“Give me your tired, your poor, your huddled masses yearning to breathe free…” These words from poet Emma Lazarus adorn the plaque on the Statue of Liberty, which has welcomed countless refugees, disconnected communities, fleeing immigrants from throughout the world, leaving their homes in search of safer shores in America.
A similar sentiment has also always underpinned Israel’s nature as a safe haven for Jews, (indeed, Emma Lazarus was herself Jewish) and has been a driving force behind immigration – “aliya” – to Israel since its founding.
Today, that sentiment persists in light of the ongoing war in Ukraine. This tragic conflict has brought new attention to innocent Ukrainians and Russians hoping to escape the horrors of conflict. Israel has been in a position to offer a much-needed lifeline.
But unfortunately, even after Ukrainian and Russian refugees are given vital asylum in the Jewish State, budgetary constraints, language barriers, and red tape often hinder their absorption into Israeli society. One key challenge that has emerged: addressing unemployment in these populations.
Where Funds Fall Short
When it comes to employment assistance programs, throwing money at the problem isn’t always the solution. Although well-intentioned, the billion dollars’ worth of initiatives that Israeli government [and non-government] organizations have fronted to assist individuals struggling to find suitable work have largely fallen short of their objectives – an unfortunate outcome of reactive-based programs.
This begs an important question: What will help improve the impact of spending to jumpstart upward social mobility for the refugees seeking a new life in Israel?
This is where Social Finance Israel (SFI) – a public benefit company (similar to a non-profit organization) that addresses social challenges in Israel – has been able to successfully intervene. SFI has alighted on at least one key answer to the critical challenge of employment for Ukrainian and Russian refugees: Career Impact Bonds (CIBs).
CIBs are a new model for financial aid, initially paid for by a mix of government grants and impact investments from social investors, aimed at integrating immigrants into Israel’s world-leading high-tech workforce. The model is as groundbreaking as it is simple – aid recipients pay for their training only after being placed at a well-paying job. It’s not just charity – it is an investment in life.
A Cyclical Impact
Why is this model particularly impactful? Unlike many Olim (i.e., those who choose to make Aliyah) warzone refugees arrive out of desperation and without the luxury of months-long preparation. As a result, these traumatized immigrants often come alone and unprepared, unable to speak Hebrew or English, and lack sufficient financial savings to get by or get ahead.
In addition to providing subsistence allowance, Social Finance Israel uses CIBs to finance intensive, mentored, 9-month full stack training programs offering front-end and back-end web development courses to aid recipients. When participants successfully complete CIB-backed programs, they are then guided through the process of résumé preparation and interviews, support that continues until they find suitable high-paying high-tech roles. Once employed, participants have a unique opportunity to contribute to Israeli society in ways that not only serve their new community but that elevate themselves and their families both culturally and financially.
Once participants secure a job and earn above a predetermined salary threshold, they begin to repay the investment in their education. And while the government funds are a grant, the institute subsequently repays investors for funding the training assistance (often with a return of ~4-7%). This model incentivizes financiers to repeatedly reinvest in CIBs.
The bottom line: investors do well by doing good; refugees find livelihoods with value and dignity. Win. Win.
One additional advantage: results are based on hard data, rather than on indeterminate assumptions that recipients are headed in the right direction. Indeed, this circular impact model provides a quantifiable solution that alleviates many of the employment, integration, and social status challenges that participants and their communities experience in Israel. Using such “big data,” the program is modified in real-time, guaranteeing even better outcomes.
The CIB successfully raised ₪5.2 million ($1.43 million), helping 180 immigrants from Russia and Ukraine find well-paying developer jobs within Israel’s high-tech industry. What’s more, Metathim, SFI’s additional CIBs, Mefathim, training Haredi men for hi-tech boasts a 65% employment rate while the first one, HeZnek HaGalil to integrate Druze into hi-tech in hardware positions is actively paying back investors. With such funding, SFI is uniquely poised to accelerate the integration of underrepresented populations into its innovation economy and give Israel’s renowned hi-tech ecosystem a concomitant boost.
Making a Difference
The impact of this program goes beyond investment figures – ultimately, it’s about bringing real solutions to real people who need them.
Here’s a testament from Alla, a 36-year-old funding recipient who emigrated from Russia in March 20, 2022 – one month after the invasion of Ukraine:
“I have always dreamed about working on high-tech projects that help to better people’s lives, and the coding courses introduce us to technologies that are used in real projects… I feel constant support and interest in my readiness to start working right after my graduation.”
A Sense of Community
Any country that hopes to follow Lady Liberty’s guiding light and embrace the huddled masses must do more to be sustainably hospitable, leveraging innovative tools for success. SFI is in the fortunate position to be scaling this innovative model into new relevant funds open to investment.
It’s not enough for countries to simply be places of refuge – they must strive to be a community, fit for all who need one. SFI is proud that our CIBs are bolstering this sense of community, and, eventually, participation in wider Israeli society.