Big Society Capital

Philanthropic Investors Tap “Catalytic Capital” to Seed Innovation & Scale Progress

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by Debra Schwartz Managing Director, MacArthur Foundation 

Often, the most compelling impact investments are made, not found.

I have used that phrase over the years to describe how foundations and other impact-focused investors use “catalytic capital” to support social and environmental progress. These patient, flexible, “catalytic” investments are able to take on more risk and/or accept a lower return than commercial capital in order to finance gains that would not otherwise be possible.

Hedge Funds Support Social Impact Investments in U.K. - The Minute

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Social impact investments, investments made with social benefit as well as financial profit as the bottom line, are a growth trend in Great Britain. The reason? The country’s austerity budget has resulted in significant cuts in government funding for social services. Government grants for social housing have shrunk from £3 billion to £500 million, according to The New York Times. Similar budget cuts have affected aid for the elderly and health care.

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