CHICAGO (Oct. 13, 2021)—The Catalytic Capital Consortium (C3) today announced awards to support 14 research projects that will analyze the uses of catalytic capital around the world and help build the evidence base to fuel additional risk-tolerant, flexible and patient investments that address critical global challenges.
Established in 2019, C3 is an investment, learning, and market development initiative created and led by the John D. and Catherine T. MacArthur Foundation, The Rockefeller Foundation and the Omidyar Network. Together, these partners jointly fund the C3 Grantmaking program, which is housed at and administered the New Venture Fund (NVF). C3 aims to increase the flow and impact of catalytic capital to make social and environmental progress that would not otherwise be possible.
The C3 Grantmaking program will award up to $10 million over three years for research, networking, peer learning and other field-building activities, with a specific focus on foundations, development finance institutions, family offices and ultra high net worth individuals.
“We are very excited about the momentum and potential of these projects. The C3 Grantmaking program aims to build a strong evidence base about the value of catalytic capital and equip investors with the data, knowledge and insight needed to drive deep and sustainable impact,” said Emily Duma, C3 Grantmaking Program Officer at NVF. “It is part of the C3 initiative’s larger strategy to help push the impact investment field to reach its full potential for creating inclusive growth, fighting climate change, improving health, achieving the U.N. Sustainable Development Goals and ultimately building a more just, equitable and resilient world.”
The 14 awardees include universities, nonprofits and collaborations spanning seven countries. Collectively, they will use the funding to study catalytic capital across diverse geographies and sectors—assessing capital gaps for entrepreneurs in Africa, housing finance bottlenecks in Eastern Europe, economic inequality and barriers to accessing capital in Indigenous communities and communities of color in the United States, financing challenges for innovations in science and engineering that promise positive global impact, and more.
A total of 87 groups based in 17 countries applied for funding in response to the C3 Grantmaking program’s public call for proposals last fall. Awards for the following 14 research and market development projects will total $2.2 million:
- Aceli Africa and Dalberg Advisors (East Africa): Gather data and generate industry learning alongside the implementation of a pioneering catalytic capital model focused on agricultural small and medium-sized enterprises (SMEs) finance in East Africa and relevant to other sectors globally.
- Ashesi University and Impact Investing Ghana (Ghana): Outline why, where and how catalytic capital has been deployed in Ghana to drive the growth of SMEs, the positive and negative outcomes of the financing and what gaps still exist.
- Center for Financial Inclusion (Global): Deepen the collective understanding of how catalytic capital has spurred development of a thriving digital credit industry in some markets, how this capital has driven growth, and how it has led to unintended consequences—drawing on lessons to develop guardrails for investors and other financial inclusion stakeholders to help shape responsible market development.
- First Peoples Worldwide (U.S.): Evaluate how catalytic capital is being deployed in Indigenous communities and to Indigenous-led enterprises and entrepreneurs. By articulating knowledge gaps, this research will push funders to deploy catalytic capital to address some of the starkest racial and socio-economic disparities in North America.
- Impact Finance Research Consortium (Global): Accelerate data collection for the Impact Finance Database with a focus on researching catalytic capital. IFRC will then share findings in a practitioner-oriented report, professional convenings, webinars and podcasts.
- Initiative for Blended Finance at University of Zurich, the University of Cape Town GSB Bertha Centre for Social Innovation and Entrepreneurship and Roots of Impact (Global South): Research the perspectives of entrepreneurs in the Global South as the end users of catalytic capital, focusing on creating positive impact in developing and emerging markets.
- Institute for Multi-Stakeholder Initiative (MSI) Integrity (U.S.): Collect and share information on past and present catalytic capital deployments in employee-owned enterprises in the United States, a sector that includes an estimated 7,000 firms. It will highlight key lessons learned, under-explored vehicles for finance and potential pathways to scale.
- Investisseurs & Partenaires (Africa): Analyze the experience of multiple funds providing catalytic and other capital to African entrepreneurs through more than 150 transactions in order to share best practices and provide recommendations to maximize the efficiency of catalytic capital.
- New Growth Innovation Network (U.S.): Synthesize evidence on the ways that catalytic capital has supported wealth creation in Black, Indigenous and People of Color (BIPOC) communities and identify additional investment opportunities for catalytic capital providers to contribute to dismantling the racial wealth gap and advance an inclusive economic recovery from COVID-19.
- Open Capital Advisors (Africa): Explore a specific segment of dynamic small and growing businesses (SGBs) in Africa to document how catalytic debt could unlock growth. This work will bring the voice of SGBs into the conversation about catalytic capital while identifying potential ways to enable participation from local debt providers and opportunities for impact.
- Periferia Policy and Research Center (Eastern/Southeastern Europe): Research the characteristics of both the demand side and the supply side of the housing sector in 8 countries in Eastern and Southeastern Europe and identify bottlenecks that need to be overcome for the two sides to meet.
- Prime Coalition (Global): Characterize capital gaps in science and engineering innovation that are matched to key social challenges, and build a framework to help practitioners decide whether or not a specific gap might be appropriate for catalytic capital intervention.
- The Urban Institute (U.S.): Delve into transaction-level insights—both market-rate and catalytic capital—to better understand how and where mission-driven organizations are deploying catalytic capital and the gaps that remain. Using a comparative case study of two cities, the project will build insights as regards to small business lending, mortgage finance and commercial real estate finance.
- 200 Million Artisans (India): Study, document and make recommendations for the role of catalytic capital in India’s artisan sector, with a specific focus on how it applies to craft-based micro, small and medium-sized businesses.
Learn more about these projects and their proposed outcomes here.
Read reflections from our C3 Project Advisory Board on the broader applicant pool and the impact these awards will have on the field here.
This portfolio of awards complements an earlier round of grantmaking this year that included $1.2 million to support four impact investing networks in their analysis of catalytic capital data and expand their capacity to disseminate research, models and best practices.
In addition to its support for the joint C3 Grantmaking program at NVF, the MacArthur Foundation has committed a total of $110 million to a portfolio of 11 impact investments that demonstrate the powerful role of catalytic capital in advancing inclusion, innovation and sustainability around the world.
Project Advisory Board Blog Post
Catalytic Capital Consortium Strategic Partners
John D. and Catherine T. MacArthur Foundation
The John D. and Catherine T. MacArthur Foundation supports creative people, effective institutions, and influential networks building a more just, verdant, and peaceful world. MacArthur is placing a few big bets that truly significant progress is possible on some of the world’s most pressing social challenges, including advancing global climate solutions, decreasing nuclear risk, promoting local justice reform in the U.S., and reducing corruption in Africa’s most populous country, Nigeria. In addition to the MacArthur Fellows Program and the global 100&Change competition, the Foundation continues its historic commitments to the role of journalism in a responsive democracy as well as the vitality of our headquarters city, Chicago. MacArthur is also working to build the field of impact investing and increase the supply of catalytic capital to address social and environmental challenges around the world.
The Rockefeller Foundation is a pioneering philanthropy built on collaborative partnerships at the frontiers of science, technology, and innovation to enable individuals, families, and communities to flourish. Rockefeller works to promote the well-being of humanity and make opportunity universal. Their focus is on scaling renewable energy for all, stimulating economic mobility, and ensuring equitable access to healthy and nutritious food. For more information, sign up for their newsletter at rockefellerfoundation.org and follow them on Twitter @RockefellerFdn.
Established by philanthropists Pam and Pierre Omidyar, Omidyar Network is a social change venture that has committed more than $1 billion to innovative for-profit companies and nonprofit organizations since 2004. Omidyar Network works to reimagine critical systems and the ideas that govern them, and to build more inclusive and equitable societies in which individuals have the social, economic, and democratic power to thrive.
The photo above features rangSutra, a partner of 200 Million Artisans. rangSutra is owned by over 3000 artisan shareholders, 80% of whom are women. The relationship between catalytic capital providers and cooperatives like rangSutra is one thing that 200 Million Artisans will explore through the funded research.