Development – Philanthropic/Funding Strategies
$150 Million in Catalytic Capital to Help Address Critical Social Challenges
March 12, 2019 | Press Release
MacArthur today launched the Catalytic Capital Consortium, dedicating $150 million to help address financing gaps in impact investing, particularly for funds and intermediaries that are not a fit for conventional investment. MacArthur is joined in this effort by leading impact investors The Rockefeller Foundation and Omidyar Network, who will add their expertise and financial resources to the Catalytic Capital Consortium. MacArthur’s first investment is $30 million to expand and accelerate The Rockefeller Foundation’s Zero Gap innovative finance portfolio, matched by $30 million from The Rockefeller Foundation.
Catalytic capital is investment capital that is patient, risk-tolerant, concessionary, and flexible in ways that differ from conventional investment. According to Catalytic Capital: Unlocking More Investment and Impact, a report released today by the consulting firm Tideline, catalytic capital is an essential component to achieving the United Nations’ Sustainable Development Goals (SDGs). As the SDGs face an annual $5 trillion to $7 trillion financing gap, catalytic capital can help meet the demand for more capital across the risk-return spectrum, complement and pave the way for conventional investment, and mobilize additional capital through a range of blended finance solutions. The Catalytic Capital Consortium will increase awareness, understanding, and use of catalytic capital as an investment tool, ultimately helping more enterprises secure the financial support they need to grow and scale social and environmental solutions that could improve millions of lives.
“Catalytic capital is needed for impact investing to realize its full potential,” said MacArthur President Julia Stasch, who announced the Consortium at the Global Impact Investing Network Investors’ Council Annual Meeting, alongside the leaders of The Rockefeller Foundation and Omidyar Network. “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. The Catalytic Capital Consortium will help more investors appreciate the importance of this type of capital in yielding deeper, more sustainable impact for people and the planet.”
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. These funds will be managed by The Rockefeller Foundation’s new impact investment management platform, Rockefeller Foundation Impact Investment Management, which aims to tap into mainstream markets and investors, scaling up investments into promising new finance vehicles that help to close the SDG funding gap…