documents currently available.

Impact

The Impact tab is a section on the Giving Common added in October 2013; as such the majority of nonprofits have not yet had the chance to complete this voluntary section. The purpose of the Impact section is to ask five deceptively simple questions that require reflection and promote communication about what really matters – results. The goal is to encourage strategic thinking about how a nonprofit will achieve its goals. The following Impact questions are being completed by nonprofits slowly, thoughtfully and at the right time for their respective organizations to ensure the most accurate information possible.


1. What is your organization aiming to accomplish?

Social Finance is committed to establishing a system in which funds flow to performance and are contingent on results. More specifically, we believe that funds—from government, foundations, individuals, and other sources—should go to services with rigorously measured outcomes. Our projects focus on direct-service delivery and human-service issues, including health, criminal justice, education, workforce, children, and families.

Our work is motivated by the fact that effective social programs fail to reach a meaningful fraction of the people who could benefit from them. As the nation's largest funder of social services, the government could help the best nonprofits achieve scale by directing its support to programs that have been proven to generate positive outcomes for vulnerable people. Yet, this has not transpired; the book, Moneyball for Government, famously noted that less than 1 percent of government spending is backed by evidence of its effectiveness. Nonprofits capable of making a large impact are left with few financing options. While foundations have long played a critical role as early funders of programs, sustainable funding at scale often comes only with government contracts. As a result, top-tier nonprofits serve far fewer people than they otherwise could, at long-term cost to society.

Pay for Success is our primary focus as we consider it to be a disruptive innovation with the potential to create significant positive impact in people's lives. Pay for Success broadens access to what works by raising capital from private investors to expand a nonprofit program with a demonstrated track record of improving social outcomes—for example, increasing employment. If the nonprofit enables participants to achieve the desired outcomes during the investment, as verified by an independent evaluator, government repays investors. If it fails, the government owes nothing. While not a panacea, Pay for Success is a unique win-win for all parties involved.

Our vision for Pay for Success is that it will serve as a mainstream public finance tool to achieve measurable progress against inequality. We believe that it will do so by catalyzing systems change: Pay for Success will provide a means to scale effective nonprofits and increase the use of evidence in public-sector decision-making. Notably, Pay for Success encourages government to implement programs that have not been provided in the past because it transfers the risk of implementation to investors, who cover the upfront costs of services. Data on participants' outcomes—collected over the course of a project—present evidence of the value created as a result of the program and provide justification for government spending. Then, when government repays investor principal with modest returns at the end of a Pay for Success project, it is with the knowledge that taxpayer dollars are supporting a program that drives long-term benefits and cost savings to society. In this way, Pay for Success allows government to buy social outcomes rather than specific services.

2. What are your strategies for making this happen?

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3. What are your organization’s capabilities for doing this?

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4. How will your organization know if you are making progress?

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5. What have and haven’t you accomplished so far?

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