![]() In 1999, MacArthur made a $1 million investment to help this unproven, mission-driven fund manager seeking to find companies that could generate quality jobs and a greener economy as well as outstanding financial returns. The trajectory of a pioneering “triple-bottom-line” impact capital manager, now known as SJF Ventures, illustrates the lasting and outsize impact of catalytic capital invested in a for-profit, growth equity fund. It showed us that $300+ million in catalytic capital, provided to the earliest CDFI pioneers and to other promising groups over time, had ultimately helped build a durable infrastructure for impact at a scale we never imagined originally-with strong potential to continue multiplying the results of our original catalytic capital investments in the decades ahead. Ultimately, these recent events and other developments helped to draw billions of dollars in new public and private capital to CDFIs over the past few years, including major donations from philanthropist MacKenzie Scott and both grants and investment from Google and other firms.Īs an early and longtime CDFI investor, we found this surge of engagement and new resources incredibly exciting. Next, when the murder of George Floyd, nationwide protests, and a widespread racial reckoning motivated corporations, foundations, and individuals to finance Black and Brown communities and entrepreneurs, CDFIs met the moment again, with established capacity and ready opportunities. ![]() ![]() Through fast action and collaboration, backed by foundations and mission-driven family offices, they provided critical financial support to hard-hit small businesses-during the pandemic’s early days and as mainstream lenders implementing the federal government’s massive Paycheck Protection Program left out thousands of eligible nonprofits and small businesses, many led or owned by women and people of color. When the COVID-19 pandemic reached the U.S., roughly 1,300 certified CDFIs were at work nationwide, managing more than $222 billion in assets. Treasury program which accelerated the industry’s spread and development nationwide. By 1998, CDFI leaders made the case for a new U.S. The early impact investments made by the Ford and MacArthur foundations throughout the 1980s and 1990s helped seed and scale dozens of promising new loan funds, banks, and credit unions. In the early 1970s, pioneering, community-focused development banks and loan funds arose in Chicago and elsewhere, often in direct response to the devastating policy and practice of redlining, which denied Black and under resourced communities access to mortgages, insurance, and other essential forms of capital for decades. field of Community Development Financial Institutions ( CDFIs) demonstrates the important role of catalytic capital and its lasting, outsize impact. ![]() Our experience as an early investor in the U.S. This can happen by shifting risk and return through a guarantee or blended finance structure, or by making an early bet that helps an unproven but promising enterprise build its scale and track record to attract more investors over time. Pioneered by the Ford Foundation and followed by the Packard and MacArthur foundations in the early 1980s, catalytic capital is patient, risk-tolerant, and flexible investment that seeds, scales, and sustains impact-generating organizations, usually with the goal of mobilizing capital from other sources, often in large multiples. And, by leveraging our rich legacy of catalytic capital leadership, foundations help the impact investing field expand and accelerate its progress toward a more just, resilient, and inclusive world. Third, philanthropy can practice impact investing directly.īy example and through partnership, foundations help advance growing engagement in values-aligned and sustainable investing. Second, foundations provide critical support to the networks, experts, and thought leaders who help investors, investment advisors and asset managers connect, learn, and innovate. MacArthur Foundation sees three main ways that philanthropy should continue to engage.įirst, grant funding is needed to support further development of sound, widely accepted standards and policies for impact measurement and verification. Informed by almost 40 years and more than $700 million of impact investing, the John D. Looking ahead, it is worth considering what impact investing’s further growth and mainstreaming could mean for philanthropy and foundations and the dynamic role they have long played. Over the past several years, the global impact investing field has expanded like never before.
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