The Brief | June 3, 2019

Recapping Call No. 9, treating chronic disease in Africa, managing student debt in the U.S., smart place-based investing

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Greetings, Agents of Impact!

Featured: ImpactAlpha Original

Agents of Impact Call No. 9: Impact investors move “beyond trade-offs” (audio). “There’s no one right way to be an impact investor,” Omidyar Network’s Robynn Steffen said on ImpactAlpha’s Agents of Impact Call No. 9 last week. “What’s important is that, as a market, we can invest across the returns continuum.” The Call, which wrapped up our series of podcasts with investors who are moving “beyond trade-offs,” featured three such investors: Ommeed Sathe from Prudential Financial, Sandeep Farias from Elevar Equity and Liesel Pritzker Simmons from family office Blue Haven Initiative. For Prudential, carving off 20% of its $1 billion impact portfolio for catalytic, high-impact investments is a way to test opportunities for mainstream potential. “If no one invests when things are more nascent, nothing moves into traditional markets,” Sathe said. Elevar targets markets like India and Latin America with hundreds of millions of underserved customers, which can support distribution models that are built for scale, in which profit and impact can increase together. Blue Haven Initiative has different pools of capital that stretch across the risk-and-returns continuum. That includes a dedicated catalytic capital pool that targets early, unproven opportunities.

Thinking beyond tradeoffs, and even beyond finance, could be the key to ensuring impact investors’ relevance and influence. “When we see things that markets can’t fix, can we call our senators? Is this a policy issue?” Pritzker Simmons said. One such issue, she says, is taxes. “I think families like mine should get taxed significantly more than we already are, and take some of the decision-making onus off of me and put it in the hands of elected officials who are democratically elected. I think it’s hypocritical if families like mine didn’t support a wealth tax and a tax-system overhaul.”

Keep reading our recap of last week’s Agents of Impact Call No. 9, “Impact investors move ‘beyond trade-offs’” by Jessica Pothering on ImpactAlpha, and listen to an audio replay.

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Dealflow: Follow the Money

Kleiner Perkins backs Pillar to tackle student debt repayment. New York-based Pillar wants to help whittle down the $1.5 trillion in student debt in the U.S. by helping people plan their loan repayment and automate their payments. The platform aggregates information on borrowers’ loans, income and spending and recommends how to pay down debt quickly. Its solution stands to help women, in particular, who are a majority of student loan borrowers and are “disproportionately impacted due to the gender pay gap,” the company says. Venture capital firm Kleiner Perkins led the company’s $5.5 million funding round, along with individual investors, including Patrick Kavanagh and Nadia Asoyan from Robinhood and former Wealthfront CEO Noah Weiss. More.

Médecins de Nuit secures funding to address chronic diseases healthcare gaps. Incidence rates for health issues like heart disease, cancer and diabetes are on the rise in Africa as in many other parts of the world. But most funders in Africa focus on fighting infectious diseases, according to Kinshasa-based Médecins de Nuit. The firm launched in 2011 to help patients prevent and treat chronic health issues. The organization has three clinics in the capital of the Democratic Republic of Congo and operates ambulances and home health services. Impact investment firm XSML, which provides early- and growth- stage funding to small- and mid-sized companies in Central and East Africa, doubled down on an early investment Médecins de Nuit with an undisclosed follow-on investment via its $50 million African Rivers Fund. Read on.

Signals: Ahead of the Curve

Getting smarter about place-based investing. A set of briefs from Urban Institute and Mission Investors Exchange round up the ‘tricks of the trade’ in local investing. Among the highlights: need and opportunity maps in Minneapolis-St. Paul and New Mexico; collaborative investment efforts in Buffalo and Chicago; and coordinated ecosystems in Michigan and Baltimore. “Place-based impact investing is no longer a solo endeavor for many foundations across the United States,” write MIE’s Melanie Audette, MacArthur Foundation’s John Balbach and Urban’s Shena Ashley. “Foundations are increasingly joining and leading cross-sector efforts to invest in the communities at the heart of their mission.”

  • Capital gaps in New York state. The Community Foundation for Greater Buffalo anchored the Western New York Impact Investment Fund. The fund has raised $8 million from philanthropists, corporations and private individuals to boost the supply of impact capital in the region. Key to the effort: A Heron Foundation-funded study that confirmed capital gaps.
  • Value-add in Chicago. Approximately $65 million in investments from Chicago Community Trust and MacArthur Foundation helped Benefit Chicago raise an additional $31 million from individuals and other institutions for Chicago nonprofits and social ventures. The collaboration has deployed or approved $53 million in investments to more than a dozen organizations that wouldn’t have been made “but for” the initiative.
  • On-ramps in Michigan. Collaborative efforts anchored by the Kellogg Foundation led to the $30 million Michigan Good Food Fund, which has lent more than $10 million to “good food” enterprises that benefit underserved communities. The Council of Michigan Foundations has mobilized $44 million in foundation investments for Michigan by providing education, legal resources and economies of scale for its member organizations.
  • Entrepreneurs in Baltimore. The Annie E. Casey Foundation discovered local entrepreneurs lacked capacity to receive investment. AECF mobilized Baltimore Community Foundation, Surdna Foundation, Abell Foundation, JP Morgan Chase, and PNC Bank for the Baltimore Small Business Support Fund to support community development finance institutions and small-business technical assistance providers serving people of color in Baltimore.
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Agents of Impact: Follow the Talent

Annie Donovan, ex- of CDFI Fund, joins LISC as chief operating officer… Luke Seidl, formerly with Veris Wealth Partners, joins Kiva as senior investment manager for small and growing businesses… Community Capital Management hires Martha Schuman as senior client portfolio manager for the west coast… Global Development Incubator is hiring a stakeholder engagement manager for its Collaborative for Frontier Finance (see, “The four ‘missing middles’ among small and growing businesses)… Dropbox is looking for a social impact manager in San Francisco… Etsy is accepting applications from nonprofits for its 2019 Maker Cities initiative to support micro-businesses.

June 3, 2019.