Catalytic Capital | November 30, 2017

Philanthropy’s saving graces, Nobel sustainability fund, talent-tech merger, day two at GES, future…

The team at


Greetings, ImpactAlpha readers!

#Featured: Impact Voices

Three saving graces that can help foundations dodge three deadly perils. Clara Miller, the outgoing president of the F.B. Heron Foundation, lobbed a challenge at her foundation peers from the stage at last month’s SOCAP conference in San Francisco. “We can be comfortable but increasingly irrelevant,” Miller said. “Or we can lead, and make a difference.” In a guest post on ImpactAlpha based on that speech, Miller takes on what she calls the “outmoded business model” of U.S. foundations. Most still keep separate the investments of their endowments and their giving through grants, or approximately 5% of those assets. Miller, who helped Heron point 100% of its assets towards its poverty-fighting mission, called that model “primarily an instrument of tax compliance expediency, not philanthropic effectiveness.”

Such old-model foundations face at least three “deadly perils” that could lead to irrelevance or worse, says Miller. Fortunately, foundations can tap three “saving graces” to avoid obsolescence. Here’s one: foundations can stand vigil for impact, as more and larger private investors make claims to social and environmental benefits. “We can be the umpire on that field,” Miller says, “and push progress with transparency and integrity, among all investor classes and all legal forms of organization.” Accounting is destiny , she says, “and here comes blockchain!”

Read, “Three saving graces that can help foundations dodge three deadly perils” by Clara Miller on ImpactAlpha. (Disclosure: The Heron Foundation supports ImpactAlpha’s editorial efforts.)

Three saving graces that can help foundations dodge three deadly perils

#Dealflow: Follow the Money

Nobel Sustainability Trust backs U.K. sustainable tech fund. The Swedish family behind the Nobel Prize is throwing its name behind a £100 million U.K. venture fund to invest in sustainable tech, manufacturing and service companies. Plans for the Nobel Sustainability Growth Fund were announcedlast year. The fund will be managed by green investment firm Sustainable Technology Investors Ltd and is being seeded with £10 million from Monaco’s sovereign wealth fund and U.K. investment group SET3. It will use the “Earth Dividend” scorecard to assess and measure the impact of its investments by looking at issues like the business’s natural-resource consumption, pollution control, and social and economic contributions. This impact-assessment approach was developed by Earth Capital Partners, whose investment team members supported the setup and launch of the Nobel Sustainability Growth Fund and form part of the Sustainable Technology Investors Ltd, team.

Twin Cities foundations invest in affordable housing. The F.R. Bigelow Foundation and the St. Paul Foundation are committing $1 million each to two organizations — CommonBond Communities and Habitat for Humanity — as program-related investments. CommonBond, which is based in St. Paul, develops and manages affordable apartments throughout Minnesota. It will use the loan to boost its Housing Opportunity Fund, which buys rental properties to lease to Minnesotans earning between $33,000 and $48,000 per year. The Twin Cities chapter of Habitat for Humanity will use its loan to issue mortgages to low-income families, as part of its impact 2020 strategic plan that aims to enable 500 families in the metro area to become homeowners. St. Paul-based community lender Bremer Bank committed to the initiative earlier this year by becoming Habitat’s banking partner. A lot has been happening with Twin Cities affordable housing this year, where demand for low-cost housing exceeds supply and not enough new construction is underway. The NOAH Impact Fund, which raised $32 million to buy and preserve existing affordable housing units in and around Minneapolis, recently made its first acquisition.

Upswing raises $1.5 million to reduce isolation of online students. Students pursuing online degrees are often older or part-time students trying to balance advanced education with other life responsibilities. They are less likely than traditional four-year college students to complete their studies and “are more likely to experience isolation that impedes their success,” says Marissa Lowman, head of education practice at Village Capital. Upswing is an edtech startup, backed by VilCap, that works with universities and community colleges to improve student retention by extending on-campus services, like tutoring and advising, to their online student communities. Upswing serves 700,000 students in 70 colleges and universities, mostly public institutions, and many of which are community colleges. Its $1.5 million seed round wasled by Lumina Impact Ventures, with backing from the Stanford Graduate School of Business and Rethink Education. Upswing also secured $75,000 as a winner of Village Capital’s 2017 edtech cohort.

Shortlist acquires Spire to boost talent development in East Africa. About half of new graduates from Kenyan universities are not prepared for the workforce, according to a 2014 study, while fast-growing Kenyan startups struggle to find adequate talent. Shortlist, a recruitment platform for small and growing firms in India and Africa, has acquired Nairobi-based Spire Education, which builds employee training programs for East African employers. The merger will enable Spire to deliver training and development curriculum directly to Shortlist jobseekers (over 50,000 candidates throughout East Africa). Shortlist, co-founded by Accion Venture Lab founder Paul Breloff, raised $1 million from venture capitalists and Indian and U.S. angel investors in September. “Mergers between startups in this ecosystem are quite rare,” Lauren Cochran of the Blue Haven Initiative, an investor in both companies, told ImpactAlpha. “This acquisition shows how outcomes can be maximized when two companies with complementary services can come together.”

See all of ImpactAlpha’s recent #dealflow. Send deal tips and news to [email protected].

#Signals: Ahead of the Curve

Real change and other notes from Day Two at Global Entrepreneurship Summit. Gitanjali Swamy, a technology entrepreneur and investment professional, filed a second dispatch from Hyderabad, India: “Today, nearly 40% of STEM (science, technology, engineering and math) graduates are women, but only a handful of top C-suite positions are held by women. The solution isn’t parachuting a few privileged women to the top, or pushing another generation of women into the workplace minefield, where they may be taken down by higher attrition, lower promotion and lack of funding, not to mention sexual harassment, discrimination and pervasive unconscious bias. The most consistently articulated complaint of the 50 women entrepreneurs polled at GES was lack of adequate funding. As the jobs of the future change through the ‘fourth industrial revolution,’ it is critical that we design the workplace of the future to leverage the greater innovation, participation, empathy that a diverse, balanced and respectful workforce delivers to humanity.

“Outside the conference halls, a highly educated and committed group of entrepreneurs was working out ways to collaborate globally. It was not just the many women delegates from hundreds of startups, but the presence of initiatives like Women Investing in Women and investors like the International Financial Corp. All are talking about real initiatives and policy changes today. It is clear from GES that the time for lip service has passed and that men and women together are going to create a better future for the world.”

#2030: Long-Termism

McKinsey: Meeting global challenges can catalyze future jobs. Economists tell us that disruptive technology tends to create large employment shifts, leading to massive job losses in some sectors while over time creating new jobs, usually more than it destroys. When it comes to the rise of artificial intelligence, though, the sheer number of people affected is going to be huge.

A new report, “Jobs Lost, Jobs Gained,” from the McKinsey Global Institute, warns that between 400 million and 800 million people around the world could have their jobs displaced by AI and robotics by 2030. This amounts to a roughly 15% job loss worldwide, ranging from almost zero to one-third depending on the country in question (McKinsey factors in data from 46 countries that represent almost 90% of global GDP). Advanced economies will be more affected than developing ones — one third of US and German workers might be out of a job by 2030. What’s more, about 60% of occupations could see at least a third of their work activities automated. The report also suggests that 75 million to 375 million workers will need to change careers. All workers will need to adapt.

On the upside, McKinsey forecasts that AI will boost productivity and economic growth and create occupations that do not exist today. (Who could’ve foreseen a future on the internet in 1990?) Growing economies require more workers. McKinsey cites several catalysts of future labor demand, including meeting the challenges of climate change, providing health care in aging societies, investing in infrastructure and energy, and producing goods and services for an expanding consuming class, especially in emerging growth markets. Around one billion more people will enter the consuming class by 2025, and global consumption could grow by $23 trillion between 2015 and 2030. As many as 365 million new jobs could be created from the impact of rising incomes alone.

One theme comes across again and again: invest, invest, invest. Investments to prevent, mitigate and adapt to climate change alone could create up to 10 million new jobs globally. Growing economies also need to invest in people — the forthcoming nonhuman competition will require workers with more education, social and emotional skills, creativity and other abilities that will be harder to automate. More mid-career training and transition support for the unemployed will be necessary (see, Shortlist/Spire merger in #dealflow above). It will require an undertaking of Marshall Plan proportions, says Michael Chui, lead author of the report. “The degree of transition that needs to happen over time is a real eye opener,” Chui told Axios.

Onward! Please send news and comments to [email protected].