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The Week in impact investing: Systemic



TGIF, Agents of Impact!

Agents of Impact Call No. 17: 10x Community Capital. Small businesses and nonprofits will need capital, and lots of it, to re-open and recover from the COVID crash. The network of community development financial institutions, or CDFIs, built over decades, is rallying to extend loans where most banks don’t reach: in low-income and rural communities, to enterprises led by women and people of color, and the 95% of businesses that have fewer than 20 employees. As a COVID response, impact investors are beginning to rally to help CDFIs fulfill their mission. The Call will feature Calvert Impact Capital’s Beth Bafford and Community Reinvestment Fund’s Patrick Davis, along with representatives of local CDFIs and other Agents of Impact who are expanding the pipes for community capital to flow. Join The Call next Thursday, May 21 at 10am PT / 1pm ET / 6pm London. RSVP today.

  • Jump into the conversation. Find the slide deck for CRF’s COVID-19 Community Recovery Vehicle and other resources on ImpactAlpha’s lively #community-capital Slack channel. Not yet on Slack? Sign up here and click on “channel browser” in the left column.

Impact Briefing. On ImpactAlpha’s weekly podcast, host Brian Walsh talks with David Bank about “system-change” and with Dennis Price about Heron Foundation’s Dana Bezerra, this week’s Agent of Impact, who’s working to shift power, a system-change necessity. Listen to this week’s Impact Briefing, share it with your networks, and follow us on AppleSpotify or wherever you get your podcasts.

The Week’s Big 8

1. Systemic, inclusive, catalytic: Overheard at Mission Investors Exchange. ImpactAlpha was the media sponsor of this week’s virtual gathering of mission-investing foundations. The big theme: systems change. Fighting for it (Andrew Young), empowering communities to drive it (Dana Bezerra), and questioning capital’s role in it (Lisa Hall). Foundations that have fought disparities for decades “have a lot of lessons on what needs to happen in this moment,” said Kellogg Foundation’s La June Montgomery Tabron. Communities of color must participate in the recovery and in reimagining what the economy can be, she said. “As this work expands, we can be a part of that expansion.”

2. Climate comeback in COVID recovery plans. If the logic of a sustainable recovery is inescapable, so are the politics. In the U.S. at least, attempts to tie COVID recovery plans to climate action hit a wall of partisan opposition. Pragmatists are renewing the push for renewable energy and other climate solutions. The key: call it jobs, call it infrastructure, call it good economics – anything but climate action. Get it done.

3. Visa Foundation doubles down on women and small businesses (podcast). Even before the COVID crisis hit, the Visa Foundation was planning to use investments as well as grants to support small and micro-businesses, with an emphasis on women (Visa Foundation is a sponsor of ImpactAlpha’s “Capital on the Frontier” series). The COVID crisis spurred the three-year-old foundation to redouble its efforts to use all the tools in its toolbox. On ImpactAlpha‘s Returns on Investment podcast, Visa Foundation’s Graham Macmillan said, “If we put women at the center of the recovery, the recovery will be more durable and inclusive.” Read on and listen in

4. Gender resilience. ImpactAlpha’s 10x Challenge got Catalyst at Large’s Suzanne Biegel thinking: What would it take to 10x gender-lens investing? In a guest post, Biegel lays out four ways to multiply the capital for investments in women, and to be “smarter, bolder and more intentional about how we move it.” Read on.

5. Vive les startups. France has disbursed €1.5 billion ($1.6 billion) in loans from its €4 billion COVID relief package aimed at tech startups. Portugal, Switzerland and the U.K. are among other countries bailing out startups to preserve innovation and jobs. Aid for social enterprises may be next. “We want to make sure that all the work we’ve done over the last decade will be as much as possible preserved for the future,” says Paul-François Fournier of Bpifrance. Plus.

6. Oil industry reckoning. Shell cut its dividend for the first time since World War II. Another tradition – executive pay based on ever-more production of oil and gas – is under challenge as well. BP dropped direct production growth pay incentives as part of its net-zero emissions pledge; some of Repsol execs’ pay will be linked to decarbonization and sustainability. Dig in.

7. Kenya’s creative economy recovery plan. Kenya’s DJs, fashion designers and other creatives have lost the majority of their incomes as the pandemic (temporarily) put an end to events, creative spaces and tourism. HEVA Fund, a Nairobi-based creative economy investor, has a five-point plan to boost creatives on the other side of the crisis. Get inspired.

8. Brent Kessel walks the talk. Like Matthew Weatherley-White and Beth Bafford, “I believe in walking my talk,” says Kessel, founder and CEO of Abacus Wealth Partners, who shared with ImpactAlpha how he’s integrating impact and sustainable investing strategies into his own portfolio. The Kessel family’s largest asset is its equity stake in Abacus. He’s pointing much of the rest of his portfolio at climate change, animal welfare, women’s rights, financial empowerment and poverty alleviation (hat tip to Dana Lanza and Confluence Philanthropies for sharing Kessel’s post). Peek inside.

The Week’s Agent of Impact

Dana Bezerra, Heron Foundation. There was a let-down inside the Heron Foundation when it reached its goal, ahead of schedule, of investing 100% of its $300 million endowment for impact. “It felt like a boom-splat,” Bezerra told ImpactAlpha. “That felt like such a low bar.” Amid aspirational calls for “systems change” at this week’s Mission Investors Exchange virtual conference, Bezerra stood out with a plan to shift power as well as assets. What 100% represented in 2016 was that the foundation had fully invested for impact. When she became president two years ago, Bezerra moved to optimize for Heron’s mission: helping people and communities help themselves. Now Heron is putting investment power over Heron’s assets into the hands of community partners – and grappling with all the complexities that entails. At MIE, Bezerra called out those throwing stones from the “cheap seats,” meaning critics who are not, as she said, “in the arena.” Her invitation: “Join us.”

The power-shift is personal for the farm girl from Fresno, Calif. Growing up on her family’s dairy farm in the San Joaquin Valley, Bezerra saw creameries go bankrupt, as well as tax abatements for multinational food companies. After a decade in private banking and investments, she joined Heron and helped place the foundation at the nexus of community and capital markets. As president, she has been rebuilding Heron’s focus on places “demonstrating an agency of their own, where there’s something happening, where they appear to be starting to say, ‘We need to change.’” Already, the foundation maintains “sub-accounts” for investments in the San Joaquin Valley, Maine and Jackson, Mississippi. Bezerra says Heron will move capital and deployment decision-making to five to 10 geographies over time. Bezerra says the foundation’s “role is to speed that agency and accelerate it and not put our fingerprints all over it.” – Dennis Price

The Week’s Dealflow

Frontier finance. Soros Economic Development Fund commits $15 million to Africa-based gender-lens funds… DFC backs India’s Caspian Debt to fund high-impact businesses… Novastar Ventures’ second fund to invest in basic goods and services in Africa.

Inclusive fintech. Indonesian education lender Pintek gets backing from Accion Venture Lab… Creditshelf secures €62 million for small business lending in Germany.

New initiatives. Nasdaq launches sustainable investment impact tracking service for investors and advisors… GIIN launches Response, Recovery and Resilience Investment Coalition.

Education and jobs. Acumen fund re-ups in Peruvian edtech venture Crehana.

Impact tech. Intello Labs raises $5.9 million for quality-control in India’s food system.

Resilient communities. Turner Impact Capital points to COVID housing crisis with latest apartment acquisition.

The Week’s Jobs

Prudential Financial seeks a vice president of impact investing in Newark, N.J… Open Road Alliance is recruiting a senior risk officer in Seattle, New York or Washington, D.C… The Rockefeller Foundation is hiring a manager for innovation and a program manager for pandemics in New York… Kiva is looking for a managing director for its Kiva Invest in Women Fund in San Francisco, New York, Bogotá or Nairobi.

Qontigo is hiring a head of ESG in New York… BMGI, which manages the assets of Bill and Melinda Gates and The Gates Foundation Trust, is recruiting an ESG analyst… DC Green Bank seeks a chief investment officer… Walton Enterprises is looking for a senior analyst of investments in Denver… The Gates Foundation is hiring a program assistant of philanthropic partnership in Seattle… Big Society Capital is on the hunt for a new CEO in London.

Thank you for reading. 

–May 15, 2020

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