Greetings, Agents of Impact!
Featured: Impact Voices
Lessons from the U.K.: Seven ways to catalyze social investments in high-impact enterprises. Social enterprises and nonprofits can reach into complex areas, target underserved markets and work over the long term to achieve lasting results. Impact investors need a robust pipeline of such organizations dedicated to delivering deep social impact. “Social investments” in such enterprises are a subset of impact investments that are intentional about creating impact by targeting and supporting social enterprises and nonprofits that deliver measured and lasting positive social impact, while providing financial returns. Over the last 18 months, the U.K. National Advisory Board on Impact Investing has identified seven levers for deepening the impact of social investments and attracting needed capital. The working group, including representatives from Big Society Capital, Bridges Fund Management, Triodos and the Impact Management Project, has issued “Re-visioning Social Investment,” a call to action to grow social investment.
“In some sectors, we have seen social investors pave the way for the mainstream, as has been seen in affordable housing and clean energy for communities,” writes Big Society Capital’s Cliff Prior in a guest post on ImpactAlpha. “It is possible for social investors to recreate this in other areas of social challenges.” To do so, social investors must provide more flexible and catalytic capital that accepts disproportionate risk. Social investors can do a better job coordinating capital with local authority pension funds, donor-advised funds, university, hospital or foundation endowments and retail crowdfunding. Tax breaks, guarantees and other subsidies, such as the Social Investment Tax Relief, which incentivizes investments into early-stage, high-risk, high-growth charities and social enterprises, unlock the supply of affordable capital to front-line organizations. Focused government procurement policies, like the UK’s Social Value Act, can help social enterprises win contracts and customers.
Keep reading, “Seven ways to catalyze social investments in high-impact enterprises,” by Cliff Prior on ImpactAlpha.
Dealflow: Follow the Money
Socially Determined raises $7.3 million for ‘social determinants of health.’ An individual’s health is influenced by more than germs or genes. Financial stability plays a role, as do issues of housing, transportation, economic well-being, health literacy, food insecurity, crime and social support. Washington, D.C.-based Socially Determined helps healthcare providers, payers, pharmaceutical companies, and community organizations understand the risks and costs of these so-called social determinants of health. Its cloud-based analytics model culls data around seven issue areas to forecast health outcomes, spending and utilization patterns. “Addressing issues like food insecurity and housing instability not only positively impacts the lives of individuals, but it provides a real cost-savings to health systems, plans, and business stakeholders,” Socially Determined’s Trenor Williams said in a statement. Socially Determined, which launched in 2017, is part of a broader provider effort to address health more holistically. Ziegler Link-Age Funds, ProMedica, 3M, OSF HealthCare, and LRVHealth backed the company’s Series A funding round. Check it out.
- Holistic healthcare. Catholic health provider Bon Secours is one of six providers investing in affordable housing via Accelerating Investments for Healthy Communities. Kaiser Permanente earmarked $200 million to focus on supportive housing and homelessness prevention.
India’s Fasal raises $1.6 million for local-language farm data app. The agri-tech company wants to help small farmers “make data-driven decisions” based on soil, crop and climate conditions. Its app is backed by an analytics platform and sensor networks that farmers deploy in their fields. Impact investors Omnivore and Wavemaker led the round.
Acumen Latin Capital Partners backs SunColombia to electrify rural schools with off-grid solar. Colombia’s grid reaches almost all parts of the country. But 3% of Colombians, mostly in rural areas, still lack access to electricity. SunColombia raised an undisclosed amount of capital from the affiliate of Acumen to install solar panels on rural schools. The company also helps on-grid companies and institutions reduce energy costs with solar power.
Pakistan’s i2i Ventures invests $1.6 million in TelloTalk’s messaging service. The female-led accelerator-turned-venture fund is aiming to seed homegrown startups in Pakistan, where startup capital is scarce. The fund’s second investment is in local messaging and content app TelloTalk.
Signals: Ahead of the Curve
One hundred demonstrations of co-op power. The ranks of cooperatives include household names like ACE Hardware, ShopRite, Associated Press, Sunkist and Ocean Spray. Co-ops span agriculture, finance, energy and healthcare businesses that are owned by and operated for the benefit of their members. The structure is relevant as developed economies like the U.S. grapple with growing wealth and power gaps (see, “Start.co-op: Accelerating co-op businesses to expand ownership for workers and customers”). The annual tally by National Cooperative Bank found the top 100 U.S.-based cooperatives raked in a combined $222 billion in revenues in 2018, up from $214 billion in 2017. The bank, which focuses on serving co-ops, has $75 billion in assets under management and, yes, itself is a co-op. Some takeaways from the NCB Co-op 100:
- Ag rules. The top revenue-generator was CHS Inc., an agribusiness owned by farmers and ranchers in Inver Grove Heights, Minnesota, that reported $32.7 billion in sales. That’s more than double the revenue of the next two largest co-ops, also in agriculture: Land O’ Lakes ($14.9 billion) and Dairy Farmers of America ($13.6 billion) (see, “Land O’Lakes loan fund helps farmers make sustainability upgrades”).
- Community energy. Co-ops have long helped rural areas access energy and communications in areas without the density to attract for-profit enterprises. Roughly a quarter of the top 100 co-ops provide energy and communications. The proliferation of local, distributed, community-based renewables and broadband systems gives the model new relevance.
- Gender imbalance. Of the top 100 co-ops by revenue, just five are run by women.
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Agents of Impact: Follow the Talent
Carmen Rojas, founder of The Workers Lab, is the new president and CEO of the Marguerite Casey Foundation (see, “Carmen Rojas: Building a 21st-century economy that works for working people”)… Cordes Fellowship applications are open to social entrepreneurs seeking to participate in the Opportunity Collaboration in Mexico… Applications for Indie.vc investments will be available Dec. 1, ahead of a 24-hour submission window on Jan. 1, 2020.
Thank you for reading.
– Nov. 4, 2019