Greetings Agents of Impact!
In today’s Brief:
- Impact investments in AI
- Funding an inclusive creative economy
- Democratizing tech job referrals
- Greening home down-payment assistance
Featured: Responsible AI
With stakes in Anthropic, impact investors seek a seat at the AI table. Last month, Ford Foundation committed $5 million, Omidyar Network $1.5 million and the Nathan Cummings Foundation $1 million to purchase just under 250,000 shares of Anthropic, a major rival to OpenAI in the development of artificial intelligence. Omidyar Network’s Mike Kubzansky says he called a contact at Anthropic and asked, “‘Would it be helpful to have somebody who is there for the returns, but also for the impact considerations?’” The combined $7.5 million investment from the three impact investors is dwarfed by the $4 billion Amazon paid for its stake in Anthropic and the $2.5 billion Google invested (Microsoft is a major investor in OpenAI). “I should say we’re clear on how much influence we get,” Kubzansky tells ImpactAlpha. “We’re under no illusions.” But he says Anthropic’s corporate governance protections and its commitment to “constitutional AI” made it attractive to foundations keen to invest in responsible tech innovation. “The hope is to be in conversation with Anthropic and help them to live into their commitments.”
- Mission investments. Kubzansky rounded up the other investors to submit a bid for Anthropic shares being auctioned from the bankruptcy proceeding of FTX, the crypto exchange headed by the now-convicted Sam Bankman-Fried. “We were delighted to hear that the folks at Anthropic were interested investors of our type,” Ford Foundation’s Roy Swan recalls. Neither Ford nor Cummings typically make direct investments in individual companies, preferring to invest through diversified fund managers. “This was an easy exception, because it’s the ultimate learning opportunity for us,” says Nathan Cummings’ Rey Ramsey (disclosure: Omidyar Network and Ford Foundation have sponsored several ImpactAlpha projects; Ford Foundation is an investor in ImpactAlpha).
- Responsible innovation. In a guest post, Cornell Tech’s Lyel Resner and Wilneida Negrón of Responsible Innovation Labs argue for more impact investments in transformative technology companies that can “affect the playing field of impact, even if the companies are not expressly ‘impact’ themselves.” Amazon’s major investment in Anthropic, for example, raises concerns about the effect of AI on workers rights. “From their position as shareholders, can they more effectively educate or inspire Anthropic to consider new paradigms of value when it comes to human rights, the future of work, or access to essential services?” the authors write. “Strategic guidance from experienced entities like Ford could help mitigate negative downstream effects.” Read their full post.
- Worker voice. The three foundations hope to have regular consultations with Anthropic and to be able to raise issues as investors, not merely advocates. “Our main ask is that when AI gets deployed at companies, that workers have a seat at the table,” Kubzansky says. Omidyar Network backs the AFL-CIO Institute, which last year struck a deal with Microsoft to collaborate on the adoption of AI in the workplace. “In some cases, yes, this will undoubtedly make jobs redundant,” he says. “But in some cases, it could actually make less-valuable jobs more valuable and higher-wage. The trick is to have the workers at the table when this is getting decided.”
- Keep reading, “With stakes in Anthropic, impact investors seek a seat at the AI table,” by David Bank on ImpactAlpha.
Dealflow: Creative Economy
Upstart Co-Lab raises $15 million to invest in an inclusive creative economy. The nonprofit impact investor raised a mix of mission and program-related investments and recoverable grants from 14 investors including the Andy Warhol Foundation for the Visual Arts, the Ford, Marguerite Casey and Skoll foundations, the Souls Grown Deep Foundation, the Toledo Museum of Art, and Halloran Trust. The fundraise represents a first close on Upstart Co-Lab’s fund for entrepreneurs and fund managers bringing arts, culture and sustainable livelihoods to women, low-income communities and communities of color. “Creative industries like fashion, food and film employ people, build wealth in communities, and share stories and traditions that foster critical connections,” said Upstart’s Laura Callanan. Investments in the US’s $1 trillion creative economy, she added, “contribute to the kind of economic prosperity that democracy depends upon.”
- Breaking ground. As a sector, arts and culture “is largely ignored by the investment community,” according to a recent report from Deloitte. Upstart Co-Lab has funneled more than $45 million in grants and investments to creative enterprises since 2016. It is looking to raise $100 million for its first fund. Its effort to prove opportunities for financial and impact returns “can help break new ground for impact investing and build a more equitable and vibrant creative landscape in the US,” said Ford Foundation’s Roy Swan.
- Check it out.
Tangent secures early funding to democratize referrals for UK tech workers. Less than 10% of the UK’s tech talent comes from lower-income backgrounds compared to nearly 30% in finance and 23% in law. An obstacle for such workers is the tech sector’s tight referral network. “You are nine times more likely to be hired through an employee referral; however, if you come from a less privileged background like me, chances are you don’t have a professional network to get referred,” Tangent founder Gary Izunwa told TechEU. Tangent helps connect job seekers from low-income backgrounds to mentors at companies like Stripe and Amazon, who can later provide references for the jobseekers.
- Upward mobility. “Social mobility and being mobile mean that you’ve been able to ‘progress’ from your parents’ socioeconomic background and income,” added Izunwa. The company, whose founders are LinkedIn alums, raised €1.1 million ($1.2 million) from Google’s Black Founders Fund, Zinc VC, the SyndicateRoom and a number of tech founders.
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Dealflow overflow. Investment news crossing our desks:
- Netherlands-based B Corp. Mosa Meat inked €40 million ($42.6 million) from Lowercarbon Capital, M Ventures Invest-NL, InvestEU and others to begin tastings for its lab-grown beef products. (EU-Startups)
- Also in the Netherlands, VitalFluid raised €5 million ($5.3 million) to supply produce growers with sustainable pesticide and fertilizer made out of “plasma activated water,” which can prevent crop disease and balance soil pH. (VitalFluid)
- India-based VC firms Caret Capital and Ev2 Ventures secured an anchor investor for their $50 million early-stage fund for startups supporting good jobs and sustainable mobility and distribution of goods. (YourStory)
- Rethink Impact led a $10 million investment round for Clarity Pediatrics, a startup that’s trying to make it easier and more affordable for parents to get diagnoses and support for kids with ADHD and other chronic and mental health conditions. (TechCrunch)
Impact Voices: Deploy!
Greening down payment assistance to create better homes and better mortgages. Scaling the $27 billion in Greenhouse Gas Reduction Funds requires large, established financial markets. Transforming down payment assistance is the key to greening the single-family mortgage market, argues James McIntyre of Inclusive Prosperity Capital, a nonprofit clean energy financing service that has been awarded funds from the GGRF. State and local housing finance agencies, or HFAs, have used down-payment assistance to accelerate homeownership among low and moderate-income families and first-time homebuyers, weaving programs into their bonds and mortgage-backed securities. “Many HFAs already use a wide variety of state and local resources to fund their down-payment assistance programs. Why not GGRF money leveraged with private capital?” suggests McIntyre in a guest post on ImpactAlpha. Making homes more efficient could be a boon to housing affordability and mortgage loan performance: Higher efficiency homes are associated with lower mortgage-default rates.
- Green models. Housing and energy are often siloed, creating a challenge for community lenders receiving GGRF funds. Several state energy offices and green banks have for years provided down payment assistance, or DPA, to low and-moderate income home borrowers, crowding in private capital. One example: Connecticut’s Smart-E program for clean energy home upgrades, now administered by Inclusive Prosperity Capital, has been adopted by private lenders and credit unions looking to offer green home renovation loans. “A green DPA initiative potentially stands at the confluence of financial inclusion, energy efficiency, environmental sustainability and leverage,” says McIntyre. “HFAs, CDFIs and other existing lenders can be great partners in this quest.”
- Keep reading, “Greening down payment assistance to create better homes and better mortgages,” by Inclusive Prosperity Capital’s James McIntyre on ImpactAlpha.
Agents of Impact: Follow the Talent
Don’t miss these upcoming ImpactAlpha partner events:
- May 1-2: Total Impact Summit (Philadelphia) – Use IMPACTALPHA for 50% off
- May 7-8: Feminist Finance Forum (Bangkok) – Register
- May 7-9: Mission Investors Exchange (LA) – RSVP
- May 13-15: Canadian Employee Ownership Conference – RSVP
- June 4-5: Pro Mujer’s GLII Forum Latam (Buenos Aires) – Register
Eclipx Family Office is hiring a shareholder engagement director to lead its climate engagement initiatives… FreeCap Financial is hosting a webinar for the launch of the FreeCap BITA Decarceration Index, Friday, April 26… Impact Investing Ghana is hosting the Ghana Impact Summit in Accra, Wednesday, May 22.
👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.
Thank you for your impact!
– April 23, 2024
