The Brief | June 18, 2024

The Brief: Pointing Kellogg Foundation’s $8 billion toward mission

The team at


Greetings Agents of Impact! We’re taking a Brief break tomorrow in honor of Juneteenth here in the US.

In today’s Brief:

  • Hip hop meets philanthropy 
  • Financing health in Houston
  • Spinning up alternative protein 
  • A “SAFE” for climate tech projects

With managers like Jay-Z’s Marcy Venture, Kellogg Foundation points its $8 billion toward mission. The gut-instinct, hit-seeking culture of the music industry met the strategy-driven, measurement-focused ways of philanthropy several years ago with the W.K. Kellogg Foundation’s $5 million investment in Marcy Venture Partners. The contrasts were on display in a joint video interview with Marcy’s Jay Brown and Kellogg’s La June Montgomery Tabron at last month’s Mission Investors Exchange national conference in Los Angeles. Brown and Shawn Carter, better known as hip-hop icon Jay-Z (and as the virtual accompanist to Alicia Keys at this week’s Tony awards show) earlier co-founded the record label and talent agency Roc Nation. In 2018, they started Marcy Venture with a third partner, Larry Marcus, to “invest in consumer and culture with an emphasis on positive impact.” Kellogg Foundation invested in Marcy Venture’s $325 million second fund in 2022. Bloomberg has reported on talks between Marcy Venture and Pendulum Holdings, a financial advisor to Barack and Michelle Obama founded by D’Rita and Robbie Robinson, to create a combined $1 billion-plus investment manager. 

  • Measure better. Brown said social impact is central to Marcy Venture’s investments, but trying to measure such impact “is the wrong way to do it.” “My measurement is, I’m trying to do the right thing, and I hope everybody else is, too. I don’t want to measure me and measure other people,” he said. In contrast, Tabron said programmatic alignment and impact measurement is key to the mission-driven investments that Kellogg has made since 2007 (for background see, Lessons from the Kellogg Foundation’s $310 million in mission-driven investments“). The investment in Marcy Venture was intended to drive not only job growth and culture shifts but also greater diversity in the investment managers that handle global financial assets, she said. “We are continuing to track and understand the impact, because I think that’s what others need in order to join us,” Tabron said.
  • Foundation perspectives. ImpactAlpha’s media partnership with Mission Investors Exchange included last week’s video interview with filmmaker Ava DuVernay and Ford Foundation’s Roy Swan. Also contributing to our series were Bruce McNamer of Builders Vision on climate opportunities for family offices; Zoila Jennings of Robert Wood Johnson Foundation on community capital to improve health; Rochelle Witharana of California Wellness Foundation on investment manager diversity; Essma Bengabsia of Annie E. Casey Foundation on addressing the broken child care system; and Erika Brice of Kresge Foundation on the case for investing in HBCUs.
  • Mission alignment. Kellogg’s mission investments have so far been a carveout from the foundation’s $8 billion trust and endowment. “It would be our vision that our entire portfolio, not just the mission investment space, should be mission investing,” Tabron said. “We must be aligned, because we are here to improve the lives of children and families, and every dollar we have should be doing that.” Kellogg’s board of trustees is on board with such a shift, she said. “When you have a governance structure that is aligned with your mission, it isn’t a fight,” she said. “Our board is pushing us: ‘What more can you do?’”
  • Keep reading, “With managers like Jay-Z’s Marcy Venture, Kellogg Foundation starts to point its $8 billion toward mission,” by David Bank on ImpactAlpha. And watch the video interview on ImpactAlpha’s YouTube channel

Dealflow: Muni Impact

Houston issues $104 million bond to bolster health services. The Houston metro area, population 2.3 million, swelled by nearly 140,000 people last year. The growth has put pressure on the infrastructure and services of America’s fourth-largest city, including its healthcare systems. To handle the increased patient load, the Harris County Cultural Education Facilities Finance Corp. is issuing a $104 million municipal bond to finance facility and system improvements within the nonprofit Memorial Hermann Health System. HIP Investor gives the issuer an impact rating of 61.5 on a scale of 100. The bond is open until Thursday, June 27. It is being featured as part of ImpactAlpha’s collaboration with HIP Investor to highlight municipal bonds with environmental or social significance.

  • Social determinants of health. Memorial Hermann Health System’s positive rating is “driven by the system’s ability to treat difficult case mixes and provide charity care,” writes Liana Lan for HIP Investor. With $12 billion in assets, the Houston-based health system takes in more complicated patient cases and accepts more people unable to pay. The nonprofit, which owns and operates 14 hospitals and is in joint ventures for another three, is also energy conscious with its cooling and lighting systems and building materials in a region noted for extreme climate vulnerability.
  • Get the full details

Tender Food scores $11 million for plant-based alternative meats. Tender Food (formerly Boston Meats) uses a fiber-spinning process akin to making cotton candy to turn plant protein into “structured” cuts of meat, including steak, chicken breast, seafood and pulled pork. Its Series A funding was led by Rhapsody Venture Partners, with participation from Lowercarbon Capital, Safar Partners, Claridge Partners and Nor’easter Ventures. The Boston-area company is increasing protein production to lower costs and speed commercialization. Existing plant-based meat products in the alternative proteins market are “too expensive, they don’t taste good, and are mostly limited to burgers and sausages,” said Tender’s Christophe Chantre. The company, which attracted actress Natalie Portman to its $12 million seed round two years ago, says its alternative meat products are 100% plant-based.

  • Commercial partners. Early versions of Tender’s products are available in some restaurants and universities in Massachusetts. The startup secured a contract earlier this year with Clover Food Lab, a vegetarian restaurant chain with 14 locations around Boston. Tender Food Is based at Greentown Labs, the largest climate tech startup incubator in North America.

Dealflow overflow. Investment news crossing our desks:

  • Egypt’s iSupply raised $2.5 million to streamline pharmaceutical distribution while integrating small and mid-sized distributors into the supply chain. (Disrupt Africa)
  • Chicago-based Nurse Capital raised $1 million for a pilot fund that will invest in startups that “disrupt the nursing care ecosystem, impact healthcare delivery, and empower nurse entrepreneurs” to bring business ideas to fruition. (Nurse Capital)
  • Transition VC, Ritz Venture Capital, Union Square Ventures and other investors backed a $12 million equity round for Unigrid Battery, a San Diego-based startup making sodium-ion batteries. (Unigrid Battery)

Signals: Deploy!

How D-SAFES can help climate tech startups get projects off the ground. It’s one of the biggest challenges for climate tech startups: shifting from promising technology to commercial deployment. Financing for pilot projects, customer deployments and commercial plants is scarce, especially for projects under $100 million that, although small by development standards, can have a big impact in communities. A report by BCG and nonprofit investor Elemental Excelerator pegs the “scaling gap” for climate tech startups at $150 billion globally. “That’s the capital that’s very high risk but very catalytic, because without it, projects don’t happen,” Jason Salfi of Dimensional Energy, a New York-based startup that upcycles captured carbon, told ImpactAlpha. To cross the chasm, Dimensional is among the first climate tech startups to use a Development-SAFE. A twist on the “simple agreement for equity,” or SAFE, widely used in Silicon Valley, the “D-SAFE” was created by Elemental and law firm Wilson Sonsini to address the needs of startups developing their first plants or commercial facilities. The goal, says Elemental’s Avra van der Zee, is to “accelerate the implementation of essential climate projects.”

  • Pre-construction. The Development-SAFE is earmarked for early-stage project financing, including pre-construction activities such as project design, budgeting, permitting and community engagement. The instrument can convert to equity, like a conventional SAFE, or be treated as a loan if the startup chooses. Unlike project financing, D-SAFE funds are directed at the startup, rather than a project entity. Elemental pairs the financing with coaching and a “development support agreement” that lays out project milestones and expectations.
  • Unlocking capital. Dimensional’s $500,000 D-SAFE enabled the company to undertake engineering studies and detailed project plans for a Niagara Falls-based facility, unlocking 20 times the amount in financing from Seneca Holdings, an investment firm owned by the Seneca Nation. In the past year, Elemental has inked about eight D-SAFEs to jumpstart projects for portfolio companies, including Forum Mobility, a provider of charging depots for zero-emission commercial trucks. Elemental is also working on a $500,000 D-SAFE with geothermal energy developer Fervo Energy for workforce development and apprenticeships in Utah.
  • More.

Agents of Impact: Follow the Talent

Tameo Impact Fund Solutions appoints Safeya Zeitoun as CEO and promoted Ramkumar Narayanan and Vincent Dufresne to executive managers… Noorjit Sidhu, previously with Plug and Play Ventures, joins Social Finance as impact investing associate director in San Francisco… State Street is recruiting a deputy head of Americas for its asset stewardship team in Boston. 

Aligned Climate Capital is looking for a director of operations and an operations assistantPlanetary Scale has an opening for a climate venture finance associate… The Nature Conservancy is hiring an investment analyst… The United Nations Foundation is on the hunt for a development director for the US climate alliance… VentureESG seeks a research fellow in London… Ceniarth launches its new website.

Happening today: Tideline will host its fourth annual “State of the impact investment market” series, featuring Calvert Impact’s Beth Bafford, Fran Seegull of the US Impact Investing Alliance, Vikas Arora of AVPN, Kieron Boyle of Impact Investing Institute, and Zach Jackson of Queensland Investment Corp., at 11am ET.

👉 View (or post) impact investing jobs on ImpactAlpha’s Career Hub.

Thank you for your impact!

– June 18, 2024