The Role Of Catalytic Capital In Filling The Gaps To Unlock Deep Impact


Foundation: MacArthur Foundation

credit:

One of the fastest-growing subsets of impact investing is " catalytic capital," which is defined as " investments that are more patient, risk-tolerant, concessionary, and flexible than conventional capital," per the MacArthur Foundation.

catalytic capital works to "unlock investments that would not otherwise be possible," the foundation explains.

Examples of catalytic capital include investing in affordable housing, community development, climate solutions, entrepreneurship, financial inclusion, and social innovation.

Examples of what catalytic capital is used for: "Building a track record that can attract investors to riskier opportunities."

"Only some communities, opportunities, and innovations are investment-ready on the terms mainstream investors find acceptable."

"An example of this includes the recent launch of our climate justice fund that unlocks capital for communities to participate in the clean energy transition by getting solar power, EVs, and other technologies into those communities."

"It's a small pilot starting from the ground up but is very impactful work requiring flexible capital."



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