This February, on the exact same day, two governors from two very different states — Nikki Haley, a Republican in South Carolina, and Dan Malloy, a Democrat in Connecticut — both announced social impact bonds to promote family care: one for low-income moms, the other for parents struggling with substance abuse. Both of these bonds (also known as “pay for success”) deployed private dollars to fund the scaling of a social program. If the project succeeds in meeting specific, predesigned metrics, the private backers will profit from their investment; if not, taxpayers don’t owe a penny more. Behind both of these innovative, cross-sector partnerships was Tracy Palandjian, CEO of Social Finance, a nonprofit intermediary between all the parties, who helped bring the “pay for success” model to the United States after seeing it first implemented in England in 2010.
NationSwell spoke with Palandjian by phone from Boston about the daily obstacles and excitements that come with rethinking how American social services can reach more people in need.
What’s the best advice you have ever been given on leadership?
I have two. The first one is an African proverb: “If you want to go fast, go alone; if you want to go far, go with others.” Just because one has a great idea and one could often accomplish a lot more, going at it alone is often insufficient if you really want to deliver a movement. That’s hugely evident in our work here. Imagine these very funky public-private nonprofit partnerships with so many stakeholders with very divergent motivations. What motivates a private investor? A sitting governor or mayor? The executive directors of these classic human service providers? We have everyone sit around a table to articulate a common goal — in this case, delivering results to our communities — when they have often conflicting frameworks and very different languages they speak in and very different world-views. Bringing them together around a very common goal among very uncommon stakeholders is something that we have found, yes, it’s challenging, but if we can rally this forth, we see enduring, powerful results coming out of those partnerships.
By way of background for my other one: I didn’t grow up in this country. I’m Chinese, and I grew up in Hong Kong. My grandfather whom I was very close to, his favorite quote was (translated to English): “Distance tests the strength of forces, time tests the hearts of men.” It really is a message about patience. A lot of things take time, and the people who can stay steadfast on that vision could achieve the most. My grandfather was born in 1903 in China. He took his courageous wife — my grandmother — and, at that point, four children, and literally fled the Second Wold War on foot, by boat and by train out of China into Hong Kong and then to Taiwan ultimately. He was a chemical engineer, completely self-taught. He left everything behind when he fled. Along the way, he lost two children. After they made it to safety, he started all over again. He made consumer batteries and completely rebuilt himself, his family and his business. I always think about their lives and what they were able to overcome and what they were able to accomplish. Sometimes, we take three steps backward to take five steps forward.
What’s your favorite book of all time?
One of my favorite books, which I’m proud to say is the namesake of our eldest daughter: a Chinese classic, “Tao Te Ching.” It’s just so poetic and so poignant about how one should live. And it’s full of these non-intuitive sentences like, “It is through being effortless that you can achieve the most.”
What innovations in your field are you most excited about right now?
Taking a step back, social impact bonds are probably the latest and the most recent comer to this broader investing landscape. I agree there’s been a lot of hype, but the reason why people are excited about it is that the impact is so direct. When our investors get their money back and then some, it’s because somebody’s life has been improved. This very articulated, metric-driven all-around life improvement, whether it’s recidivism or job attainment or education attainment or improved health outcomes, these are the metrics of each of our deals. Someone’s life improvement is the source of the return back to the investor, and that connection is really powerful. While the field started off in criminal justice (and still a lot of projects are focused on reducing recidivism), we’re excited to see there are a lot of projects in early education, in early childhood, in health and in workforce development.
How do you try to inspire others?
I just try to be who I am. I believe, as a person, I’m best when I’m aligned as a human being and I’m 100 percent authentic. I don’t try to say something because it will inspire others. I don’t try to do something because, well, that’s what I believe a good leader should do. I try to model good behavior for my colleagues. I’m not perfect, I have lots of limitations. I try to be a good parent and model good behavior for our children. I feel very strongly about this; I feel like there are too many lessons and advice that people give. People just need to be authentic.
What’s your proudest accomplishment?
I am probably most proud of the fact that I really think that I understand two cultures perfectly well. Obviously, I grew up in my own [Chinese] culture. My whole family’s still in that part of the world. You never forget your own culture and your native language. But I also think I’ve worked in America long enough and I’ve worked with enough different sectors and different kinds of people that I really understand how this country and this culture works, too. I think that’s just a huge skill to be able to be empathetic, to be able to step into the shoes of others. I think it’s a really important skill to have, especially for our work, which requires us to talk across sectors and work across disciplines.
What don’t most people know about you that they should?
I’m an artist at heart. That’s what I did as a young kid, all throughout high school and college, I painted a lot, I drew a lot, I experimented with all kinds of mediums. I miss that part of my life. I haven’t done much since I graduated from college. Now, I watch my kids do it, and it makes me very happy.
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This interview has been edited and condensed.