NPX’s First “Pay-for-Success” Financing Exceeds Impact Targets
September 30, 2021
Criminal Justice Reform Nonprofit The Last Mile Used Results-Based Funding to Empower Incarcerated & Formerly Incarcerated Individuals with High-Paying Coding Work
San Francisco, CA - September 30, 2021 - NPX, a company transforming the way nonprofits are funded by explicitly linking capital with results, and The Last Mile (TLM), a nonprofit organization that prepares incarcerated individuals for successful re-entry to society, jointly announced today that their 4-year “Pay-for-Success” financing achieved 113% of its impact target.
NPX’s first of its kind “Pay-for-Success” financing structure, known as the Impact Security, is a proprietary financial product developed by NPX and Anna Pinedo, Partner and Co-Leader of the Global Capital Markets practice at Mayer Brown, that brings together donors and impact investors to fund nonprofits based on impact. The Impact Security is similar to a social impact bond (SIB), but with private philanthropists serving as the outcome payor instead of government.
TLM used the capital from the Impact Security to fund the first-ever web development shop inside a U.S. prison, known as TLM Works. Tech companies, startups, nonprofits and governments outsource coding work to TLM Works. TLM Works participants are hired and paid to do the work, allowing them to build a portfolio of experience while in prison that can lead to a job outside of prison. Work is a critical driver in reducing recidivism.
The Impact Security aligned TLM Works, donors and investors around a single metric -- participant hours worked. This focus and alignment paid off: the program exceeded its targets and had 0% recidivism among returning citizens.
- 20,298 participant hours worked vs. 18,000 goal
- Paid $16-$20/hour, 55x average prison wage
- 89% of TLM alumni are employed -- hiring companies include Slack, Dropbox, Square, Zoom, Snap, Pilot, Checkr, Datastax, Plaid, Affirm, VMWare, Chan Zuckerberg Initiative and others
“The Impact Security was instrumental for us in exceeding our goal to help justice-impacted people prepare themselves for careers in technology upon release and for none of the program participants to return to prison,” said Beverly Parenti, Executive Director of The Last Mile. “This gave us a 4-year runway and one metric to report on, which allowed us to focus on our work and deliver impactful results.”
The Impact Security’s design also demonstrated early success at bringing in new capital from investors, who have few opportunities to invest in nonprofits, and allowing donors to pay for outcomes after they happen. In total, 27 investors and donors participated in the deal.
“If you are an investor who wants to have an impact, this is the way to do it,” said Mark Newhouse, Founder of Left Behind Worker’s Fund and an investor in the project. “As the investment return is solely driven by the impact, this model powerfully aligns both the investor and the investee to work to maximize impact.”
Lindsay Beck & Catarina Schwab, Co-Founders & Co-CEOs of NPX, shared their gratitude and growth plans. "We're grateful to the donors, investors and TLM Works who allowed this new product to be successfully introduced and implemented in the market,” said Catarina Schwab. “Because of this pioneering effort, we are now able to replicate and scale this model to mobilize more money and drive greater outcomes to organizations across the impact field,” said Lindsay Beck.
To learn more about this deal, please refer to The Last Mile Impact Security Case Study.
NPX is transforming how nonprofits are funded by explicitly linking capital with impact. Learn more at www.npxadvisors.com.
About The Last Mile
The Last Mile (TLM) is a nonprofit organization that prepares incarcerated individuals for successful re-entry through business and technology training. Learn more at www.thelastmile.org.
NPX, a company transforming the way nonprofits are funded by explicitly linking capital with results, and The Last Mile (TLM), a nonprofit organization that prepares incarcerated individuals for successful re-entry to society, jointly announced today that their 4-year “Pay-for-Success” financing achieved 113% of its impact target.