Greetings, Agents of Impact!
Featured: Inclusive Economy
Six trust-based practices to help investors shift power to communities. “Impact” is often defined by who and what we invest in. To truly create systems change and drive greater impact, we must evolve our definition of impact to also reflect how we invest in and support our partners, Smitha Das of World Education Services writes in a guest post on ImpactAlpha. For WES’s Mariam Assefa Fund, a philanthropic investment fund focused on building inclusive economies for immigrant and refugee workers in the U.S. and Canada, that has meant a shift to a “trust-based” philosophy. “Ultimately, through this intentional trust-based approach, we seek to be better partners to the organizations we support and stewards of WES’s resources – becoming facilitators of capital rather than deployers of capital,” she says. Das shares six practices that the nearly 50-year-old social enterprise has cultivated to guide its journey. Among them:
- Flexible by design. WES deploys a mix of equity, debt, fund investments, guarantees, first-loss capital, recoverable grants and other structures to match an organization’s unique financial and impact goals. It has leaned on a peer network to accelerate the learning curve for emerging innovative structures. Before making its first employee-ownership investments, in Apis & Heritage Capital Partners and Project Equity, WES sought out leaders in the field, including Democracy at Work Institute, Social Capital Partners, Gary Investments, Mission Driven Finance, Transform Finance, Seed Commons and many other groups (listen to Project Equity’s Alison Lingane on the Impact Briefing podcast).
- Redefine risk. Rigid diligence processes may screen out emerging fund managers for lack of track record. WES has adopted alternative ways to assess track records and value lived, learned, and labored experiences, such as investment sourcing capabilities, domain expertise, and track records in related work. It has seeded 10 emerging, first-time fund managers, including IRC-CEO, JFF Ventures, Blackstar Stability and Dearfield Fund for Black Wealth (hear from Dearfield Fund’s Aisha Weeks).
- Demonstrate participatory models. WES has backed field building initiatives, such as the REAL People’s Fund and Common Future’s Action Lab: Participatory Investing. A year ago, WES shifted asset allocation decisions for grants and impact investments from its board to staff, and is exploring ways to shift decision-making and ownership to communities.
- Keep reading, “Six trust-based practices to help investors shift power to communities” by WES’s Smitha Das on ImpactAlpha.
Dealflow: Returns on Inclusion
Bitwise Industries raises $80 million to upskill workers on Chicago’s South Side. The Fresno, Calif.-based inclusive tech platform raised $50 million two years ago to take its model for upskilling low-income individuals for high-growth tech jobs to 10 cities (see, “Bitwise Industries raises $50 million to go national with its model for inclusive tech ecosystems”). Bitwise now operates in Toledo, Ohio; El Paso, Texas; Buffalo, N.Y.; Las Cruces, N.M.; and Greeley, Colo., as well as Fresno, Merced, Bakersfield and Oakland in California. Bitwise will use the new investment, led by Kapor Center and Motley Fool, to expand to Chicago’s South Side. “We believe we have a model that can serve people well in different cities across the country and help connect them to high-growth and high-wage careers,” Bitwise co-founder Jake Soberal told ImpactAlpha. “But until you take the time to learn the story of those cities, nobody’s interested in your model.” He added, “What has been critical in our expansion is being a listener and our understanding of those places, and partnering with local leaders to help lead the work.”
- Community partnerships. With local partners, including Chicago’s Mayor Lori Lightfoot, the Obama Foundation and the Comer Science and Education Foundation, Bitwise has trained more than 100 low-income and minority students in six months. “These are high-growth, high-wage jobs that enable companies, schools and local residents to succeed in the digital economy,” said Comer’s Greg Mooney.
- Impact footprint. Bitwise has trained more than 15,000 students, who earn up to $20,000 a year in Bitwise’s apprenticeship program and $60,000 per year on average when they graduate. More than half of graduates are women and Latinos and identify as LGBTQ; close to 10% have previously been incarcerated, says Soberal. Black graduates make up nearly 20%. Graduates to date have reported nearly half a billion dollars in earnings, Soberal says.
- Bitwise Capital. Graduates in Bitwise’s earliest markets are launching their own companies. Bitwise launched Bitwise Capital last year to invest in businesses started by its graduates in Bakersfield, Merced and Fresno. The fund, anchored by Bank of America, raised $3 million to provide pre-seed funding to dozens of its graduate founders. “We’ve already started raising our second fund,” Soberal said.
- Dive in.
Dealflow overflow. Other investment news crossing our desks:
- Planet42, which provides vehicle financing to low-income and underbanked earners in South Africa, raised $100 million in debt and equity funding to expand to Mexico.
- Afrigreen Debt Impact Fund secured €87.5 million ($93 million) in a first close of its fund to finance small and mid-sized commercial and industrial solar installations in Africa.
- The European Investment Bank is providing a €500 million ($530 million) line of credit to Bank Leumi to finance eco-friendly projects and small enterprises in Israel.
Six Short Signals: What We’re Reading
💲 Anti-ESG tax. Republican-led states like Florida and Texas that have banned Wall Street’s biggest municipal bond underwriters for ESG strategies, have foisted a hidden tax on their residents totaling hundreds of millions of dollars. (Bloomberg)
⚡ Southern states embrace climate spending. Republican-led states also make up a new “battery belt” that has claimed the lion’s share of new renewable energy and electric vehicle activity since the Inflation Reduction Act was passed. (The Guardian)
🌾 Soil wealth areas. Special purpose soil-wealth improvement districts in North Carolina, Northern California, Oregon and Wisconsin can spark investment in regenerative agriculture, conservation on working farms and forests, and resilient rural economies. (Croatan Institute)
☀️ Climate + economic development. Emerging markets such as Bangladesh, Egypt, India, Indonesia, Nigeria, and South Africa have new leverage to make a unified “ask” in global climate and development negotiations. (Brooking Institution)
🔋 Energy after Russia’s invasion. Russia’s invasion of Ukraine gave a short-term boost to fossil fuels, yet it also spurred a clean-energy arms race. (MSCI)
📣 Blockchain and impact. Distributed asset ownership. Rightful land ownership. Parametric crop insurance. Basin’s Thomas Morgan round ups opportunities and challenges at the intersection of real world assets and regenerative finance. (Basin)
Agents of Impact: Follow the Talent
NatureVest promotes Julie Abrams to managing director of investment origination… Atlanta Wealth Building Initiative has an opening for a strategies and impact vice president… IDB Group seeks a private finance senior associate in Bogota, Colombia… Driscoll’s is recruiting a sustainability specialist in Watsonville, Calif… American International Group is looking for a sustainability program manager in New York… CDP is hiring a London-based Scope 3 lead for its Science Based Targets Initiative.
Fashion for Good is hiring a financial controller in Amsterdam… Black Farmer Fund is hiring an impact investment associate in New York… Unilever is recruiting a global sustainability senior manager for climate advocacy in London… The Arca Foundation has an opening for an executive director in Washington, D.C… The World Bank Group is looking for 51 global interns… T. Rowe Price is hiring an impact investing and ESG lead portfolio analyst in Baltimore.
VCC Social Enterprises seeks an analyst in Christiansburg, Va… Greenbacker Capital is recruiting an institutional sales professional in New York… Align Impact is looking for an investment research summer analyst in Santa Monica… Women’s World Banking has an opening for a U.S. fund associate… Euclid Network will announce this year’s “Top 100 Women in Social Enterprise” in a webinar on Wednesday, March 8.
Thank you for your impact.
– Feb. 28, 2023