Catalytic Capital Consortium

An investment, learning, and market development initiative bringing together leading impact investors to encourage greater impact and use of catalytic capital

 


We invite grant proposals that focus on strengthening the evidence base for catalytic capital.
View grant guidelines and application ›


 

OVERVIEW

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Catalytic capital—investment capital that is patient, risk-tolerant, concessionary, and flexible—is an essential tool to support impact-driven enterprises and organizations that lack access to capital on suitable terms through the conventional marketplace. The aim of catalytic capital is to unlock impact and additional investment that would not otherwise be possible, strengthening communities, expanding opportunity and economic growth, and fueling innovation that advances the well-being of people and the planet, while laying the groundwork for mainstream investors to participate in transformative investments.

To make substantial progress toward a more just, inclusive, and resilient world, we need more catalytic capital to flow. The Catalytic Capital Consortium, or C3, aims to demonstrate the power of this form of investment to extend and deepen the reach of the impact investing field, helping to address the annual funding shortfall of $5 trillion to $7 trillion that is hindering the world from reaching the UN Sustainable Development Goals. The initiative is helping a select group of outstanding, diverse funds address some of the world’s most pressing challenges, while also building knowledge, awareness, and use of catalytic capital globally.

To implement the C3 initiative, MacArthur is making impact investments totaling up to $150 million to support funds and intermediaries that demonstrate a use of catalytic capital across diverse sectors and geographies. It is designed to reduce risk, build track records, and increase the scale of promising fund managers. C3 investments set the stage for other investors—both impact-oriented and conventional—to participate and fuel additional growth. The Rockefeller Foundation and Omidyar Network have joined us as strategic partners in C3, each providing a portion of the initiative’s pooled grant funding. The investments related to C3 are funded solely by MacArthur.

FIELD PARTNERSHIPS

As part of the initiative, MacArthur is finalizing investments up to $150 million in the aggregate that demonstrate a powerful use of catalytic capital across diverse sectors and geographies. As collaboration is essential to the successful use of catalytic capital, we use the term “field partnership” to describe the efforts that we support with our investments. Our current field partnerships include:

  • ALIVE Ventures: $5 million equity investment to Acumen Latin America Early Growth Fund LP, a private equity impact fund managed by Acumen LatAm Impact Ventures, which invests in companies that tackle inequality in Colombia, Peru, and Central America, with a focus on agribusiness, education/access to formal jobs, and renewable energy.
  • Impact America Fund II: $7.5 million equity investment to provide catalytic venture capital to early-stage companies that are advancing economic agency for low- and moderate-income communities of color in the U.S. 
  • One Acre: $10 million program related investment loan to the One Acre Fund, a nonprofit social enterprise supporting smallholder farmers in Africa with financing and training through a new capital structure demonstrating the way catalytic capital can bridge financing gaps, spark additional investments, and help sustain and grow high-impact nonprofits.
  • Terra Silva: $20 million in debt in collaboration with the David and Lucile Packard Foundation to launch Terra Silva, an impact investing initiative designed to respond to global climate change by making investments focused on the conservation, restoration, and sustainable management of tropical forests worldwide.
  • Prime Impact Fund: $5 million investment in Prime Impact Fund to address a critical capital gap for climate-relevant innovation by financing technology-based solutions with the potential to significantly reduce greenhouse gas emissions.
  • Zero Gap: Up to $30 million equity investment to expand and accelerate The Rockefeller Foundation’s Zero Gap initiative, which aims to tap into mainstream markets and investors, scaling up investments into promising new finance vehicles that help to close the funding gap.

 

GRANTMAKING

Collectively, the C3 strategic partners, working through a project managed by New Venture Fund, are providing up to $10 million in grants to fuel learning and market development related to catalytic capital. As a first step, the C3 grantmaking program is supporting work to equip the investor community with the knowledge and tools required to deploy greater and more effective investments of catalytic capital. This will involve efforts to build and advance knowledge about catalytic capital, as well as engage and work closely with practitioners.

Based on research and analysis of market needs, the C3 grantmaking program will fund work in three categories:

  • Strengthening the Evidence Base: building knowledge about why and where catalytic capital is needed, what it looks like, who has been involved, how it has been deployed, and what outcomes have been the result, drawing on current and historical experience from around the world.
  • Advancing Practice: codifying and advancing knowledge about how catalytic capital can best be deployed, in partnership with leading practitioners.
  • Open Source Ideas: supporting additional ideas and efforts that could contribute significantly to building a stronger catalytic capital market.

As a complement to these workstreams, C3 is working with network partners to engage investor audiences and amplify learnings and messages.

 

About Catalytic Capital

Catalytic capital is investment capital that is patient, risk-tolerant, concessionary, and flexible in ways that differ from conventional investment. It is an essential tool to bridge capital gaps and achieve breadth and depth of impact, while complementing conventional investing. Catalytic capital delivers impact and unlocks conventional investment in several ways. It can help prove new and innovative products and business models; demonstrate the financial viability of high-need geographies and populations; establish a track record for new and diverse managers; and grow small-scale efforts so they can attract conventional investment. Catalytic capital can take the form of debt, equity, or guarantees.

Introductory resources on catalytic capital ›

ADDITIONAL RESOURCES

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We encourage investors, entrepreneurs, advisors, researchers, and others to join us in expanding catalytic capital investment and learning. 

Contact Us ›

We encourage you to contact us in order to:

  • Share your experiences with catalytic capital, including how you have invested or benefited from catalytic capital and lessons learned.
  • Ask questions and propose research topics related to catalytic capital.
  • Request information on how catalytic capital is being used today and where more is needed.
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