New Penn Medicine and Wharton fund will invest $5M in firms that improve health of low-income Philadelphians
The Fund for Health’s investment committee picked three companies because of their potential to have a significant impact on people’s health and other factors.
Penn Medicine and the Wharton School’s Social Impact Initiative on Tuesday announced their Fund for Health, which plans to invest $5 million over the next three years into companies that are trying to help solve social problems afflicting economically disadvantaged people.
The goal is not to score big financial returns for the fund, but “to push for measurable progress in socioeconomic factors that can have lifelong effects,” the university said. Research has shown that unemployment, crime, inadequate education and other social factors contribute to poor health over the long term.
The first three companies receiving investments of $250,000 each are:
Kinvolved, a New York company that is developing communications software to reduce absenteeism in underserved school districts.
Uptrust, a San Francisco company that aims to keep people out of the criminal justice system by avoiding unnecessary technical violations, such as missing court dates or probation appointments.
RecoveryLink, a Philadelphia company that provides online recovery support services to people experiencing substance use and mental health disorders.
The Fund for Health’s investment committee picked those three companies because of their potential to have a significant impact on social and economic factors — often called social determinants of health — in Philadelphia, said Rajith Sebastian of the Wharton Social Impact Initiative and chair of the Fund for Health’s investment committee.
They had to show potential impact beyond what government would have achieved anyway.
In its release, Penn cited its 2019 Community Health Needs Assessment, which showed that about a quarter of Philadelphians lived in poverty, a fifth didn’t always have enough to eat, and nearly 15% lack health insurance.
The socioeconomic impact of the Fund for Health companies will be measured “on a case by case basis because the companies we’re investing in all have different missions and goals,” said Brandon Grant, a strategic support manager in the office of Penn Medicine’s chief executive, Kevin Mahoney.
The fund is interested in long-term outcomes, which are often hard to assess long term, executives said.
In the case of Kinvolved, for example, it’s easy to see whether children are going to school more often, Sebastian said. “It’s more difficult to measure, what are their social outcomes? Are they more engaged? Are they more economically active, etc.”
Kinvolved is not active in Philadelphia, but the Fund for Health team sees great potential for the company to make a difference in the city. Uptrust and RecoveryLink are active here.
Robert Ashford, CEO of RecoveryLink, said the key for his company is expanding access to people who are uninsured or underinsured. Since its founding in 2019, RecoveryLink has provided services to just under 900,000 people, Ashford said. The company is on track to have $2.2 million in revenue this year.
The plan for the Fund for Health calls for investments of $100,000 to $250,000 in as many as 10 companies. Penn will retain a minority stake in them.
The money for the fund came from the University of Pennsylvania Health System, which had $8.7 billion in revenue and $611 million in operating income in the year ended June 30.
The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at brokeinphilly.org.