Greetings, Agents of Impact!
Dealflow: Follow the Money
Canadian impact fund targets “economic reconciliation” for indigenous entrepreneurs. Canada’s indigenous communities face challenges familiar to indigenous populations around the world: higher poverty rates, lower educational attainment and poorer health and housing because of past injustices and persistent structural barriers. Indigenous entrepreneurs as well have more difficulty accessing financing than their non-indigenous peers. Vancouver-based Raven Indigenous Capital Partners is raising a small impact fund to make equity investments in socially-focused indigenous entrepreneurs. “These businesses spin off other businesses and have all kinds of cascading effects,” Raven’s Jeffrey Cyr told The Globe and Mail. The fund, launched in 2017, has raised C$1.75 million ($1.3 million) towards a C$5 million goal from seven investors. Its first investment is in digital agency and certified B Corp Animikii Indigenous Technology, which offers design and communications support for other indigenous organizations. Here’s more.
Blue like an Orange finances information technology acquisition in Brazil. São Paulo-based Grupo Cimcorp, one of Brazil’s largest information technology service providers, lined up $25 million in financing to acquire a local software company. Local news reports suggested the acquisition target was Resource, a large information technology integrator. Blue like an Orange Sustainable Capital, the debt fund founded by former World Bank officials to finance the Sustainable Development Goals, led the $25 million structured financing, along with The Rohatyn Group and Actinver Capital Management. As for social impact, Blue like an Orange cited Cimcorp’s client base of small- and medium-sized businesses, its work with nonprofit and public agencies and its employment in Brazil’s north and northeast, where high-paying jobs for skilled labor are limited. The fund said the investment ticked four of the global goals, including No. 8 (Decent Work and Economic Growth) and No. 9 (Industry, Innovation and Infrastructure). It was the third deal for Blue like an Orange (following financing for Cabify and Produbanco). More.
Finnovation Lab graduates first cohort of Minnesota impact entrepreneurs. Twin Cities-based Finnovation Lab sent off its first class of local social impact entrepreneurs. The program, backed by the St. Paul-based Bush Foundation, is run in partnership with Impact Hub and local beer company Finnegan’s Brew to support underrepresented social entrepreneurs. The five entrepreneurs in the Lab’s first cohort included Mimi Aboubaker, founder of fintech venture TUSA, which helps disadvantaged students with financial aid for school, and Precious Drew, co-founder of sustainable skincare company PERK. “We’re looking for transformative ideas that can really have a positive and large social impact,” Finnovation’s Connie Rutledge told ImpactAlpha. Read on.
Signals: Ahead of the Curve
Investors to Treasury: Collect our Opportunity Zone data. U.S. Commerce Secretary Wilbur Ross is said to believe that impact metrics will “kill” Opportunity Zones. Nearly 70 organizations and Opportunity Zone investors including Arctaris Impact Fund, Blueprint Local, Calvert Impact Capital, KPMG, LISC and the U.S. Impact Investing Alliance disagree. In an open letter, the investors call on the Treasury Department to adopt a reporting framework for investments in designated Opportunity Zones. “Measuring the full impact of this policy requires the adoption of a thoughtful data collection framework,” said John Lettieri of Economic Innovation Group, which led the effort.
- Shooting in the dark. Previous place-based programs, including Enterprise Zones and Renewal Communities, suffered from inadequate data making it hard to assess their effectiveness. “This is why timely and thoughtful measurement and transparency are key to evaluating the impact of the Opportunity Zones incentive,” the investors write.
- Basic data. The group is calling on Treasury to adopt a reporting framework proposed last month in bipartisan bills and to collect and make public the data, including the number of funds and their size, along with impact metrics like job creation, poverty reduction and new business starts. It would also require data on the amount, location and destination of investments into businesses, property or other assets.
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Ups and downs of Cameroon’s cataract bond. The Cameroon Cataract Bond is providing high-quality treatment to thousands of patients, but is not reaching enough of the country’s poorest of the poor. That’s the Year One verdict on the $2 million development impact bond launched last year to provide surgeries to treat cataracts, a leading cause of blindness and visual impairment. The bond finances up to 18,000 eye surgeries in Cameroon over five years (some 48,000 eye surgeries are needed each year). The bond provides upfront funding to Magrabi ICO Cameroon Eye Institute to perform the surgeries. According to the Overseas Private Investment Corp., which financed the bond with the Netri Foundation, the institute screened 50,000 patients and conducted 2,300 surgeries in its first year. Quality of the surgeries exceeded World Health Organization standards.
- One miss: Less than 30% of the patients were from the country’s poorest two groups, short of the 40% target. “The project is working to better understand the barriers people face and develop strategies to increase access for the poorest,” OPIC said in a statement. If the hospital meets five-year performance targets, the Conrad N. Hilton Foundation, the Fred Hollows Foundation and Sightsavers will repay the financiers with interest and provide an incentive to the hospital.
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Agents of Impact: Follow the Talent
Big Society Capital made £90 million ($114 million) in commitments last year, according to its latest report. Since 2012, Big Society has helped finance 1,141 social enterprises and charities across the UK; three-quarters are located in underserved communities… Graham MacMillan, ex- of Ford Foundation, joinsVisa Foundation as president… Online “ethical” bank Aspiration is hiring an impact product manager in Los Angeles… Moral Monday Movement’s Rev. William Barber II and Kat Taylor of Beneficial Bank will be featured guests at Confluence Philanthropy’s Annual Advisors Forum and Climate Solutions Summit June 24-26 in San Francisco (see “A minister’s call for moral, as well as economic, revival”).
— June 13, 2019.