Tiffani Williams: Welcome to our seventh episode of Workforce Realigned, a series within the Economy Matters podcast produced by the Federal Reserve Bank of Atlanta. Workforce Realigned is a production of the Federal Reserve Banks of Atlanta and Philadelphia, in partnership with Social FinanceOff-site link. Note that the Federal Reserve Bank of Atlanta does not provide grants or funding to the general public or to partner organizations. We do not endorse or make any representations as to the suitability of partner organizations or their programs, and we do not advise on distribution of funds by partners. My name is Tiffani Williams, and I am both the senior adviser for Community and Economic Development at the Federal Reserve Bank of Atlanta and host of the Workforce Realigned podcast series. Today, we will discuss the $100 million Google Career Certificates Fund, which supports an innovative investment program that aims to empower more than 20,000 learners to realize over $1 billion in aggregate wage gains over the next decade. I'm excited to welcome Hector MujicaOff-site link, head of economic opportunity at Google.org; Troy BlackwoodOff-site link, head of structured investments at Google; and Jake EdwardsOff-site link, vice president of impact investments at Social Finance. So let's dive right in. Hector, I'm wondering if you could tell us a little bit about the origins of Grow with Google, and the Google Career Certificates?

Hector Mujica: Absolutely. First and foremost, Tiffani, thank you so much once again for having us here today. I'm excited to dive into this conversation, and happy to offer a little bit more background, and a bit about the progression of the Google Career Certificates. First, we at Google truly believe that technology has the power to unlock new opportunities for growth. But at the same time, we acknowledge that not everyone has equal access to those opportunities—and that opportunity is created by technology, and the very nature of work, by extension, are fundamentally changing. We know that according to the Brookings Institute, nearly two thirds of all new jobs created since 2010 require either a high or medium level of digital skills. We also know that communities of color, women, and rural communities are all overrepresented in those who lack adequate pathways to gain these essential digital skills. In an economy that's changing—that's becoming increasingly digital—if we don't address the equity problem head on, it can certainly augment exclusion. This is why, since 2017, we started to focus on ensuring that all Americans have equitable access to the promise of the digital economy. We started by launching Grow with GoogleOff-site link, which is an initiative to help Americans gain the skills they need to grow their businesses and careers. Alongside that launch, we made a global five-year commitment from Google.org, Google's philanthropy, to provide a billion dollars in grants and over a million volunteer hours to help nonprofits working in key areas that will boost economic opportunity and mobility.

One of the end outcomes of this process was identifying emerging and promising trends, one of which was the need to rapidly skill individuals for in-demand, entry-level careers in tech through alternate pathways like employer-backed credentials. So, in 2018 we launched Google Career CertificatesOff-site link, which were aimed at expanding opportunities for workers, especially those without college degrees. I'll refer to these individuals throughout the rest of the podcast as STARs: people that are Skilled Through Alternate Routes. The Google Career Certificates are credentials from Google, but they are company-agnostic. We're not training people to work at Google or exclusively with Google technologies, but rather investing in creating a more diverse workforce through online training programs designed to teach job-ready skills in high-growth, high-demand career fields in order to close the opportunity gap. Over the years we've expanded from IT support, which was the first career certificate, to cover other in-demand and growing fields—including project management, UX design, data analytics, among several others—and provided the Google Career Certificates for free to all US community colleges, and many workforce development nonprofit organizations. In that process, we also quickly recognized that for many individuals with multiple barriers to employment, a leading technical curriculum is simply not enough. We needed to address the barriers they faced, such as a lack of preparation for professional environments, and the everyday needs that happen in life that get in the way of learning—like having to work several jobs just to provide for a family.

With this in mind, Google.org has worked to ensure that the Google Career Certificates reach those workers who need them the most, by deploying technical content alongside what we call wraparound supports. This means working with best-in-class workforce development nonprofit organizations, like Per Scholas and Goodwill, to provide supports like child care, and transportation credits or living stipends, to remove the barriers that life puts in the way. Combine that with essential job readiness and social/emotional training, to ensure that everyone that's receiving these career certificates is ready for job environments. This includes things like interview skills, and teamwork, and job placement support, and many other essentials that we tend to take for granted. And lastly, we know that preparing talent is just one part of the equation. We also have to ensure that job demand is present, which is why Google has also assembled the Google Employer Consortium, which has over 150 companies—including Google—that recognize the certificates in hiring and consider graduates for relevant open roles.

Williams: Thanks so much for that overview, and also for telling us a little bit more about some of the challenges you all were looking to solve as you embarked on this program. Jake, I'm hoping you can tell us from your perspective a little bit about the beginnings here—how you all got involved in this work, and what your early conversations looked like.

Jake Edwards: Absolutely. Our involvement predates this particular initiative, and we're grateful for the ongoing and longstanding support of Google.org. Through that support, starting in 2017, we were able to incubate and really start pressure-testing what a new, innovative, outcome-based financing model could look like. Through that work, we've been able to test and evolve and integrate on applying those models across the short-term education and training ecosystem over the past several years. In that vein, we were incredibly excited to get an outreach from Google in May of 2021 to begin some exploratory conversations about how that work might intersect with some of their ambitions and aspirations to identify sustainable and scalable approaches to availing the career certificates across the country. The conversations evolved and got momentum quite quickly, and we took out our blank pieces of paper and we ultimately worked towards coming up with: what were the guiding principles for this work, and how should we set up something that is innovative and truly "first of its kind” in the market? And what that looked like in practice was acknowledging and aligning on who we wanted to serve: we wanted to serve, as Hector mentioned, a priority population that faces significant barriers to education and training, folks that over-index towards those with limited educational attainment, limited professional experiences, and those individuals that come from communities that are often locked out of the IT industry. Second, we wanted to focus on scaling really high-quality and high-performing nonprofits, that know this community and have the ability to pair high-quality curricula through the career certificates with really thoughtful and holistic wraparound supports, whether that be career coaching, living stipends, emergency aid, or childcare.

Third, we wanted to make sure that we were coming up with a financing mechanism that was truly centered around the learner. What that means in practice is we wanted to de-risk that engagement for learners and come up with something whereby learners are only asked to pay if in fact they succeed. When they do succeed, those payments are affordable, cost-effective, and unlock the opportunity to serve more individuals in the future. And then finally, we wanted to be learning-focused. We wanted to make sure that we were setting up a fund whereby we could track, in real time, how learners were ultimately navigating through the programs, how they were experiencing the labor market, and what their job outcomes actually looked like over time, and use that information to both adapt the portfolio and allocate resources to those programs that are truly working, but also help the field and understand and answer questions related to what wraparound supports are, in fact, correlated with and drive student success. What are the preeminent barriers that learners face, as they complete these programs, in obtaining and maintaining employment? How can these financing models, that use both grant capital and investment capital, be used to ultimately unlock other education and training programs across the country?

Williams: Great—thanks for giving us some insight, Jake, on the beginnings of this innovative program. I think it's good for listeners to hear how some of these things get started. Troy, over to you—what feels really innovative and exciting about this program? What helped Google really get on board with this effort?

Troy Blackwood: Thanks for the question, Tiffani. You know, what has been really exciting at Google is this opportunity to reimagine the traditional financing models that have supported the workforce development field, historically—and when you think about it, it's been largely funded by philanthropy only. So as we develop this, I think there are a number of innovative elements within the fund, one being the way that we took grant funding—which, by the way, represents Google.org's single largest philanthropic commitment to date—and we combine that with an investment from Google's balance sheet. Now, this combination of grant and balance sheet capital allows for a few things. One, it builds capacity for nonprofit training providers, and it also scales this initiative far beyond what could be achieved with philanthropy alone. Also, blending these different funding sources allows for the fund to offer an incredibly student-friendly product in the form of an outcome-based loan with 0 percent interest, that also provides downside protection to learners that for any reason do not achieve what we believe could be possible through our program. Another innovative aspect is the repayment mechanism and our desire to establish a self-sustaining program. Essentially, the fund will use repayments from successful students in a "pay it forward” fashion and fund even more learners in a long-term, sustainable way. And then lastly, we're partnering with MDRCOff-site link. They are a nonprofit research organization and will independently evaluate this model and assess the impact that this program has on non-traditional learners over time.

Williams: Great. Troy, you spoke a little bit about the capital for the fund, and I know that the project was kind of uniquely driven by two streams of kind of braided capital—the philanthropic capital from Google.org, and then the returns-seeking capital from Google treasury. Hector, can you tell us a little bit more about why, specifically, Google.org wanted to use grant capital for the project?

Mujica: Yes, I'm happy to. I think we can all acknowledge that the COVID-19 pandemic has accelerated structural shifts in the economy, many of which are likely here to stay—shifts such as the move to a more digital economy, including the automation of labor operations, growth of remote work, increased need for distance learning. While these changes might be productive in the long term, we also have to acknowledge the disruptions they create for underserved communities—for black, Latino, indigenous, rural, and many others. This creates a critical juncture when it comes to building a digital economy that is within reach for diverse communities, and this is a topic that is deeply personal to me as a Latino in tech. It's really important to Google, as a company that strives to create greater equity and access to opportunity, particularly for underserved communities. And like I mentioned earlier, at Google.org we've been investing in ensuring that upper mobility of underserved communities for years. We know companies like Google have an important role to play in connecting more Americans to in-demand digital skills, but we also know that we can't do this alone. This is going to take broad-based efforts—not just by philanthropy, like Troy was mentioning, which has been historically the trend in this workforce space, but also from private and public sectors working together to unlock new, innovative approaches to workforce development. This is what excited us at Google.org so much about this opportunity. First, it is an opportunity to invest in a financial vehicle—an outcomes-based loan—that needs to be piloted at scale to evaluate for efficacy and impact. And we, with our philanthropic capital, can de-risk the ability to test this type of innovation at scale. In doing so, we also get to unlock new sources of capital to support models of workforce development that are both scalable and sustainable. It also provides us with an opportunity to measure the real-time impact of the Google Career Certificates and learn on the fly where additional areas for innovation and improvement might exist for us to maximize value. So while we pursued this for the tremendous upside, there is in being able to create a billion dollars in wage gain, and through the investment to serve tens of thousands of learners in the largest investment of its kind for this type of financing, I truly believe that the learnings for the ecosystem will be invaluable. That's truly aligned with how Google.org aims to push philanthropy to innovate.

Williams: Thanks so much, Hector. It's definitely very exciting. Troy, for other organizations that might be listening to this podcast, what really convinced Google to invest in this space as opposed to putting that money elsewhere?

Blackwood: Yes, thanks for the question. And that was really well said by Hector. I would just add that, from our perspective, in addition to the incredible impact that Google has demonstrated through career certificates, and Google.org's longstanding commitment to workforce development, there has always been a long desire on the finance side to utilize our balance sheet for good. So, from my team's perspective, this represents just another opportunity to deploy Google's balance sheet in support of socially responsible initiatives. It's actually very similar to other funds that we've established like this, similar to the Grow with Google Small Business Fund, which we used to provide financial support to entrepreneurs during the pandemic.

Williams: Jake, would you tell us a little bit more about the mechanics, the outcomes-based loan that's provided to students who take part in the training, and why the team really wanted to leverage an outcomes-based loan instead of other alternatives?

Edwards: Absolutely. I'll tackle the last question first, and I think it's really important to take a step back and define what those alternatives are. Traditionally, when learners finance education and training, they take out a loan, they bear all of the risk as to whether they will actually succeed in the program, and whether the outcome that they ultimately do achieve provides them with enough income and earnings to repay that loan. Those traditional mechanisms have very little accountability embedded in them, as it relates to the training providers. And there's little to no incentive alignment as it relates to the entity who's providing the financing and the entity who's delivering the training, towards the central objective of helping learners get a successful job and achieve economic opportunity. So we chose the outcome-based loan because we thought it addressed the central and core challenges with the traditional approach. And what I mean by that is, we're able to de-risk the financing for learners. We're able to align incentives between Google and training providers towards student success, and we're able to do so in a way that is student-friendly. And so, putting this into the frame of a learner, what does it look like? Students engage with training providers in the portfolio, whether that be Merit America. They enroll at no upfront cost. They get access to the career certificate curriculum based on the particular track that they select. They get access to critical wraparound supports, that help them persist, complete and make a transition to employment. And if in fact they do obtain employment above an income threshold—around $40,000—then they make monthly payments of about $100, for five years. If at any point in that five-year period they become unemployed or their income dips below that income threshold, their payment obligation pauses. In doing so, we're able to accomplish a number of things: we're able to make the payments affordable. We're able to make them dynamic to a learners' employment and provide them with the downside protection if in fact they experience periods of under- or unemployment. Ultimately, we're able to set up a virtuous, sustainable mechanism whereby the payments from learners are recycled by the fund, and able to support subsequent learners to enroll in training providers. So really, the primary objective is being able to provide students with a best-in-class financing mechanism, create a virtuous cycle of supporting the next wave of learners, and doing so in a way that centers all of the project partners towards student success.

Williams: I appreciate that overview, Jake. It certainly is innovative, and interesting. Hector, I know you spoke to this a bit at the beginning, but I'm wondering if you can tell us more about the goals of the program, and really what population you're trying to reach with this resource?

Mujica: Absolutely. Our goal at Google is to ensure that the opportunities created by technology are truly available to everyone. In the workforce development space, we tend to look at STARs—again, those individuals who are Skilled Through Alternate Routes—as our target audience for this intervention, given that a majority of all US workers are STARs, including 55 percent of Latino workers, 61 percent of Black workers, also 61 percent of veteran workers and 66 percent of rural workers of all races. We know that everyone can qualify for in-demand jobs, even if they don't have a degree, but when you put in the forefront a degree requirement, a bachelor's degree requirement, on a job, you exclude—disproportionately—a majority of African-Americans, Latinos, and rural and veteran workers of all races. So our goal is to shift that reality and create a more equitable set of pathways to upward mobility. How do we prepare these learners? How do we ensure there's going to be learner success? We are prioritizing that by supporting programs that place learners at the center of the learning experience. Like I mentioned earlier, we ensure that our funding is flexible to ensure that learners receive wraparound supports with career and professional development services that may include resume review, and coaching, and interview prep, and job placement support, as well as funding to address real-life challenges that may arise during the training, such as living stipends, transportation credits, childcare supports. That and the outcomes-based loans, like Jake was just mentioning, also offer downside protection to the student since they only begin to repay if they have an earning above a specific income threshold. This ensures that the students are getting placed into quality jobs, and it also aligns incentives—again, similar to what Jake just said—so that the training and the certificates have, and are actively delivering on, their intended goal.

Williams: Great. I really appreciate that the program aims so specifically to support students from marginalized or disadvantaged communities, and the wraparound supports are really necessary to make sure that those students are successful. A question for you, Jake, about selecting training providers who could really help to build on the program and really create a vision for success. So please tell us a little bit about some of the key metrics that mattered most to you, as you were looking at training providers for the program, and how you were thinking about that?

Edwards: Yes, absolutely. We can't downplay the role that training providers have in this engagement. They will be the mechanism, and the conduit, through which success happens. They're providing the most important part of this value chain and this equation, as we think about the delivery of educational content and the thoughtful delivery of it. Taking a step back, I think we need to give tremendous credit to Google.org for incubating and supporting a portfolio of nonprofits since the career certificates were developed. That gave us a really strong foundation to understand, who are the organizations with a track record of delivering these certificates, and who does it really well, and what are their respective theories of change and communities of practice? From that, we were able to look at that inventory and find those that we thought were in fact a good fit for this fund, based on what I said: their outcomes. How strongly do they actually perform across helping learners graduate, and obtain employment? And then similarly, how mission-aligned were they, as it relates to the guiding principles that we set at the onset? Are they well positioned to scale and expand their supports across the country, to go deeper in their existing communities, and reach new communities?

And lastly—and critically important—is that we were looking for training providers that were willing to have skin in the game, and were willing to actually sit alongside of the fund, financially and philosophically, as it relates to being aligned towards student success. What does that mean in practice? It means that we have a performance-based financing relationship with our training providers. We give them a portion of the costs up front for every learner they enroll, and we give them the remaining amounts for each learner that they successfully place. In doing so, we can center their work and center their financial incentives around the success of learners. And thankfully, we've been able to identify and partner with training providers that appreciate the importance of this accountability—and also have a track record and strong performance data to be able to do so with confidence, and in a way that provides us with the ability to understand (and set baselines, and benchmarks) for what we want success to look like over time.

Williams: That makes sense. Was there anything unexpected you learned in this process of finding training providers?

Edwards: Every day. I think we have tremendous humility for how hard it is to actually do this work. And so, I think it's easy to assume that education and training providers, they all do similar things and they all have similar focus, so one must look like the other. But in reality, there are stark contrasts around who they serve, how they serve them, what barriers they're facing. I think the really exciting part about this portfolio is, we'll be able to support a number of different organizations that play in slightly different parts of the ecosystem. We have some organizations that include on-the-job training, and internships. We have some organizations that provide living stipends. We have some organizations that provide slightly different flavors of immersive or asynchronous learning. Those are all really valuable data points, but they also speak to the need to have different approaches to support different contexts. We have some programs that might overindex towards opportunity to youth, or individuals who have matriculated from our traditional postsecondary education system without a degree while we have others that are focused on frontline workers, or folks who are perhaps stuck in the chronic cycle of underemployment and are adult learners. I think that just speaks to the fact that no single training provider is truly going to be able to meet the vast needs that our society faces, and we really will have to do this as a collaborative engagement—and we're incredibly grateful for the fact that we have been able to find training providers that all touch on and contribute towards addressing this collective problem.

Williams: As another question for you, Jake—what would you tell students, or folks who advise students or know students, who might be interested in this kind of a program, but who have really struggled in the past with maybe paying off education loans?

Edwards: Thank you, Tiffani—this is a critically important question. I mentioned earlier the traditional approach to financing education and training through loans, and I think we're probably all too familiar with the headline statistics on that front: $1.6 trillion in outstanding student debt, and that makes it now the second-highest form of debt behind mortgages in this country. So that's had a really lasting and problematic impact on our society. And so, the first thing I would tell learners who have perhaps struggled in the past with student loans, would be to ask themselves, "Why?” Was the education too expensive? Did they pursue or engage with the training provider for which the content or the service delivery was inadequate? Did they pursue education in a field that perhaps wasn't aligned with their professional interests? Those are all really important questions that individuals should interrogate as they make a decision as to whether they're in a place, or whether it's appropriate, to take on further debt. I think, taking a step back, we worked really hard to come up with what we think is first of its kind, optimally student-friendly—but it is a student financing mechanism, and that's not appropriate for everyone. So I don't say that lightly, and I encourage learners, as my second thing, to do their homework, and what that means in practice is they should ultimately look at the different career certificates: what are the traditional occupations? Do those align? They should explore the actual training providers, and get a sense for what their approach, what their theory of change, is—and if possible, they should engage with and learn from folks who have actually participated in those programs, and their experiences. And so, all of this is to say that I think we feel, on this line, really confident about what we've built and what we've set up. But at the end of the day, every learner should be really thoughtful and really intentional to assess and make sure that what we've built is appropriate for them. And if so, by all means, we would love to avail this financing to any learners that are interested in working with the training providers.

Williams: Thanks, Jake. I appreciate that honesty and that transparency about really doing individual due diligence about whether or not this is the right thing for that particular individual. And if it is, it clearly has huge potential for impact on that individual's life and their opportunity. And speaking of impact, Hector, I am curious how you feel the technology industry, and just the broader American workforce, can really be impacted by this training and other similar efforts.

Mujica: Yes, Tiffani—thanks for the question. I'm optimistic this fund will serve as a catalyst—a catalyst that can help validate the role of innovative financing solutions, one that can help augment blended financing resources to support a more scalable and sustainable approach to workforce development. This is about much more than the tens of thousands of learners we'll reach, and the $1 billion in wage gains that we expect to unlock. This is about pushing the ecosystem to innovate, to adapt, and to unlock new ways of approaching big problems. And through it, I'm hopeful and optimistic that we'll eventually unlock more philanthropy, more corporate balance sheet dollars, and inspire more innovative financing solutions for similar models—and in doing so, ensure that we are preparing underserved communities to fully capitalize on the opportunities and the promise offered by the digital economy.

Williams: Absolutely. And with the proliferation of digital skills, it's going to be really important to have opportunities like this for all to pursue additional training. The Fed is actually working on a digital skills paper as we speak, on the importance of those skills to economic mobility and resilience—so, I'm excited to see that coming to the forefront here. So, as we come to the end of our time in a little bit here, I have a couple of reflection questions. So first to you, Troy: How will Google encourage other organizations and corporations to replicate this work and invest in similar programs? What would you tell other companies interested in doing what Google is doing?

Blackwood: Look, the most powerful way to encourage other corporates to follow suit is to do it, prove that an innovative fund like this really works, and then inspire folks by highlighting learnings and outcomes along the way. And we've already taken many of the first steps, including establishing this fund, contributing one of our largest grant and balance sheet commitments, and partnering with best-in-class nonprofits and research partners. Now, the focus will be on scaling the impact of our nonprofit partners, and validating that this type of support leads to extraordinary outcomes for learners. Hector kind of hit on this, but ultimately our goal is to inspire others to replicate similar models, so that even more learners can be served over the long term. Williams: Hector, what does success look like ten years from now, maybe once the program has served tens of thousands of students across the nation?

Mujica: I think we've spent a lot of time so far talking about the realities of the opportunity gap that exist—which is why I think funds like this one, that prioritize serving populations like STARs, that prioritize engaging with organizations that are serving and led by people of color or historically underserved communities, can have a differential impact when it comes to supporting those very same underserved communities. So if I'm projecting ten years from now, I'm hopeful that we'll have a better sense of what works, as it relates to knowing what technical trainings and what wraparound supports are most correlated with long-term economic success for these underserved populations that we're addressing. We'll also have proof of concept for other corporations, other employers, other philanthropies, to equally deploy resources and to create an outsized impact within communities.

Williams: And Jake, what about you? What do you think success looks like ten years from now?

Edwards: I try not to think ten years out too often—but with that said, I think a few different layers come to mind. On a purely human level, I think we will have hopefully contributed and shone a light on the importance and the value that nontraditional talent has, and showing that there are many other pathways to the American dream beyond just that of traditional colleges. I think at a policy level, we hope that this contributes to really important dialogues and conversations at the state and federal level around: How should we design an equitable, inclusive financing strategy for education and training? And then third, we hope that this shines a light on the importance of funding high-quality, nonprofit training programs—these organizations that are traditionally reliant on philanthropy, which undoubtedly provides a barrier to scale—and by doing the Google Career Certificates Fund, we're providing a new approach, a new structure for which we can aggregate resources and allow those organizations to scale to meet the needs within their community. So, those are just three that come to mind for me, but hopefully much more to come.

Williams: Absolutely. Thank you so much, Hector, Troy, and Jake, for joining us today to talk about the Google Career Certificates Fund. To our listeners, thank you for tuning in to this episode of Workforce Realigned, a podcast series within the Economy Matters podcast produced by the Federal Reserve Bank of Atlanta. If you'd like to learn more about this program, please visit socialfinance.org/project/google. Please tune in to our next episode, in which we will explore a different perspective on this program with inaugural training provider, Merit America. We'll learn how they conceived of their role in this program, and how they will work to ensure that thousands of students receive the upscaling that they need to progress in today's economy. Workforce Realigned is a production of the Federal Reserve Banks of Atlanta and Philadelphia, in partnership with Social Finance.