The Brief

The Week in impact investing: Radical pragmatism

ImpactAlpha ¡ March 28, 2025

TGIF, Agents of Impact! 

In today’s Brief:

  • Roundup: Making sense
  • Podcast: Proxy preview
  • The Call: Employee ownership rides the populist wave
  • Agent of Impact: Self Help’s Martin Eakes

🗣Dollars and sense. Lending to help small businesses grow and create jobs is not a radical idea. Many banks seem to think it’s sensible to show flexibility to help more first-time homebuyers build equity and family wealth. And cutting in employees for an ownership stake in the companies they help to build has surprisingly broad support among business owners and investors, as well as workers. As we wrote this week to launch our Re:Construction spring tour (details below), these pages in “the playbook for shared prosperity” represent the kind of common sense agenda that can lower costs, raise incomes and improve lives. 

Indeed, the Treasury Department’s CDFI Fund, targeted for elimination by President Donald Trump, appears to have a good chance of survival partly because many borrowers and businesses in Republican congressional districts rely on community development financial institutions as the only bank in town. Courts have repeatedly upheld the legality of “special purpose credit programs” that give banks and other lenders flexibility to redress past discrimination – and which the Trump administration is now seeking to terminate. And sharing the wealth through employee ownership is such a common sense idea that many business owners are considering it as a growth strategy even when they’re not looking for a buyout, as the Essential Owners Fund’s Malini Ramanarayanan Moraghan said on this week’s Agents of Impact Call (see below).

Common sense, of course, only goes so far in these troubled times. As basic concepts, diversity, equity and inclusion all enjoy overwhelming popular support; as a weaponized acronym, “DEI” is being used to attack institutions, from law firms to universities, with more to come. This week, RPCK’s Chintan Panchal offered an impact lawyer’s practical advice for raising a fund in a post-DEI world. “The need for capital to address climate resilience, financial inclusion, and underserved markets is bigger than ever,” Panchal wrote. Erika Seth Davies, Jade Huynh and Bert Feuss offered terms and tools for asset owners and managers still seeking to deploy capital to advance racial equity. Many remain committed “not in spite of, but because of, the likely resistance and retrenchment that lie ahead,” they wrote. As tech leaders push to roll back rules guiding the responsible development of artificial intelligence, big-pocketed asset owners in both Europe and the US are moving in the opposite direction, report VentureESG’s Johannes Lenhard and Oliver Nixon. 

Other systemic risks as well – think the overuse of antimicrobials in food supply chains, or reductions in the oceans’ ability to absorb carbon – don’t go away just because regulators are being laid off or shut down. “By clearly articulating the investment case for protecting these critical systems, investors can amplify the message that a trajectory set by thoughtless deregulation puts everyone at risk,” wrote Rick Alexander of The Shareholder Commons. In our video interview, Self Help’s Martin Eakes served up his own healthy dose of common sense (see below). Given a fair chance, people and families of ordinary means “can survive and thrive,” Eakes told me, “but not if you put roadblocks up that make it impossible.” – David Bank

Don’t miss these features in this month’s ImpactAlpha Latin America:

Upcoming ImpactAlpha Events

🚌 Spring tour. Join ImpactAlpha’s in-person Re:Construction gatherings at the Ackerman Center for Excellence in Sustainability at UNC Chapel Hill, Friday, April 4 (RSVP); the Aspen Institute in Washington, DC, Tuesday, April 8 (reserve your spot); and the Boston International Film Festival, Saturday, April 12 (buy tickets).

🔌 PluggedIn: Why LPs still see opportunities in equitable climate tech. Climate tech continues to attract significant investment despite shifting policy priorities in Washington, DC. On the next PluggedIn, Symphonic Capital’s Sydney Thomas and Shruti Shah join Sherrell Dorsey to share how the early stage VC firm identifies and supports innovative climate solutions, and why they remain committed to equity and overlooked communities. Tune in Tuesday, April 1, at 10am PT / 1pm ET / 6pm London. RSVP now.

The Week’s Podcasts

🎧 This Week in Impact. Host Brian Walsh takes up ImpactAlpha’s top stories with editor David Bank. Up this week: How “system stewardship” is shaping the debate over shareholder resolutions this proxy season; sharing the wealth, via employee ownership, is attracting surprisingly strong support; and a look at ImpactAlpha’s spring “Re:Construction” tour to assemble a playbook for shared prosperity. 

🏘️ Community Capital Live: Local investing cooperatives. ImpactAlpha is delighted to introduce the latest addition to the ImpactAlpha Podcast Network, Community Capital Live. Every two weeks, host Joel Skene and a rotating cast of panelists interview people across the US that are running innovative local impact investing funds. In the two most recent episodes, Joel dove into the mechanics of cooperative real estate funds operating in Minnesota and Vermont.

The Week’s Agent of Impact

Martin Eakes, Self Help: Helping working families survive and thrive (video). The way Martin Eakes tells it, the first $77 came from a bake sale in New Bern, NC. Churches and other groups soon rushed to make deposits. Eakes and his wife started Self Help to expand civil rights into economic gains for working families. The original credit union now has more than $2 billion in assets; a second unit in California and other states, Self Help Federal Credit Union, has another $2 billion or so. Together, they’ve delivered more than $11 billion in financing to more than 168,000 families. “If anyone had ever told me we would become a finance organization, I would have laughed at them,” Eakes tells ImpactAlpha. “We were a civil rights group. That was our calling.”

Self-Help soon expanded to home mortgages. Home equity represents about two-thirds of all household wealth, for both Black and white families, he found. “So, if you wanted to build wealth, you had to start there because that’s where the wealth resides,” he said. In its first 10 years, Eakes says, Self Help made $100 million in loans to borrowers rejected by other banks, without losing a penny. Given a fair chance, he says, people of ordinary means “can survive and thrive, but not if you put roadblocks up that make it impossible.” Among the biggest of those roadblocks were extractive subprime mortgages that drained low-income borrowers of what little they had. Long before the Great Financial Crisis, Self Help’s Center for Responsible Lending took on issues such as exorbitant fees and penalties for pre-payment. Eakes is always up to fight the good fight. “We became the most hated entity for subprime lenders and for payday lenders in the country,” he says proudly.

Eakes and Self Help again find themselves in the fight. As one of three partners in Climate United, Self Help was geared up to work with other community lenders to deploy nearly $7 billion in Greenhouse Gas Reduction Funds for energy efficiency, solar power and electric vehicle loans for low-income households, small businesses and nonprofits. With the Environmental Protection Agency now trying to claw that money back, Climate United has gone to court to unfreeze the funds and service such loans. And as one of the nation’s largest community development finance institutions, Self Help also has a stake in the fate of the Treasury Department’s CDFI Fund, which the Trump administration has sought to eliminate; with bipartisan support, the fund may escape termination.

“Martin remains one of the nation’s fiercest and most committed advocates for low-wealth families,” says Napoleon Wallace, who worked closely with Eakes at Self Help. As a white guy working with predominantly Black borrowers, Eakes has a special appreciation for strategies for shared prosperity (see, “A playbook of what and who is working to build prosperity for all”). Eakes says his childhood friends in Greensboro, mostly Black, “were destroyed economically as the years went on.” He tells the story of a Black woman in Raleigh who told him there was no room in the community for an organization headed by a white man. He says he listened and then responded, “If what you’re telling me is that I can’t help single African American mothers that I’ve spent my life working with, I just need to tell you up front, I’m going to run right over you.” Her response: “I think I can work with you.”

The Week’s Call

Employee ownership rides a wave of economic populism – and pragmatism (video). Momentum for strategies that enable workers to share in the value they help create continues to build, despite a divisive political climate. “Ownership isn’t just about assets. It’s about agency, equity and opportunity,” said Lindsay Zizumbo of Sorenson Impact Foundation, which is funding initiatives to advance ownership opportunities (and supports ImpactAlpha’s coverage of the Ownership Economy). “It’s how we close the wealth gap, strengthen communities and ensure more people share in the success they create.” Like support for small businesses and community lenders, worker ownership resonates with political leaders on both sides of the aisle. “It’s radical pragmatism,” said Lafayette Square Institute’s Jack Moriarty. 

Moriarty and Zizumbo joined other employee ownership practitioners on ImpactAlpha’s Agents of Impact Call this week. In Canada, a new employee ownership trust, or EOT, initiative has been cast as a form of “predistribution,” rather than redistribution, said Social Capital Partners’s Jon Shell. Amid a trade war provoked by the US, it’s also seen as a way to keep Canadian companies in the hands of Canadians, instead of selling to American investors (see, “In Canada, employee ownership trusts offer a path to shared prosperity and national sovereignty”). 

  • Ownership funds. Alison Lingane’s Ownership Capital Lab is mobilizing capital for nearly two-dozen funds raising a combined $670 million for employee ownership transitions. “Investors are coming together to learn about employee ownership investing, inviting funds to do closed-door pitch sessions, and even sharing due diligence with each other as a way to learn,” Lingane said. Her nonprofit launched a virtual course for foundations, philanthropic institutions and advisors to learn how to fund ownership strategies. Michael Brownrigg sees an opportunity to bring in market-rate capital providers with Apis & Heritage Capital Partners’ second employee-led buyout fund. “You can earn a really good return, and help the economy get healthy,” he said.
  • Essential workers. “We are really focused on those huge parts of the economy where humans still drive a large part of value for companies,” said Malini Ramanarayanan Moraghan, who joined The Call via recorded video. Think medical transport, food manufacturing, senior care and logistics workers who are critical to “the operating stability of their companies and are living at a level of economic precarity that’s not just moral failing, but also bad for their businesses.” Moraghan’s Essential Workers Fund offers debt and equity to finance minority employee ownership conversions. “I think every single American company should be at least 30% employee owned,” said Moraghan. “When that happens, we will have a kind of social stability, community stability, that is something we’ve all been working for.”
  • Read the full recap and watch the video replay. 

The Week’s Dealflow, Talent and Jobs

💼 See and share more than a dozen new impact jobs posted this week on ImpactAlpha’s Career Hub and view hundreds of more jobs in impact investing and sustainable finance. Have a job listing to post? Submit it here. And check out all of this week’s dealflow reporting. 

Remembering Lisa Hall. The impact investing trailblazer served as a senior policy advisor in the Clinton administration, as CEO of Calvert Impact Capital, where she championed community development and the Women Investing in Women initiative, and most recently with Apollo Global Management, where she launched the private equity giant’s impact strategy. Tributes have poured in since Hall’s death from colon cancer on March 15. Read more.

David Macdonald joined Allivate Impact Capital from Woodforest National Bank as a managing director for the firm’s employee ownership finance strategy… TruFund Financial Services named OC Isaac, formerly of Locus Bank, as its chief lending officer. It also names Deirdra Cox of Community Sustainability Enterprise and Hilda Abbott of RudHil Companies to its board… Steve Rocco of MS Innovation Lab, co-founded Arketa Institute in Geneva, Switzerland… Accion Venture Lab added Akhil Gupta, a former Dell Foundation program manager, as a South Asia-focused investment officer… 

Banyan Infrastructure adds Scott Dicke, formerly with the Montgomery Green Bank, as head of advisory services, and Marilee Shea, previously with Carta, as a sales account executive… Carl Lennartson, previously with the Texas Workforce Commission, joined Social Finance as a data analytics associate… Realize Impact welcomed Topiltzin Gomez, previously head of capital strategies at Honeycomb Credit, as an impact investing research fellow.

That’s a wrap. Have a wonderful weekend. 

– March 28, 2025