The Brief | June 28, 2021

The Brief: Closing racial wealth gaps in Atlanta, financing employee ownership, upskilling Africa’s youth, electric hydrogen, COVID long-haulers

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Greetings, Agents of Impact! 

The Call No. 29: Capitalism Reimagined. Stakeholder governance. Worker power. Racial equity. There’s still time to register for tomorrow’s Agents of Impact Call, “Rewriting rules and designing policy for the stakeholder economy.” Join PolicyLink’s Michael McAfee and Mahlet Getachew, former Delaware Chief Justice Leo Strine Jr., U.S. Impact Investing Alliance’s Fran Seegull, Andres Vinelli of the Center for American Progress and hundreds of other Agents, tomorrow, June 29 at 10am PT / 1pm ET / 6pm London. RSVP now.

Featured: The Reconstruction

Building community power and agency to redress racial wealth gaps in Atlanta (podcast). Atlanta has been the de facto headquarters of the civil rights movement since the 1950s and 1960s. A 1971 issue of Ebony hailed the city as a Black Mecca. From Martin Luther King Jr., Andrew Young and John Lewis, to Stacey Abrams and Michael ‘Killer Mike’ Render, Black leaders have worked with churches, businesses, universities and thousands of Atlantans to forge victories in voting rights, desegregation and equal economic opportunity. The Atlanta Wealth Building Initiative since 2017 has addressed a major piece of unfinished business: Atlanta’s racial wealth gap. “We have redefined wealth,” says Latresa McLawhorn Ryan, the Initiative’s managing director, who joined host Monique Aiken on The Reconstruction podcast to talk about strategies to build income and wealth for Black Atlantans. Wealth, McLawhorn Ryan says “is centered around power and agency. It’s social capital. It is really ultimately about the ability to make choices and craft a future for yourself, your family.” 

Atlanta Wealth Building Initiative supports capacity building and business models that help Atlanta’s Black-owned businesses improve opportunities for workers as they grow and hire. One grantee, Gangstas to Growers, is building worker-owned cooperatives that provide employment and opportunities in agriculture for at-risk youth and formerly incarcerated people. Village Market showcases and trains small Black-owned business owners specializing in conscious or all-natural products to keep money circulating in Atlanta’s Black communities. The big idea: “Building wealth in a way that doesn’t extract from community for individual gain,” says McLawhorn Ryan. Wealth, she says “has a responsibility to community, has a responsibility to ensuring that everyone in the community has not just an opportunity but the reality of wealth.” 

🎧 Listen to Monique Aiken’s conversation with Latresa McLawhorn Ryan. 

🔎 Read “The Reconstruction: Building community power and agency to redress racial wealth gaps in Atlanta,” by Monique Aiken and Anjali Deshmukh. Catch Monique’s earlier conversations and all of ImpactAlpha’s coverage at The Reconstruction.

Dealflow: Worker Ownership

Employee ownership to get a boost from Apis & Heritage’s buyout fund. The Bethesda, Md.-based investment firm helps small and mid-sized businesses with large workforces of color transition to employee ownership (see, “Black and brown employee ownership for the post-COVID economy“). The Apis & Heritage Legacy Fund is looking to raise $50 million to finance at least eight employee-led buyouts, or ELBOs, over five years. In the pipeline: a Midwest sewer and pipe services company, a janitorial enterprise in the Northeast, an energy retrofitter, and an electric services company in the Mid-Atlantic, A&H’s Michael Brownrigg told ImpactAlpha. A&H worker-owners can retire with $70,000 to $120,000 in savings. “We are focused 100% on helping workforces of color own their businesses, and to therefore own their futures,” said Brownrigg. Investors backing the fund’s $30 million first close include Rockefeller Foundation’s Zero Gap Fund and the Ford and Skoll foundations, along with Capricorn Investments, Gary Community Investments, Ascension Investment Management and others.

  • ELBO structure and benefits. The employee-led buyout model helps retiring business owners transfer ownership to employees at a fair market price. LISC’s New Markets Support Company will be the senior lender in the transactions. Employee-owned deals also come with tax advantages: businesses that are entirely owned by their employees pay no federal taxes, and no state tax in 44 states, said Brownrigg. “On day one, our new companies have 15-25% more resources than when they were traditionally-owned.”
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Madagascar’s Sayna secures investment to offer digital skills-training in francophone Africa. Nearly 95% of Africa’s youth are informally employed. Antananarivo-based Sayna upskills young people to meet the continent’s growing need for digital skills. The woman-led venture secured an undisclosed amount of early-funding from impact investors Miarakap, based in Madagascar, and Investisseurs & Partenaires, which invests in impact companies in francophone Africa.

  • Digital upskilling. Three-year-old Sayna provides online training courses and “microtask” job-matching. Unlike other digital-upskilling ventures in Africa, like Samasource or Andela, Sayna’s platform serves students and businesses in Africa’s French-speaking countries. The company, which has trained 200 students, is partnering with U.S.-based tech bootcamp Holberton.
  • Flexible finance. Sayna’s financing includes a €100,000 ($119,000) repayable advance from I&P Acceleration Technologies, which offers capital and technical assistance to Africa’s digital startups.
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Dealflow overflow. Other investment news crossing our desks:

  • ENOUGH (formerly 3M Bio), a Glasgow-based sustainable protein maker, scores €42 million ($50 million) from animal feed producer Nutreco, Olympic Investments, insurance company AXA’s impact fund and others.
  • Citi Impact Fund leads a $35 million Series C round for New York-based recycling company Recycle Track Systems.
  • Breakthrough Energy Ventures, Prelude Ventures and Capricorn’s Technology Impact Fund invest in hydrogen-fuel producer Electric Hydrogen’s $24 million Series A round.
  • Fintech MFast raises $1.5 million to connect Vietnam’s un- and underbanked with financial services and insurance products.
  • Community Capital Management’s Community Impact Bond Fund reaches $3 billion in assets under management.

Impact Voices: Disability Justice

Disability justice for COVID long-haulers in the post-pandemic economy. Disability inclusion is emblematic of the struggle for justice. Ibrahim Rashid, a public policy student at the University of Chicago (and ImpactAlpha contributor), recovered from COVID last November. In May, he suddenly lost the ability to walk. “I am a 24-year-old COVID-long hauler, with no prior health conditions, and one of the countless newly disabled Americans created by this pandemic,” Rashid writes in a guest post on ImpactAlpha. Even before the pandemic, people with disabilities were over-represented in the criminal justice system and among those living in long-term poverty. Now, more than a third of people who contract COVID experience long-term symptoms. The majority are Black, Indigenous or people of color; many have limited access to healthcare, sub-living wages and no paid sick-leave. Disability inclusion is core to any social justice investment thesis. “The impact investing community must organize to build an economy that centers disability justice, and support COVID long-haulers,” says Rashid. “Given the scale of the pandemic, and the number of long-haulers on the way, now is not the time for complacency.”

  • Disability lens. The Disability Equality Index can help build a roadmap towards disability inclusion during due diligence. The consulting firm Beyond Impact is working toward disability inclusion and financial independence. The Disability Opportunity Fund, a community development finance institution, provides financing for affordable housing and other services for people with disabilities. Smartjob catalyzes impact investments to reduce the disability wage gap. Rebecca Cokley is the Ford Foundation’s first-ever disability rights program officer.
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Agents of Impact: Follow the Talent

JUST Capital adds six new board directors, including Jim Bildner of Draper Richards Kaplan Foundation, Roosevelt Giles of Atlanta Life Financial Group, Amy Liu of the Brookings Institution’s Metropolitan Policy Program, Annette Nazareth of Davis Polk & Wardwell, John W. Rogers Jr. of Ariel Investments, and Mark Weinberger, ex- of EY… LeapFrog Investments is hiring a manager of strategic planning in Sydney.

Mission Driven Finance is recruiting for its community finance fellowship in San Diego… LISC is hosting “The Federal Policy Landscape for Community Development,” with former Treasury Secretary Robert Rubin, Brian Deese of the White House National Economic Council, Ellis Carr of Capital Impact Partners, and Rose Garcia of Tierra Del Sol Housing Corp., Tuesday, July 13.

Thank you for your impact.

– June 28, 2021