Greetings, Agents of Impact!
👋 Unlocking social returns with investments in HBCUs. The Plug was a pioneering, data-driven publication covering the Black tech innovation and investment ecosystem, founded by our friend Sherrell Dorsey and bootstrapped on a model similar to ImpactAlpha’s (listen to our podcast interview, “The Plug’s Sherrell Dorsey centers communities of color in the future of work”). When Dorsey decided to change directions in March, ImpactAlpha offered to help carry on The Plug’s editorial mission. Sherrell has joined ImpactAlpha as a contributing editor and this week will lead our call on LinkedIn Live exploring how investors, employers and policymakers are mobilizing finance for and tapping talent at the nation’s historically Black colleges and universities (for background, see, “Social returns on investments in HBCUs rise as affirmative action recedes”). Please welcome Sherrell to ImpactAlpha, Wednesday, July 26, at 10 am PT / 1pm ET / 6pm London. Last chance to RSVP.
Some of our special guests:
- Mirtha Donastorg, a reporter at The Atlanta Journal-Constitution, led The Plug’s coverage of HBCU innovation. At the AJC, she covered AltFinance, a $90 million commitment from Apollo, Ares and Oaktree, to help HBCU students enter the alternative investment industry.
- Troy Duffie, a graduate of Howard University in Washington, DC, helps lead the Milken Institute’s HBCU Strategic Initiative and HBCU Fellows Program to build the financial services industry’s next generation of leaders in asset management.
- Carla Whitlock, a banker and consultant, serves on the board of trustees of Tuskegee University in Alabama, where she leads the audit and enterprise risk committee.
- Taj Ahmad Eldridge leads the CREST initiative at Jobs for the Future, where he’s tapping HBCU talent to help fill thousands of clean energy jobs in the US.
What HBCU investments and innovations are you involved in? Drop us a note or share them on the call. RSVP today.
Featured: Ownership Economy
On east side of Kansas City, LocalCode adds community ownership to the real estate toolkit. In Kansas City, Mo., Troost Avenue divides the predominantly Black eastside from whiter and more affluent neighborhoods to the west. To overcome the eastside’s legacy of redlining, exclusionary zoning and blockbusting, two large mixed-use commercial real estate developments are pioneering a novel model for community ownership. The project’s backers plan to eventually transfer majority ownership of the projects to local residents. “Ultimately, we’d like the community to own an overwhelming majority of the assets,” says Ajia Morris, a local real estate developer and co-founder of LocalCode Kansas City. “I can’t think of very many ways or times and opportunities that people from communities like mine have had an opportunity to invest in such large-scale projects.” LocalCode’s structure for community ownership is part of a new set of models that are using ownership of residential and commercial properties to foster wealth creation and counter dislocation for communities often ill-served by real estate development (ICYMI: “Paths to inclusive wealth run through residential and commercial real estate”).
- Ownership ecosystem. In North Carolina, Partners in Equity is helping primarily Black business owners buy the commercial properties in which they operate. In Chicago and Baltimore, Chicago Trend co-invests with local residents to acquire and redevelop blighted neighborhood shopping centers in majority-Black neighborhoods. Washington, DC-based Blackstar Stability buys predatory contract-for-deed home loans and helps homeowners transition to more stable, traditional mortgages. “True wealth is created by owning assets that generate revenue and appreciate over time,” Trend’s Lyneir Richardson said at a roundtable at the Aspen Institute in Washington, DC. “If we really want to close the racial wealth gap, we’ve got to focus on commercial real estate.”
- Keep reading, “On east side of Kansas City, LocalCode adds community ownership to the real estate toolkit,” by Roodgally Senatus on ImpactAlpha.
Dealflow: Circular Economy
Norfund invests $12.7 million in circular economy startups in West Africa. As much as 80% of Africa’s municipal solid waste is recyclable; just 4% is recycled. Norway’s development finance institution provided a $2.2 million convertible loan to Nigeria-based Wecyclers, which offers subscription-based waste recycling in lower-income urban neighborhoods. The woman-led company encourages households to sort and turn in their recyclable waste with a points system that can be used to buy food and other essentials. The funding is intended to help Wecyclers build a recycling facility for PET plastics. Wecyclers also scored funding from the SDG Outcomes Fund as part of a spate of African development impact bonds (see, “BII anchors SDG Outcomes Fund with $10 million for development impact bonds”).
- Greening manufacturing. Norfund also extended a $10.5 million loan to Ghana-based Miniplast, a 25-year-old company that makes plastic consumer and industrial products. The company launched a business line in 2020 to make recycled products out of locally-sourced plastic. Miniplast will ramp up its recycling capacity and hire more local workers.
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New York backs small business lending with a follow-on fund for CDFIs. In the depths of the Covid pandemic, New York, California and a coalition of southern states created loan funds to help small, underserved businesses stay afloat with access to low-cost capital. The “community recovery vehicles,” designed by Calvert Impact Capital and the Community Reinvestment Fund, feature special purpose trusts that buy up loans from community lenders to free up capital for further lending. Small businesses apply for loans and are matched with local lenders via a common intake portal (see, “Innovative CDFIs scale up to help underserved communities move from relief to recovery”). New York’s Forward Loan Fund has channeled $97 million to the state’s small businesses, half of which had never applied for a business loan before. Last week, New York Gov. Kathy Hochul announced a follow-on $150 million fund for small businesses and nonprofits, with a focus on those in low-income, underbanked or rural communities.
- Making the case. The Forward Loan Fund worked with 60 Decibels to interview some of the businesses about “the role the loans played in keeping their businesses open, their employees on payroll, reducing their stress levels, and managing their finances,” said Beth Bafford of Calvert Impact, which manages the fund. “We also heard that many business owners needed more credit to grow.” Lenders participating in the second fund include Accion Opportunity Fund, Ascendus, NDC’s Community Impact Loan Fund, Pursuit and TruFund Financial Services.
- Yo, check it out.
Dealflow overflow. Other news crossing our desks:
- Generation Investment Management led a $150 million funding round for OneTrust to help companies manage ESG requirements and navigate business privacy, security and ethics issues. (OneTrust)
- FMO and the Global Climate Partnership Fund committed $20 million to Nairobi-based Starsight Premier Energy Finance to build commercial and industrial solar facilities. (Afrik21)
- Breakthrough Energy Ventures and Climate Investment backed AeroSeal, an Ohio-based company that makes a sealant to help home and building owners cut energy waste and costs. (Aeroseal)
Agents of Impact: Follow the Talent
State Street Global Advisors seeks an ESG strategist and vice president in London… Vanguard is hiring an investment stewardship lead analyst in the Philadelphia area… Estée Lauder seeks a director of ESG data in New York… Northern California Grantmakers seeks a director for climate and disaster resilience in San Francisco… The Nature Conservancy is looking for a remote climate and renewable energy program director for its Western US and Canada division.
Thank you for your impact.
– July 25, 2023
