You don’t have to compromise returns to change how money works and who it works for. And 25 fund managers are proving how.
The latest “Transformative 25” cohort from Collective Action for Just Finance features emerging managers for which “the mission and the mechanism are inseparable, and where financial returns and genuine systems change are not in tension, but in service of one another.”
Take Turtle Island Community Capital. The Indigenous-led, place-based fund manager deploys patient debt, recoverable grants, credit-building finance, and technical assistance to Native entrepreneurs and communities underserved by mainstream financial institutions. The firm designs its capital to serve investees and their ecological, cultural and economic relationships.
“The question for us is not only whether a project produces financial return. It is whether the project strengthens community control, creates durable local benefit, and helps reshape how capital flows in Indigenous communities,” TICC’s Alexander Sterling tells ImpactAlpha.
Such work “requires a different way of thinking and working,” says Collective Action’s Jennifer Astone. “There’s a humility that has to come into the investing process.”
The T25, now in its sixth year, is one of the few fund lists curated around community-rooted, integrated capital funds that are reshaping finance for local communities, racial, gender and LGBTQI+ equity, and climate change.
Collective Action for Just Finance’s cumulative 131 funds and vehicles have mobilized $1.9 billion from nearly 10,000 investors and donors.
“The diversity of solutions represented here is not a bug,” the Collective Action team writes, “it is the point.”
Small but mighty
More than half of the funds on this year’s list are emerging managers that are still in the pilot stage or actively raising their first funds.
“Year after year, some of the most powerful work we see is place-based, community-rooted, and intentionally small,” the Collective Action team notes. “The assumption that impact scales linearly with size is one our field is slowly, and rightly, unlearning. Small can be mighty.”
Atta Impact Capital’s Mesoamerican Catalytic Fund is an impact-first fund that uses flexible financing tools like redeemable equity to support small and mid-sized businesses in Central America and southern Mexico.
Great Plains Housing Impact Initiative’s Native Impact Fund is helping Native-led lenders recapitalize their housing portfolios and expand homeownership with “culturally
grounded, impact-first capital”.
The Resilient Southern Land Fund, a partnership between the Croatan Institute and the Rural Beacon Initiative, invests in undervalued farmland and forests across the US South to strengthen rural economies, expand equitable land ownership, and accelerate climate resilience.
Investors often disregard such funds as “too risky,” observes Astone.
“What most of these fund managers say they’re doing is derisking their funds with their relationships, with all of the work they do and the way they work,” she says. “There is a tremendous amount of discretion being brought to these portfolios.”
Normalizing blended finance
Blended finance is no longer a niche for high-impact fund managers; it’s the norm.
“What was once considered innovative in creative community-led capital is now the baseline,” writes the Collective Action team. “Braiding capital across the full spectrum – financial, relational, political, technical alike – is no longer the exception.”
Turtle Island Community Capital secured a $400,000 zero-interest anchor loan from Common Future, as well as $500,000 from the Ishkode Fund to cover its operating expenses for two years, ImpactAlpha has learned. TICC also secured backing from Boston Impact Initiative’s First Mover Fund, a $5 million catalytic capital facility for participants of BII’s Advancing Regenerative Capital fellowship program.
BII’s First Mover Fund is also part of this year’s T25 cohort. The fund leverages grant capital to help first-time impact fund managers prove their models and attract additional investors.
Other innovative blended-finance funds: FS6’s Guarantees for Regenerative Agriculture uses pooled loan guarantees to share risk with lenders and unlock capital for regenerative farmers needing flexible financing. ReFund’s Recoverable Grants Fund offers zero-interest, recoverable grants to nonprofits and tribal organizations waiting for approved government funding to come in.
