Maximizing Catalytic Capital’s Leveraging Power
Mission Investors Exchange (MIE) partnered with Catalytic Capital Consortium (C3) in March 2024 for a virtual learning opportunity to discuss how foundations and other asset owners can maximize the power of their catalytic capital. Showcasing findings from four U.S.-focused research projects that were supported by C3, panel experts shared key considerations and lessons learned from their recent research efforts. This body of work strengthens the evidence base on catalytic capital and focuses on answering questions such as when and how catalytic capital is needed, what role it plays, and the kind of results and impact it can help create. Catalytic capital is defined as patient, risk-tolerant, or concessionary capital that often helps attract additional investors to a project. The webinar drew out action-oriented findings and concluded with identifying best practices for investors.
MIE is proud to participate in the C3 Grantmaking program geared to fund organizations increasing the knowledge, awareness, and use of catalytic capital among a diverse set of investors globally, with a focus on identifying and sharing best practices.
The C3 team is organizing two more webinars to share learnings and insights for investors from other grantee projects focused on better understanding the role and contributions of catalytic capital across markets, thematic areas and regions of the world. Please contact C3 at [email protected] for details and to register for these.
Speakers:
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Jennifer Astone, Principal, Integrated Capital Investing
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Noah Markman, General Manager, Quinco
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M. Yasmina McCarty, CEO, New Growth Innovation Network
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Urmi Sengupta, Senior Program Officer, Impact Investments, MacArthur Foundation and Chair, Project Advisory Board, C3 Grantmaking
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Brett Theodos, Senior Fellow and Director, Community Economic Development Hub, Urban Institute
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James Wahls, Senior Vice President, Programs & Initiatives, MIE (Moderator)
Takeaways:
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Partnership is key to accelerating the deployment of catalytic capital.
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Partnership with local CDCs and CDFIs is a strong pathway to get catalytic capital into communities.
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Partnering with your community through place-based, community-led, and community-owned projects is an important process to create sustained investment success.
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Flexibility in an investment relationship is crucial to effective catalytic capital.
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Deploying catalytic capital can be a long process that requires much resourcing, so it’s important to have patience in investments and stay the course.
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Learning more about the communities you are working with can help to tear down biases and foster a more flexible investor/investee relationship.
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Scaling investments is the next step for increasing catalytic capital.
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Catalytic capital investments have been proven to advance BIPOC wealth creation and now need to be scaled.
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Continue to invest in infrastructure and groups that are growing the space and support innovative funds that have the potential to scale.
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Catalytic capital can be very effective in unlocking impact and results for stakeholders.
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Employee ownership financing structures tell the story of how important catalytic investors have been in supporting market transformations and demonstrating replicable models that can create widespread impact while reducing economic inequality and supporting high quality stable jobs.
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Final Takeaway- “The problems and capital gaps that lead us to consider catalytic capital are complex and multifaceted. They require working with stakeholders other than impact investors and capital providers to be successful, sustainable, and replicable.” –Urmi Sengupta, Senior Program Officer, Impact Investments, MacArthur Foundation
Published Materials:
Indigenizing Catalytic Capital: How to get to Catalytic Capital +, authored by Kate R. Finn, Melanie Matteliano, Jennifer Astone, and David LeZaks, demonstrates how Native entrepreneurs, enterprises, and intermediaries are creating long-term, culturally-aligned investment success through catalytic capital. The report conceptualizes “Catalytic Capital +” as the additional factors and approaches to creative finance that make capital truly catalytic for Native entrepreneurs. The research details themes about the current capital landscape in Indian Country, highlights case studies which illuminate emerging best practices in catalytic investments, and concludes with five recommendations which center on redistributing power in investing and finance to address structural racism, forward Native self-determination, and support flourishing Indigenous economies which create both wealth and social wellbeing.
Indigenizing Catalytic Capital: How to get to Catalytic Capital +, authored by Kate R. Finn, Melanie Matteliano, Jennifer Astone, and David LeZaks, demonstrates how Native entrepreneurs, enterprises, and intermediaries are creating long-term, culturally-aligned investment success through catalytic capital. The report conceptualizes “Catalytic Capital +” as the additional factors and approaches to creative finance that make capital truly catalytic for Native entrepreneurs. The research details themes about the current capital landscape in Indian Country, highlights case studies which illuminate emerging best practices in catalytic investments, and concludes with five recommendations which center on redistributing power in investing and finance to address structural racism, forward Native self-determination, and support flourishing Indigenous economies which create both wealth and social wellbeing.
Creating Shared Value: An Investor Guide to the Growing Employee Ownership Investment Opportunity, authored by Noah Klein-Markman for MSI Integrity. This report was supported in part by the MacArthur Foundation, the Omidyar Network, and the Rockefeller Foundation through their support of the Catalytic Capital Consortium Grantmaking, a project of New Venture Fund.
Catalytic Capital for BIPOC Wealth Creation, The Catalytic Capital Consortium (C3) provided a grant to New Growth Innovation Network (NGIN) under the “Strengthening the Evidence Base” grant program to synthesize evidence on catalytic investments that have aimed to address the racial wealth gap and catalyze additional capital flows for BIPOC wealth creation.
In this project, NGIN endeavored to:
In this project, NGIN endeavored to:
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Analyze catalytic investments focused on wealth creation for BIPOC.
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Analyze the conditions and previous catalytic investments that enabled private sector racial justice capital commitments in 2020.
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Translate insights into investor-relevant evidence on catalytic capital for community and economic infrastructure that supports BIPOC wealth creation.
The project was delivered by NGIN CEO, M. Yasmina McCarty, and Vice President Swati Ghosh and advised by two leading experts, Erika Seth Davies, CEO of Rhia Ventures and founder of The Racial Equity Asset Lab (The REAL), and Lyneir Richardson, Executive Director of The Center for Urban Entrepreneurship and Economic Development (CUEED) at Rutgers Business School and co-founder and CEO of Chicago TREND.
Catalytic Capital for Neighborhood Reinvestment, authored by Brett Theodos, Noah McDaniel, and Tanay Nunna from the Urban Institute and Eric Hangen from I Squared Community Development Consulting, this brief seeks to explain how catalytic capital works by looking at models of its successful deployment and limitations to the benefits it can generate. We use the city of Cleveland, Ohio—a place with a deep history of catalytic capital investing for neighborhood revitalization—to illustrate and explore broader themes that we think are applicable to impact investors, community developers, philanthropies, and governments.
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