Policy Priorities to Unlock Catalytic Capital

A series of white papers exploring federal policy options to scale the impact investing market by unlocking catalytic capital

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Catalytic capital is a powerful tool in making transformative change. It can mitigate risk and seed new ideas for impact investments that seek to achieve positive social and economic outcomes in addition to financial return.

While the impact investing market has grown in recent years, additional sources of catalytic capital are needed to mobilize traditional return-seeking capital at scale to address the pressing social needs and promote inclusive economic growth in the United States.

The Sorenson Impact Center is pleased to present a series of white papers exploring three impactful federal policy options:


1. Unlocking Catalytic Capital: Federal Requirements for Outcomes-based Financing [BRIEF] [FULL WHITE PAPER]

Federal statutes that authorize outcomes-based funding have not resulted in wide adoption of these funding models. Introducing a requirement for states to expend a percentage of new money in targeted funding areas can catalyze and scale investment to improve social outcomes, creating meaningful change.



2. Unlocking Catalytic Capital: United States Domestic Investment Fund (USDIF) [BRIEF] [FULL WHITE PAPER]

Existing federal efforts to direct public and private resources to small businesses and low-income communities face limitations in meeting the needs of underserved communities and populations. A new U.S. Domestic Investment Fund can address these limitations and promote greater and more resilient inclusive economic growth. The USDIF would be dedicated solely to providing public catalytic capital to enable scaling of private investment to address domestic social and economic development needs and national economic priorities.



3. Unlocking Catalytic Capital: Community Reinvestment Act (CRA) 
[BRIEF] [FULL WHITE PAPER]

The Community Reinvestment Act has the potential to increase bank provision and facilitation of catalytic capital in support of low- and moderate-income communities. This proposal explores ways in which CRA could expand the pool of catalytic capital providers and enhance LMI community investment readiness. We discuss the limitations of CRA, including the ratings and evaluations process, regulatory consensus, and additional incentives outside of the CRA.

THE PARTNER

Tipping Point Fund on Impact Investing, a project of the New Venture Fund

THE CHALLENGE

Research and formulate realistic, meaningful policies to increase the supply of catalytic capital in order to unlock private capital and accelerate market growth in low- and middle-income communities.

THE OUTCOME

A series of White Papers covering federal policy ideas designed to unlock catalytic capital to scale the impact investing market and build market infrastructure.

THE IMPACT

Inform and equip policymakers with a suite of federal policy solutions that incentivize greater provision of “catalytic capital” to grow and scale the broader impact investing market.

CONTRIBUTORS

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STUDENTS

Peri Brimley

Jack Jowers

David Hill

Paige Remington