The Brief | December 13, 2021

The Brief: The Port Royal Experiment, Black-led schools and housing development, global health tech, G7’s impact task force, Orange nature

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Greetings, Agents of Impact! 

Featured: The Reconstruction

The Port Royal Experiment and the moment America almost did the right thing. “We’re an odd family, or maybe it’s just me,” ImpactAlpha’s David Bank admits at the outset of his account of this summer’s road trip through the Lowcountry of South Carolina. All year, ImpactAlpha had been exploring the contours of the historical Reconstruction as a historical antecedent to our own period of social ferment, division and systemic change. “Now, almost by accident, we had landed at the site of the original laboratory for America’s reset after the Civil War, the epicenter of the social innovation known as Reconstruction,” he writes. In the town of Port Royal, S.C., the Port Royal Experiment of the 1860s, as historians describe it, was an early demonstration of the self-organizing capacities of Black communities and individuals, a testbed for free labor and education. 

The pivotal events of the Reconstruction took place in the 1870s, making the 2020s a parade of 150th anniversaries. As then, so too now are we writing a new social contract in a time of dislocation and disruption. Then: the implementation of 13th, 14th and 15th amendments. Now: Build Back Better, the For the People Act, and the John R. Lewis Voting Rights Advancement Act. The ongoing sesquicentennial leads inevitably to the 150th anniversary of the disputed election of 1876, which was settled by a deal to end Reconstruction. The Port Royal Experiment and other successes of the Reconstruction were buried by a violent backlash and decades of Jim Crow. In his play, The Moment Was Now, Gene Bruskin calls the Reconstruction “the moment when America almost did the right thing.” But the sweep of history provides chances anew for social reaction to flip to social renewal, as disruptive economic capacities are absorbed. In our day, Bank writes, “Such an ‘awakening’ could harness the possibilities of a digital, renewable, distributed and connected world to a shared prosperity and broad uplift unlike anything the world has ever seen.”

Keep reading, “The Port Royal Experiment and the moment America almost did the right thing,” by David Bank on ImpactAlpha.

  • The Call No. 36: The Reconstruction This Time. The historic Reconstruction resonates in today’s efforts to expand voting rights, empower stakeholders and establish multi-racial prosperity. 1863 Ventures’ Melissa Bradley, Bill Fletcher Jr., ex- of TransAfrica Forum, and playwright Gene Bruskin will join ImpactAlpha’s Monique Aiken and David Bank to plumb the past, present and future of The Reconstruction, Tuesday, Dec. 14 at 10am PT / 1pm ET. Last chance to RSVP.

Dealflow: Returns on Inclusion

Equitable Facilities Fund secures $300 million to finance Black schools leaders. The New York-based nonprofit social impact fund has since 2018 deployed $585 million in low-cost and long-term facility loans to 120 public charter schools in low-income communities. Less than a quarter of that capital has gone to schools led by a person of color. “Investing in communities of color can no longer be something we do as part of our business plan, it has to be our business plan,” EFF founder Anand Kesavan told ImpactAlpha. The fund is looking to deploy $100 million per year for five years to public charter school leaders of color who can impact 50,000 students in underserved communities.

  • Innovative finance. EFF’s “blended philanthropy” combines donor funds with low-cost debt to fund the loans, which range in size from $15 million to $20 million. EFF’s Michael McGregor said $300 million in philanthropic funds can turn into $1.5 billion in loans. “We are seeking to raise an additional $100 million of philanthropy over the next couple of years and continue to use the same model,” he said. The fund has started to make loans through its pipeline of Black school leaders.
  • The Reconstruction. Studies have shown that Black teachers and principals can improve educational outcomes for Black students. “The barriers school leaders of color encounter when it comes to starting and expanding great schools for their communities are real, significant and unjust,” said Darryl Cobb of the nonprofit Charter School Growth Fund, a strategic partner of EFF that has supported nearly 1,200 public charter schools since 2006.
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Cross-Border Impact Ventures’ health tech fund raises $30 million. The Toronto-based venture firm is looking to raise $200 million to invest in up to 17 global companies developing health tech solutions for underserved populations worldwide. “This includes healthcare tools that are easier to use, provide greater precision and can rapidly deliver diagnostics,” Cross-Border Impact’s Annie Thériault told ImpactAlpha. The women-led fund will apply a gender lens to help save 500,000 lives and improve the health and wellbeing of 10 million women, children and adolescents globally. Grand Challenges Canada, an anchor investor, will monitor the fund’s impact.

  • Catalytic capital. The Swedish International Development Cooperation Agency provided a guarantee to catalyze private commitments in the fund. Other investors include Children’s Investment Fund Foundation, Global Health Investment Corp. and Hamilton Community Foundation.
  • Check it out.

Amazon launches accelerator program for affordable housing developers of color. Black Americans make up nearly half of the people living in federally-financed affordable housing. But only 2% of developers of such housing are Black-led. Amazon’s $2 billion Housing Equity Fund, which aims to create and preserve 20,000 affordable homes for low-income families, committed $21 million to a two-year accelerator program for up to 30 emerging developers of color. “If we are to bring about lasting, holistic, and meaningful change to how affordable housing is developed, developers of color need to be a part of the solution,” said Amazon’s Catherine Buell.

  • Local partners. Amazon has partnered with the Local Initiatives Support Corp. in Washington State’s Puget Sound region, Urban League of Middle Tennessee in Nashville and Capital Impact Partners in Arlington, Va. “Developers of color bring enormous opportunity for creative and inclusive solutions to community-focused real estate development,” said Capital Impact’s Ellis Carr. Separately, Amazon formed a partnership with Enterprise Community Loan Fund to provide grants of up to $200,000 to real estate developers of color.
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Dealflow overflow. Other investment news crossing our desks:

  • Sweden’s Candela scores €24 million ($27.2 million), led by EQT Ventures, to scale production for its hydro-foiling electric boats.
  • KGAL secures €260 million ($294.2 million) for a pan-European renewable energy impact fund.
  • SoftBank Vision Fund’s accelerator allocates $8.7 million to nine European startups led by underrepresented founders.
  • Mirova will manage a €50 million ($56.6 million) carbon sequestration fund on behalf of French telecommunications company Orange.

Signals: Capitalism Reimagined

Impact brain trust delivers proposals for mobilizing capital for a just transition. Mandatory impact accounting. Harmonized sustainability standards. Broadened powers for multilateral development banks and development finance institutions to absorb more risk and mobilize private investment. These are some of the recommendations of the Impact Task Force, a four-month effort convened by the G7 and the Global Steering Group for Impact Investment to accelerate a green and just transition. The 120-member group included Agents of Impact like U.N. special envoy Hiro Mizuno, Courageous Capital’s Laurie Spengler, LeapFrog’s Andrew Kuper, BlackRock’s Sandra Boss, and Generation’s David Blood and Clara Barby. Just eight years away from the 2030 deadline for achieving the Sustainable Development Goals, “the mobilization of private investment and innovation for public good is mission critical,” task force chair Nick Hurd writes in a guest post on ImpactAlpha.  

  • Scaling up. Collaborative investment models that can be replicated to mobilize capital include the Global Energy Alliance for People and Planet, a $1 billion initiative by the IKEA Foundation and Rockefeller Foundation to catalyze investments in distributed renewable energy. The Universal Energy Facility, a multi-donor, results-based financing facility is scaling energy access in Africa. And the Natural Capital Investment Alliance and the LEAF Coalition are promoting natural capital solutions.
  • Transparency. “Investment decisions are being taken today with incomplete information,” the report says. “Impact transparency is a powerful lever for change.” The task force’s recommendations land in the wake of a report by Bloomberg BusinessWeek that questions the environmental, social and governance ratings of MSCI, a major provider of company ratings and indexes underlying “sustainable” funds.
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Agents of Impact: Follow the Talent

Allison Binns, ex- of  Morgan Stanley, is named head of environmental, social and governance and sustainable investing strategies at Angelo Gordon… Mia Diawara, ex- of TPG’s Y Analytics, joins Lowercarbon Capital as partner… Denise Scott is named president of LISC; Lisa Glover continues as interim CEO… Andy Will is promoted to principal at Zeal Capital Partners… Georgetown University’s Beeck Center for Social Impact and Innovation seeks a deputy director.

Kresge Foundation seeks a portfolio manager for its social investing team… Kensington Corridor Trust is hiring a project manager in Philadelphia… Boston Ujima Project is recruiting a fund administrator… Gratitude Railroad is hosting “Impact Measurement and Management,” with Radicle Impact’s Catha Groot, CASE’s Cathy Clark, Jeff Finkelman of Fiduciary Trust International, and BlueMark’s Sarah Gelfand, Tuesday, Dec. 14.

BlueMark and Morgan Lewis are hosting “Making Sense of Sustainable Investing: How Asset Managers Can Comply with Financial Regulations and Align with Industry Standards,” with Andria Weil of Wellington Management Company, Keimpe Keuning of LGT Capital Partners, BlueMark’s Sarah Gelfand, and Morgan Lewis’ Lance Dial, Thursday, Dec. 16… Reuters is hosting “Responsible Business USA,” April 19-20 in New York.

Thank you for your impact.

– Dec 13, 2021