Greetings, Agents of Impact!
Featured: Returns on Inclusion
Change Labs’ entrepreneurship hub opens doors for Navajo businesses. Extreme resource constraints and bureaucratic obstacles on tribal lands have stifled entrepreneurship and economic development in Indigenous communities. Indigenous-led nonprofit Change Labs has opened the doors to its entrepreneurship center on the Navajo Nation to guide Navajo and Hopi business owners to resources, services and networks. The hub in Tuba City, Ariz., the largest town on the reservation (population 9,000), is a rare community event and office space that hosts trainings, workshops, Internet access and business advisory services. “We want Navajo entrepreneurship to be a source of pride, creativity, innovation and celebration in the community,” Change Labs’ Heather Fleming tells ImpactAlpha (see, “Agent of Impact: Heather Fleming“). The hub, she says, “is a resource by Native people for Native people. It’s a symbol of permanency.”
- Indigenous contracting. A US law requires the Department of the Interior “to purchase supplies, services, and certain kinds of construction from qualified tribal vendors.” In practice, few Indigenous-owned businesses are able to compete for such contracts. There’s a wealth of opportunities for entrepreneurs to improve basic services on the reservation, including recycling, clean water, electricity access and health services, says Fleming. Such opportunities can’t be seized when the challenges to launching and running – much less scaling – a business are as basic as “‘I don’t have a desk to work from at home,’ or ‘I don’t have a printer,’ or ‘I don’t know where to go to get this question answered,’” she says (see, “Overcoming obstacles to Navajo entrepreneurship”).
- Access to land. Change Labs’ entrepreneurship hub is a case study for one of the biggest challenges for on-reservation businesses: access to land. In a 2018 interview with ImpactAlpha, Fleming said the organization had identified a site. “We expect it will take us a year to get the space up and going,” she said at the time. It was only the first of many sites Change Labs chased; the organization was repeatedly denied a site lease, or ghosted amid inquiries, because of unclear land policies, poor governance and red tape. “It was just excuse after excuse,” recalls Fleming. In 2021, Tuba City offered to lease Change Labs a plot. Change Labs dealt with challenges to its lease, supply chain issues with its developers, and uncertainty about whether it could get power connected until weeks before its hub opened. Fleming says Change Labs’ journey underscores why so many promising business ideas fail. “People in the community are trying to do good things for the community, and they constantly get told no.”
- Accelerating racial equity. Change Labs participated in Common Future’s racial equity accelerator, which provided $500,000 in unrestricted grants and technical assistance to 10 diverse women-led organizations developing creative models closing racial wealth gaps and driving economic equity (see, “Common Future launches first racial equity accelerator”). The women are forging pathways to homeownership and rental housing for Black families, building safety nets for Black and low-income single mothers, and supporting immigrants. “Native communities have the lowest labor force participation compared to any other major racial group in the US, which results in cycles of generational poverty, poor health and economic outcomes,” says Onawa Haynes of Hozhonigo Institute at the conclusion of the three-month program. Haynes hopes to raise $150,000 to help Indigenous women access entrepreneurship resources and job opportunities. Read more.
Dealflow: Growth Markets
Seedstars Youth Wellbeing Ventures raises $20 million for impact ventures in emerging markets. The fund is a partnership between Geneva-based Seedstars and Swiss foundation Fondation Botnar, which are putting up an initial $20 million to invest in early-stage ventures over the next four to five years. “If we see more companies fitting our investment criteria and theory of change, we can deploy more,” Seedstars’ Benjamin Langer told ImpactAlpha. Seedstars Youth Wellbeing will write pre-seed to Series B checks of up to $500,000 in companies improving health services, food security, water and sanitation, education, affordable housing and other sectors. The fund will invest with a network of co-investors in Tanzania, Ghana, Senegal, Morocco and Egypt.
- Impact mandate. Africa’s population is the youngest in the world. “Rapid urbanization and the increasing number of young people living in cities present both unique challenges and opportunities,” said Fondation Botnar’s Antoine Veyrassat. The duo’s first investment was in Senegal’s Chargel, a logistics tech startup improving working conditions for young Senegalese truck drivers.
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Known Holdings merges with Blk Grvty to launch innovation lab. Fresh off its acquisition of Living Cities’ fund business, Known Holdings is absorbing Black-led research and advisory group Blk Grvty to establish an innovation lab under the Known umbrella. The lab will explore capital models and provide grants to support Black and Brown fund managers. Blk Grvty, A Known Lab, as the new unit is called, kicked off the partnership on Juneteenth with a $100,000 grant to Cake Ventures, a Black woman-owned venture capital fund that invests in startups with models geared toward demographic trends, such as an aging and increasingly diverse population. The merger is the latest move by Known Holdings, a diverse-led asset management and finance firm, to consolidate talent and assets in its quest to shift capital to eliminate racial wealth gaps (see, “Moving capital at scale to elevate communities of color with Valerie Red-Horse Mohl”).
- Catalytic capital. Blk Grvty was founded in 2021 by JaNay Queen Nazaire, an advisor and former chief strategy officer at Living Cities, and consultant and entrepreneur Chipo Sachirarwe. The nonprofit advised on the structure of the Living Cities Catalyst Fund III and helped Ben & Jerry’s increase Black franchise ownership, among other activities. The group will lead Known’s capital model innovation and “build new systems to fuel the changes so deeply needed in finance,” said Known’s Jim Casselberry.
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T. Rowe Price will deposit $50 million with CNote’s cash management. Baltimore-based T. Rowe Price is one of a growing number of corporations, along with Mastercard, Google and Netflix, tapping CNote’s impact investing platform to put their idle cash to good use. CNote invests the deposits in community development financial institutions, or CDFIs, which lend the funds to increase economic mobility and financial inclusion in diverse and low-income communities. T. Rowe Price’s deposits are being deployed to support small businesses, access to healthcare and education, and affordable housing development, said T. Rowe Price’s Raymone Jackson.
- Milestones. CNote has deployed $400 million into deposit accounts and fixed-income investments, CNote’s Cat Berman told ImpactAlpha. For US corporations sitting on trillions of dollars in cash, “depositing cash with intention is an opportunity to advance” ESG and racial equity goals while strengthening cash management, said Berman. “CNote’s technology has made it easy. Racial and climate justice has made it urgent. It’s an opportunity we hope all investors will consider.”
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Dealflow overflow. Other news crossing our desks:
- Washington, DC-based Hydrostat acquired IrriWatch, a Dutch software venture that provides daily updates on soil and crop conditions to farmers globally. (SpaceNews)
- Mumbai-based Everest Fleet, which manages rideshare fleets for Uber and Ola drivers, raised $20 million to add 10,000 electric vehicles to its fleet by 2026. (TechCrunch)
- Sydney-based biotech startup Number 8 Bio raised A$1.8 million (US$1.2 million) in pre-seed funding to reduce livestock’s methane emissions using engineered microbes. (AFN)
- Milestones: Bank of America committed $500 million in equity to more than 150 diverse female fund managers who have invested in more than 1,000 entrepreneurs. Portfolio funds include Latina-led Chingona Ventures and Black-led Zeal Capital Partners. The milestone more than doubles the bank’s initial $200 million commitment (see, “Bank of America places $150 million with minority-led fund managers”).
Six Short Signals: What We’re Reading
1. Sizing the market for impact management. The global impact measurement and management sector, which includes MSCI, S&P, Bloomberg, Morningstar, Moody’s and others, grew to $7.7 billion in revenue in 2020 and is expected to grow at 15% per year to become a $31.2 billion sector by 2030. (Aspire Impact)
2. World Bank’s climate fail. Hundreds of projects in the bank’s climate portfolio, often in poorer countries, have little to do with climate change mitigation or adaptation, according to a new analysis. (Center for Global Development)
3. Entry-level bias. Firms that took part in Diverse Asset Managers Initiative’s annual investment consultant survey show less racial and gender diversity among junior staff versus those in last year’s survey. (DAMI)
4. Mitigating racial inequity risk. Investors are taking on systemic inequities by going beyond corporate governance and other portfolio-level actions to system-level actions, including collaborating with peers, building shared knowledge bases, setting new industry standards, and wielding political influence. (The Investment Integration Project)
5. Investing in women’s health. To support a thriving environment for women’s reproductive health, investors can deploy their usual tools, from due diligence to engagement, advocacy, and screening. They can be much more effective if they also contribute to a healthy policy conversation on women’s health. (Preventable Surprise)
6. The evolving role of chief sustainability officers. CSOs once focused on optics and reputation. Today, many are interacting with investors and setting strategy, report Robert Eccles and Alison Taylor. (Harvard Business Review)
Agents of Impact: Follow the Talent
Calvert Impact appoints Grace Eddy to its board of directors. Eddy is the director of Generation Investment Management’s philanthropic arm… Skoll Foundation seeks a California-based portfolio and investments analyst… MCE Social Capital is looking for an impact measurement and management manager in Washington, DC, or on the East Coast… Obvious Ventures is recruiting a principal… Upstart Co-Lab seeks a manager of operations and communications.
A partnership between Mission Driven Finance and Impact Charitable aims to direct more impact-first capital to nonprofits, for-profit social enterprises, projects and impact funds by reducing barriers for fund managers and project sponsors… Environmental Finance names Preservation of Affordable Housing as the recipient of the 2023 sustainability bond of the year… Singapore-based private equity fund ABC Impact becomes a B Corp. The fund’s parent company Temasek achieved the same status in October last year.
Thank you for your impact.
– June 20, 2023
