“The pressing challenges we face today, particularly rising inequality, require us to reimagine capitalism and shift how we think about the role of capital in our economy and society.”
THE AFRICA BAZAAR Staff Writer
March 13, 2019
Three major international non-government organization powerhouses, MacArthur foundation, Rockefeller Foundation, and Omidyar foundation said Tuesday that they have decided to combine their expertise and resources to form an alliance with the aim to find solutions to world’s most pressing challenges, using a $150 million dedicated investment fund named Catalytic Capital Consortium to mobilize capital and investments into Sustainable Development Goals.
The consortium, which will run under a new asset management platform managed by Rockefeller Foundation and dubbed Rockefeller Foundation Impact Investment Management, seeks to address financing gaps in small-medium-sized social enterprises by providing these enterprises with access to capital to secure and grow their businesses. It plans to tap into established markets and investors, scaling up investments into promising new finance vehicles that help to close the SDGs funding gaps.
The consortium said the C3 differs from traditional investment vehicles since it is set up to be flexible, concessionary, pertinacious, and more auspicious to taking risks in ways that help meet the demands for more capital across the risk-return spectrum, as well as complement and pave the way for conventional investment to mobilize additional capital through a range of blended finance solutions.
“The cost of solving the world’s most critical problems runs into the trillions of dollars. We must stand on each other’s shoulders if we are to solve them,” President of the Rockefeller Foundation Dr. Rajiv J. Shah said in a statement. “I am proud to announce C3 collaboration with MacArthur Foundation and the intention to create RF IIM, a new asset management platform.”
The MacAthur will contribute its inaugural investment into the C3 funds by putting $30 million into the Rockefeller Foundation’s Zero Gap innovative finance portfolio to expedite and expand the program. The fund will be matched alike by the Rockefeller Foundation.
The outstanding balance from the MacArthur’s $150-million allocation will provide matching investments to a select cohort of funds and other intermediaries that demonstrate a powerful use of catalytic capital with the potential for significant impact addressing the SDGs.
Speaking about the funds, MacArthur President Julia Stasch, who announced the alliance at the Global Impact Investing Network Investors’ Council Annual Meeting, alongside the leaders of The Rockefeller Foundation and Omidyar Network stated that, “Catalytic capital is needed for impact investing to realize its full potential. While impact investing is growing rapidly, much of the attention focuses on market-rate returns, leaving a serious gap in financing opportunities for many promising impact enterprises and funds that could help address critical social challenges.”
She noted that the C3 “will help more investors appreciate the importance of this type of capital in yielding deeper, more sustainable impact for people and the planet.”
Mike Kubzansky, Managing Partner at Omidyar Network said investors need a greater understanding of the range of capital across the returns continuum. “The pressing challenges we face today, particularly rising inequality, require us to reimagine capitalism and shift how we think about the role of capital in our economy and society. This initiative has the potential to help investors better target catalytic capital to where it can have the greatest impact—ultimately helping to pioneer new innovations, drive sector-level change, and unlock larger sums of investment to build more equitable economies.”
Since it was launched in 2015, The Rockefeller Foundation’s Zero Gap grant portfolio has grown to nearly 50 unique financial structures across 28 countries. MacArthur’s matching investment in Zero Gap builds on this work, marking a unique impact investing collaboration between two foundations, where each will invest $30 million with the aim of catalyzing at least $1 billion in new capital to help meet the SDGs.