The Brief | June 14, 2021

The Brief: Black culture on blockchain, community lending, labor market insights, housing equity, Latin America’s creative economy

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Greetings, Agents of Impact! Make sure to tune into this ImpactAlpha partner event this week:

  • Global Impact Investing Network convenes “Next Normal Now – Climate Action,” Wednesday, June 16. On the agenda: Net-zero portfolio approaches, nature- and technology-based climate solutions, and scaling institutional impact investments through catalytic structures. RSVP today.

Featured: The Reconstruction

Certifying products made with Black culture to build an ethical marketplace – on blockchain (podcast). Made with Black Culture is developing a certification process to authenticate products of Black culture. Through a blockchain-based cryptographic mark, MWBC certifies products as ethical commercial uses of Black culture, even as they change hands over time. Made with Black Culture’s goal is to disrupt an industrial complex of cultural production that extracts the creativity of Black people at unfair labor costs. “We all know that culture makes profit. But specifically, the image, likeness, labor and endorsement of the humans that make our Black culture makes profit. And these assets of Black culture have a historical legacy of being extracted,” MWBC’s Tommy Johnson says on the latest episode of The Reconstruction. “Our inspiration was to create a model that could disrupt the monopoly on the assets of Black culture.” Johnson is launching a multi-city tour for MWBC in San Francisco this week to coincide with Juneteenth, the June 19 commemoration of the day in 1865 when the end of slavery was announced in Texas.

Made with Black Culture later this year will begin issuing the certification symbol, or cryptographic mark, that allows a product to be authentically identified, online or off, as MWBC-certified. MWBC issues their certification symbol to verify products in exchange for 1% of net sales. Product makers and owners will invite Black contributors within the company’s leadership and supply chain to “attest” that their image, likeness, labor and/or endorsement has been used in the product, the MWBC website explains. Profits from the public benefit corporation are to be converted into a nonprofit endowment governed by a consortium of community organizations. Fennie Wang, a blockchain entrepreneur and lawyer who is part of the MWBC team, said social verification of the attestations, enabled by blockchain, is a key part of protecting Black culture. “Culture is social,” she says. “So it’s also about celebrating the people behind these products, celebrating their labor, their ingenuity, and the social connections that we make.”

Read on and listen to, “Certifying products made with Black culture to build an ethical marketplace – on blockchain,” the latest episode in The Reconstruction, ImpactAlpha’s series of podcasts on moving capital toward justice. 

Sponsored by BlueMark: Impact Verification

Lessons from 30 impact verifications. You can learn a lot about a car by looking under the hood; you can learn a lot about an impact investor’s practices by analyzing their impact management systems. BlueMark’s Christina Leijonhufvud shares three insights from the company’s second annual “Making the Mark” report, which analyzes more than 30 completed impact verifications. One finding: different investor types have different strengths and areas for improvement. Development finance institutions tend to have more robust ESG risk and performance management systems, for example, while specialized asset managers that invest only in impact strategies often have stronger practices to ensure impact is sustained beyond exit. BlueMark finds larger size and longer track record do not always confer advantages when it comes to impact management. Learn more.

Dealflow: Returns on Inclusion

Olamina Fund lends $13 million to financial institutions in Black, Native and rural communities. The seven new loans bring total investments from the 18-month-old fund from Candide Group to $28.5 million. The fund was launched to provide flexible, low-cost loans to lenders serving high-need communities (see, “Candide Group raises $40 million fund for community lenders advancing racial justice“).

  • Inclusive communities. Olamina’s borrowers include NDN Fund and Native Community Capital, which will use the capital to invest in regenerative agriculture, manufacturing, residential construction and mortgage lending in Native communities. PSE and Historic Clayborn Temple are developing community centers to advance racial justice in Atlanta and Memphis, respectively. Appalachian Community Capital is expanding rural business lending. The National Association for Latino Community Asset Builders is preserving affordable housing in gentrifying neighborhoods and lending to minority-owned businesses. Community Housing Capital provides flexible loans to nonprofit affordable housing developers.
  • Leadership transition. Candide’s Leslie Lindo steps up to managing director of Olamina Fund on July 1, succeeding Lynne Hoey. “I’m excited to continue exploring how we deepen this work to truly invest in racial justice,” Lindo said. Added Hoey: “It has always been the intention for Olamina to be a home for developing fund managers of color.”
  • Read on.

Morgan Stanley backs cohort of sustainable solutions. The big Wall Street bank is dipping into academic institutions, nonprofit initiatives and startup ventures to find breakthrough solutions to climate change, social justice and plastic waste. The first cohort of the Sustainable Solutions Collaborative, selected by the Morgan Stanley Institute for Sustainable Investing, includes Ghana’s pharmacy supply-chain tech venture mPharma; Nairobi’s SunCulture, a solar-powered irrigation pumps and systems maker for smallholder farmers; Trees As Infrastructure, which is looking to help integrate nature into urban infrastructure; and MySOC, a soil carbon data provider and marketplace for farmers.

  • Strategic collaboration. Each organization will receive $250,000 and get year-long support from Morgan Stanley. For cohort participant Siklus, which aims to reduce plastic waste in Indonesia, Morgan Stanley will mobilize consumer packaged goods experts as well as clients. “Their innovation is not a new compound, but a new way of doing business,” Morgan Stanley’s Audrey Choi told ImpactAlpha.
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Micron backs women-owned Seelaus Asset Management to advance housing equity. The Boise, Idaho-based tech company last year committed $50 million to an impact strategy managed by RBC Global Asset Management to spur economic growth in Black and other underserved U.S. communities (see, “Micron invests $50 million to reduce U.S. racial wealth gap”). Now Micron is investing $50 million in Seelaus’ Support Housing Equality, or SHE, which is using mortgage-backed securities to increase access to mortgage financing in underserved communities in the Washington, D.C. and San Francisco Bay areas.

  • The Reconstruction. “Ongoing pandemic challenges continue to amplify socio-economic inequalities that disproportionately impact underrepresented communities across the country,” said Micron’s Sharawn Connors. The gap in homeownership rates between Black and white Americans surpassed 30% in 2020, higher than the rate in 1960 before the passage of fair-housing laws.
  • Check it out

KKR’s Burning Glass merges with Emsi to form labor market data platform. KKR in 2019 acquired a majority stake in Burning Glass, a software company that sells intelligence on labor market patterns to companies and educators (see, “KKR Global Impact looks to leverage labor data with majority stake in Burning Glass”). Emsi, which specializes in labor market analysis and consulting for employees, employers, higher education institutions and workforce development professionals, will join forces with Burning Glass to create Emsi Burning Glass.

  • Follow on and exit. KKR Global Impact Fund will make a follow-on investment in the combined platform. Strada Education Network, which acquired Emsi in 2018, will exit its investment.
  • Dig in

Impact Voices: Creative Economy

Financing Latin America’s creative economy. The economic and social impact of Latin America’s cultural and creative sectors – known as the “orange economy” in the region – is overlooked and undercapitalized. Creative sectors generate more than $177 billion annually and provide jobs for more than 10 million people in Latin America. “Creativity can be put to work for the benefit of individuals, communities and society, including through boosting local, national and international economies,” write Carolina Biquard and Barbara Russi of Fundacion Compromiso in Buenos Aires. With the foundation, Upstart Co-Lab and Nesta, ImpactAlpha is highlighting the impact-oriented banks, institutions and investors in Latin America that are driving capital toward sustainable fashion, architecture, food, film, media and other creative sectors. The following essays are from Volume I of Creativity, Culture & Capitalahora disponible en Español

  • A blended finance solution for sustainable fashion and impact businesses in Brazil. When COVID hit, São Paulo-based Trê, which connects investors with impact-oriented businesses, pivoted its sustainable fashion business accelerator to mobilize emergency financing for 50 small businesses, including women-led creative companies Insecta Shoes, MyBasic and Refazenda. The vehicle pooled capital from large corporations, high-net-worth individuals and retail investors to provide long-term, low-interest loans. Such blended structures can reduce risk for investors and “deliver clear and fair results for all stakeholders,” says Trê’s André Melman. Check it out. (Léelo en Español).
  • An ethical bank in Latin America as the heart of the economy and the creative industries. Santiago-based Banca Ética Latinoamericana, a project of Fundación Dinero y Conciencia, tailors financing for creative businesses with thorough risk-impact evaluations. Understanding the problems a creative business is addressing, says Sebastián Cantuarias of Fundación Dinero y Conciencia, helps build “trust and collaborative work ties between this sector and the banking industry.” More. (Léelo en Español).
  • Corporate venture capital: a risk and an opportunity for Latin America’s orange economy. Content is king. Large content conglomerates like Netflix are opening their doors – and pocketbooks – in Latin America in search of original local content to help attract and retain subscribers and enter new markets. That represents “an opportunity that we cannot let go by, if we are to maximise the economic and social impacts of creativity,” writes Alejandra Luzardo of the Inter-American Development Bank. Go deeper. (Léelo en Español).

Agents of Impact: Follow the Talent

Saadia Madsbjerg, ex-of the Rockefeller Foundation, is named vice president of global community affairs for The Coca-Cola Company and president of The Coca-Cola Foundation… Salil Shetty, of Harvard University’s Carr Center for Human Rights Policy and ex- of Amnesty International, will become vice president of global programs at The Open Society Foundations, Sept. 1… Generate Capital is looking for an investment team vice president/principal… Mutual Housing California is hiring a community builder and resident service coordinator in Woodland, Calif… Facebook is recruiting a carbon-focused sustainability program manager in New York. 

FaithInvest is recruiting a senior advisor of Catholic investing… The U.S. Department of Energy is accepting applications for solar energy innovation fellowships… Ford Foundation’s Darren Walker will lead a conversation with Dambisa Moyo on the role of corporations in the post-COVID world, today at 3pm ET… ImpactAssets is hosting “Impact Investing in the Creative Economy” with Upstart Co-Lab’s Laura Callanan, Stockade Works and Upriver Studios’s Mary Stuart Masterson, Conscious Endeavors’s Lorrie Meyercord, Paskho’s Patrick Robinson, and Deb Parsons of ImpactAssets, June 30.

Thank you for your impact.

– June 14, 2021