Greetings, ImpactAlpha readers!
#Featured: Brief Quiz №18
From 2017 to 2030 — and on to 2063. Are you keeping up with the week’s impact investing news? Has impact investing in emerging markets veered off track? What’s Japan’s SoftBank up to? Name the 2030 goal that was the focus of the United Nations this week? Beyond 2030, what about Agenda 2063? And what the heck is National Geographic doing with 5% of its endowment?
Feeling confident? Take this week’s Brief Quiz №18, from Jérôme Tagger:
We’re looking for leaders driving impact investing around the world. The Global Steering Group for Impact Investment will honor investors, managers, entrepreneurs and market-builders. Deadline: June 16. Submit an entry
#Dealflow: Follow the Money
Big Society Capital takes majority stake of Charity Bank. The U.K.-based financial institution invested £2.5 million ($3.2 million) on top of the £12 million it earlier put into Charity Bank, a lender dedicated to charities and social enterprises. That brings Big Society’s ownership share up to 60.5 percent. Charity Bank offers loans of £50,000 to £2.5 million. It has lent £140 million since 2002 and has approved £28 million in loans so far this year. Charity Bank is owned by trusts, foundations and social organizations, alongside Big Society Capital. Big Society Capital won’t be acting like a majority shareholder: it voluntarily capped its voting rights at less than 50%.
Sharing economy comes to agricultural drones in China. A Chinese startup, Nongtian Guanjia, raised $7 million to help farmers connect with agricultural drone operators for more precise applications of pesticides and chemicals. As much as one-fifth of China’s arable land is chemically contaminated, with excessive fertilizer and pesticide use one of the biggest factors. Nongtian Guanjia has registered 1,000 drone operators and has served farmers managing 666 million square meters of farmland in 10 provinces. The year-old company raised the funds from early-stage venture fund Gobi Partners, U.S.-based GGV Capital, Shunwei Capital, the Zhen Fund and Yunqi Partners. “Nongtian Guanjia provides services that can help solve the labor shortage issue, increase efficiency and improve food quality,” says Gobi’s Tao Jiang.
Connect Fund launches to build impact investing infrastructure. The £1.8 million ($2.3 million) fund, a partnership between Barrow Cadbury Trust and the Access foundation, will invest in collaborative initiatives to improve due diligence, offer blended finance, and lower transaction costs. It will also invest in infrastructure organizations working to understand non-profits’ and entrepreneurs’ capital requirements. “I have deep concerns that much of the social sector is poorly served by the current social investment offer,” says Barrow Cadbury Trust’s Helen Cadbury. That echoes others such as Echoing Green’s Min Pease. Echoing Green (see below) is building on its model to connect entrepreneurs with investment support and like-minded investors.
See all of ImpactAlpha’s recent #dealflow.
#Signals: Ahead of the Curve
How foundations can fill the capital gap in higher education. A flurry of edtech deals notwithstanding, education solutions attracted only 3% of global impact investing assets under management last year, according to the GIIN’s latest survey. One category where capital is not flowing fast enough: higher education. Changing demographics, high tuitions and student debt, technology shifts and new skill requirements are challenging traditional colleges and universities. The solutions, many untested or targeting low-income populations, are often too risky and or not immediately profitable enough for edtech venture capital firms and other private investors. That leaves foundations, through flexible program- and mission-related investments, to fill this gap, says a new report from Avivar Capital, commissioned by the Kresge and Lumina foundations. The two foundations want to increase the share of Americans who hold degrees from 45% today to 60% by 2025. The deals could be high-risk equity for early-stage edtech ventures, low-return loans to qualifying nonprofits or innovative loans to students via community development financial institutions. You heard it here first: ImpactAlpha reported two such deals this week (here and here).
Echoing Green provides three dozen reasons for optimism. Want to end the week on a high note? Take a look at Echoing Green’s 2017 class of fellows. Swapna Reddy is fighting unjust deportations in the U.S. with rapid, remote legal aid. Reyna Montoya is using art and advocacy to lift up undocumented youth. DeMar Pitman is building a web-based platform to rate and compare schools districts to expand fair access to education for students of color. In India, Kushagra Srivastava is converting the pollution from combustion of fossil fuels into inks and paints. Ruth Nabembezi is dispelling sexuality taboos and myths in Kenya, Rwanda, Tanzania and Uganda with accurate sexual health information delivered to youth through mobile phones. View all 36 Echoing Green Fellows.
Time travel is subversive. At its core, impact investing is about the ability to imagine a different future, and then helping to build it. That’s why ImpactAlpha has made a touchstone of the year 2030. What will the world — and the financial markets — be like when global goals such as zero hunger, universal education and inclusive sustainable growth are actually achieved, and the low-carbon energy transition is well underway? If we could just go to that future, we could return to the present and reverse-engineer our way there.
So we were intrigued by James Gleick’s new book, Time Travel, a history of such future (and past) imagination. Gleick talked about the book at this week’s Long Now lecture in San Francisco, hosted by the Long Now Foundation, which puts a zero in front of the year, as in 02017, as a prod to long-term thinking (and to highlight the Y10K problem). Gleick, the author of Chaos (1987), Isaac Newton (2003) and The Information (2011) starts with H.G. Wells, natch, but also brings in Proust, Borges and Mark Twain (who has one of Gleick’s all-time favorite time travel lines, in A Connecticut Yankee in King Arthur’s Court: “‘Bridgeport?’ said I. ‘Camelot,’ said he.”)
Gleick notes the Chinese government’s State Administration for Radio, Film & Television several years ago banned time travel for “treating serious history in a frivolous way,” with shows that “casually make up myths, have monstrous and weird plots, use absurd tactics, and even promote feudalism, superstition, fatalism and reincarnation.”
“They’re right,” Gleick says. “Time travel is subversive.” The genre first blossomed before the turn of the last century, around the time Einstein (after Wells) described past, present and future as a “stubbornly persistent illusion.” Now that we’re living in the actual future imagined in “Back to the Future,” we seem to again be grasping for clues as to what’s ahead, not only with artificial intelligence, DNA editing and extraterrestrial life, but with the whole human project for the 22nd century and beyond. “We’re coping with a nostalgia for a vanishing future,” Gleick says. ”We need to recover the future before it slips away.”
Onward! Please send any news and comments to [email protected].