Integrated Capital

by Cindy Willard

At Impact Charitable, we believe change is possible. Even in the face of increasingly complicated challenges. As the issues that we face as a community become more complex and connected, we recognize that the tools of the past may not be as effective in our current situation. We work hard to think about the impact that we and our partners want to achieve, and then to develop the tools that create capital and community centered solutions that provide stepping stones for projects and organizations toward impact and sustainability. 

There has been a small but growing movement in the impact investing ecosystem for some time now to think about Integrated Capital. Most often this is defined as bringing grants alongside investment to address specific critical issues. While this might sound simplistic, it actually represents a significant shift from the predominant paradigm of trying to address problems through grants or investments alone.This is a great step forward from the utilization of one tool, often grants, to try to solve the issues facing our communities. While grants continue to be needed as part of the funding continuum, they are limited, as is any tool alone, in the impact they can make. And there are times when investment capital alone is not the only funding needed to support impact projects. Increasingly, deploying the right type of capital at the right stage of development is a critical factor in achieving the desired results. 

We, at Impact Charitable, focus on being “impact first” in our work as an impact capital catalyst. For us that means that we work with partners who have identified an issue to address and understand what a positive impact would look like. Only then do we talk about developing ways to use capital to address the issue and propel a project toward success and sustainability. 

One of our most recent examples utilizing integrated capital is our partnership with Sephora through the Sephora Accelerate program, a brand incubation program with a focus on founders who are people of color. The goal of their program is to ensure there are brands in the beauty industry representative of the colors, races, and ethnicities that make up the Americas. Through Impact Charitable, entrepreneurs in their program have access to integrated capital in the form of grants and loans as needed to support their business growth.

What’s Next for Integrated Capital

At Impact Charitable, from our very beginning, we have advocated for a range of capital and funding options. And today, we are thinking about integrating capital even more holistically. 

Through a new partnership with Mission Driven Finance, we have a unique opportunity to leverage the power of integrated capital on the supply side. Increasingly, impact-first investment funds are attracting philanthropic capital through program-related investments and grants, in addition to traditional investment sources. Through Catalytic Capital Partners, a new wholly-owned subsidiary of Impact Charitable, we are able to offer project sponsors professionally managed impact first funds that can source capital from the full range of sources much more efficiently. We are engaging even more donors and investors, from a variety of sources including individuals, governmental entities, philanthropic sources and institutional funds, to address focus areas and impact themes as well as deploying those funds to a variety of organizations, both for-profit and nonprofit, across the spectrum of grants and investments. 

We are also beginning to think about opportunities to integrate our expertise in designing, deploying, and managing Direct Cash Assistance and Economic Mobility programs with our Impact-First Investment strategies to further wealth building opportunities. We are exploring whether an investment fund focused on providing affordable real estate options for early childhood caregivers would benefit from a program that provides monthly stipends to those caregivers, providing resources to help them get established. Also being considered is whether  tenants in new affordable workforce housing would benefit from a program that provides payments into an individual development account that could be used in the future to assist with a transition to home ownership. 

Perhaps most importantly, an integrated capital approach allows for us to think about all types of capital, including social capital. By better expanding and including social capital in our programs and funds, we work toward being increasingly community-driven. By engaging in conversations about the types of funds that would be most useful to communities and projects, instead of approaching all issues with the same tool, we are able to hear about what has been successful and what has created barriers. We are integrating other perspectives into our decision making by empowering investment committees that represent our investees in their experience as well as allowing communities to design direct cash programming that addresses their local context and strengths. This is important and difficult work, that we won’t always get right the first time. We are committed to learning along the way, which is one of our core values

All of our work is done in partnership; we pride ourselves in being a connector. We would invite you to share with us your experiences in integrated capital so that we can continue to build the best solutions to advance economic justice.

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