The FORTE Model was developed by Dr Ware at Oxford University to solve the myriad of problems with Social Impact Bonds (SIBs), Income Share Agreements (ISAs) and other social finance approaches to human capital investments. The FORTE Model, which stands for Financing Of Return To Employment, has been endorsed by the World Economic Forum and Forbes, and has been successfully rolled out in Australia and Colombia. In short, Forte is a way to perfectly align social impact and financial return at the systems level. It’s a way to finance high-quality education and healthcare at no cost to individuals or governments, and without needing philanthropy.
The way the FORTE Model works is private investors, via Forte, cover the cost of retraining of individuals who are currently paying no/negligible income tax. This training, by its nature, increases expected employment, incomes, and government income tax revenue. Governments, as part of the contractual arrangement, pass back to investors, via Forte, a percentage of the increase in income tax revenue that’s attributable to the training recipients, for a few years (e.g. 50% for 3 years). A true win-win. Individuals get high-quality training at no cost/risk. They just pay the usual tax rate. Governments can help disadvantaged groups, overcome skills gaps, and reduce unemployment without worsening the budget. The Forte model pays for itself in a guarenteed way. It means Governments never pay for something that doesn’t work. Investors can do good and do well. There’s perfect alignment of social/financial returns. And great education/healthcare providers can scale up (with funding from investors) to help more people. They no longer have to rely on disadvantaged individuals paying, or unreliable grants/donations. This is trickle-up economics, not trickle-down.
