Bank of America and Social Finance Inc. Study Reveals Potential to Expand Services for Military Veterans Through Innovative Pay for Success Programs
New Research Identifies Opportunities to Increase Funding and Collaboration to Scale Effective Services That Measurably Improve the Lives of Veterans and Their Families
Feb. 18, 2015 /3BL Media/ - Bank of America today announced the results of a first-of-its-kind study exploring opportunities to use pay-for-success (PFS) programs and other innovative forms of social financing and impact investing to expand social service programs for U.S. military veterans. The study was conducted in partnership with Social Finance, a nonprofit intermediary organization dedicated to mobilizing investment capital to drive social progress through innovative funding models, with the findings now published in a new report, “Improving Outcomes for Veterans: Assessing Pay for Success Opportunities.”
Findings from the study were shared today with senior government and military officials, corporate leaders and veteran-focused service organizations at the George W. Bush Institute’s Military Service Initiative Summit in Dallas. During the event, Bank of America also shared plans to collaborate with the Wounded Warrior Project and Social Finance to further examine the potential for a PFS program to expand workforce development services for veterans, based on findings from the study. These services are vitally important as veterans reenter civilian life and seek employment.
“Thanks to this research, we’ve identified several areas where innovative forms of social finance could help expand services greatly needed by our growing military veteran population,” said Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch. “Providing investors the opportunity to direct capital to services proven to produce positive outcomes gives them the chance to invest in accordance with their values and improve the lives of those who have protected ours.”
Potential to scale veterans services for greater impact
With more than 22 million veterans living in the U.S. today, and as many as 300,000 additional service members expected to leave the military annually over the next five years, services for these men and women will increasingly require additional resources. For this reason, Bank of America engaged Social Finance to help assess the viability of using PFS programs to scale the operations of organizations proven to be effective but that lack the funding needed to have an even greater impact. The availability of sufficient metrics to establish the effectiveness of these services is what makes a measurable PFS program possible.
“There are many effective organizations providing veteran services across the nation, however most need greater and more reliable funding to grow their programs,” said Tracy Palandjian, CEO and co-founder of Social Finance Inc. “Our research has helped identify interventions and programs ready to scale to help more veterans stay healthy, be productive and enrich their lives. At the same time, we hope that these insights will serve as a catalyst to help drive government resources toward programs that measurably improve the lives of veterans and their families.”
The study reflects input from more than 80 interviews with leaders across multiple sectors including military, finance, government, academia, nonprofits and philanthropy – and the screening of more than 70 veteran-serving organizations. Through this study, Social Finance analyzed five key factors for potential PFS programs, including specific veteran populations, evidence-based programs, social service providers, economics and metrics, and outcomes for payors. Among a number of opportunities identified through this research, three have been highlighted where PFS programs could play a role to scale much-needed services:
- Employment and wellness: Veterans aged 18 to 34 experience unemployment rates higher than those of civilians in the same age group. Findings from the report show potential for a PFS project to support organizations that provides supported employment with mental health services to veterans who are unemployed and have a mental-health diagnosis, such as depression or post-traumatic stress. According to the report, these services increase employment and earning potential, while decreasing reliance on health care services and generating greater tax revenues from increased lifetime earnings.
- Chronic disease management: The fastest-growing segment of health care spending for veterans comes from those with one or more chronic diseases, including diabetes, chronic obstructive pulmonary disease, heart conditions, renal failure, dementia, and stroke. The report notes that a PFS demonstration project may provide home-based transitional care to prevent hospital re-admissions for pre-9/11 veterans over the age of 65 who are diagnosed with chronic disease. By improving health outcomes and helping veterans become more self-sufficient, according to this report, savings could be achieved by reducing re-hospitalizations and hospital stays.
- Housing support for female veterans: Female veterans are overrepresented within the homeless population, with their numbers increasing even as overall veteran homelessness is decreasing. Current estimates of homeless female veterans range from 4,000 to 11,000. The report highlights that a philanthropically-funded initiative may reduce or eradicate homelessness for post-9/11 female veterans not currently served by the U.S. Department of Veterans Affairs. According to the report, such an initiative could help reduce the reliance of female veterans on county-level services, and improve the health and educational outcomes for children of female veterans.
“This study helps us understand some of the most important needs of our nation’s veterans and the potential to develop impact investment opportunities that could benefit them, the public sector, private investors and service organizations alike,” said Lewis Runnion, director of military affairs for Bank of America Merrill Lynch.
Click here to download “Improving Outcomes for Veterans: Assessing Pay for Success Opportunities” and read about other promising initiatives and recommendations on steps that could be taken to make them PFS-ready. Bank of America has been serving the nation’s military for 95 years, and is committed to helping veterans and their families transition to civilian life through employment, housing, education and wellness programs. To learn more about Bank of America’s military services, please visit www.bankofamerica.com/militarysupport.
Social Finance Inc.
Social Finance is a nonprofit organization that is dedicated to mobilizing investment capital to drive social progress. The organization focuses on structuring and managing impact investments that will unlock capital to fund effective solutions to persistent social problems and drive an outcomes-focused social sector. The firm develops Social Impact Bonds and Social Impact Investments, innovative multi-stakeholder opportunities that scale performance-driven social programs, create taxpayer efficiencies, and generate financial returns for investors.
Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 48 million consumer and small business relationships with approximately 4,800 retail banking offices and approximately 15,800 ATMs and award-winning online banking with 31 million active users and approximately 17 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
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