The Transformative 25

25 funds transforming finance for people and planet

Philanthropy is missing a strategic opportunity for transformative finance.

As foundations and mission-aligned investors swiftly shift their investments into ESG screened funds and direct investments in values-aligned companies and entrepreneurs, they overlook many visionary funds and fund managers who are forging the future that we need. These funds are myth-busters and courageous innovations. More than rethinking our financial system, they are creating viable alternatives to investing in people and planet for generations to come.

This list of 25 funds – The Transformative 25 ­– is an invitation to push past philanthropy’s comfort zone and consider the question:

What funds are transforming finance for people and planet?

I searched but could not find such a list that prioritized how investment and finance is offered, not just its outcome or impact.[1] This list emphasizes funds making finance work for people and the planet by people trained both inside and outside of finance. I offer this as inspiration and reference, a library for learning. We need a different conversation around investment in philanthropy, one that is motivated by our unique position as values-based institutions that can ask hard questions about our financial system.

As someone who works with foundations to coach, educate, and catalyze their learning around integrated capital strategies, I know that foundations and investors don’t know how or where to start in identifying transformative fund opportunities that are diversified, have quality management, and a groundbreaking thesis. These catalytic opportunities can only attract institutional capital if philanthropy makes the first move.

It is high time to go beyond standard impact investing language and contribute to a just transition. It’s important to understand why a fund would request a loan guarantee, a grant or an investment with a 0-2% return. This sector agnostic list helps to show how these innovative fund managers are creating opportunities for businesses and communities with their holistic approach to finance and other services.

Criteria for the Transformative 25

The fund must meet at least three of the following four criteria:

    • Use integrated capital to reach those unable to access finance
    • Engage with creative finance structures for shared prosperity
    • Focus on social, relational, and ecological returns as mission centric
    • Reshape ownership and governance for shared prosperity

Integrated Capital

In the words and work of RSF Social Finance, “integrated capital is the coordinated use of different forms of financial capital and non-financial resources to support strategies and enterprises working to solve complex social and environmental problems.” Many of the funds are associated with non-profits which enable them to receive integrated capital or a combination of grants, investments and allyship necessary to extend finance to those who are unable to meet conventional finance requirements. Others, such as NDN Fund for Native Americans, are centered within movements. These flexible structures enable them to bundle support to an investee or entrepreneur.

NESsT Enterprise Loan Fund was created in 2018 to align with and support their 20+ year-old incubation program with its goal of creating dignified jobs for people most in need with one-on-one business development support to social entrepreneurs in emerging markets. Their definition of social entrepreneurs includes: Indigenous People, people with disabilities, former inmates, women, small producers and artisans, and youth.

Creative Financing Structures

A creative financing structure is “when a loan or investment is put together in a different, unusual or innovative way to create a circumstance where a person with a nontraditional credit history or a lack of collateral can access those resources.” From recoverable grants to evergreen holding companies, these funds reshape our expectations and understanding of what is possible.

The Perennial Fund offers revenue-based financing for farmers transitioning to regenerative organic agriculture that includes technical assistance such as farm planning, crop marketing, and a peer community of changemakers as part of their approach. Many funds offer patient capital with terms of 5 to 10 years, and others a loan loss reserve to extend debt to those without sufficient collateral or other revenue. Creative financing structures also include revenue-based or royalty financing, alternative equity structures, subordinated debt, and recoverable grants.

Social, Relational and Ecological Returns

Social, relational and ecological returns are built into the purpose of the funds alongside targeted financial returns. These funds consider return in varied, multiple and holistic ways, including well-being as a target. This stands in contrast to funds where the emphasis is focused solely on the return on investment (ROI) or the profitability measure of financial gain or loss generated on an investment relative to the amount of money invested.

At Raven Indigenous Impact Fund, they seek a quadruple bottom line – fiscal, environmental, social and reconciliation. As Paul LaCerte describes their fund situated alongside the non-profit Fireweed Fellowship, “We are undoing hierarchy and replacing it with reciprocity. It is a form of a return.”  He centers relationship in their financial decolonization work. They argue that reparations in finance must include changing the finance system to become inclusive, that patient money with shared values will create safer, more resilient communities, ones in which everyone can be proud to be participate. Each fund has varied approaches to measuring its returns, some have adopted external quantitative metrics, others use internally qualitative data, and many use a mix of approaches.

Ownership and Governance

Many funds center their transformative work in rethinking ownership and governance, including questions around who owns the assets, who makes decisions about the assets, and how decision-making processes work. Funds can be set up as cooperatives and or be led by people within their communities. These are important shifts in finance.

The East Bay Permanent Real Estate Cooperative (EBPREC) a people of color led land and housing investment fund features a unique, non-extractive, multi-stakeholder, cooperative real estate model with 282 member-owners including: community owners, investor owners, resident owners and staff owners. Its framework is based on restorative economics.[2] Similarly at the NDN Fund, Nikki Love asserts the key role of decision making in their Indigenous-led and run fund, “our mission is to create paradigm shifts that allocate resources and give decision-making back to Indigenous Peoples.”

Financial Returns

All of the funds have a return profile that they articulate in their prospectus and terms and they range in structure and approach to include: financial returns of 1-8%, 100% recoverable grants, evergreen funds with limited exit opportunities, and a dividend return based on a revenue model. Importantly, they are all unique in their approach and bear consideration as they are tailored to the problem they are trying to solve. In this same light, some of the funds are open for funding now while others are currently closed with plans to open for funding in the next 6-18 months.

The Transformative 25 – Starting with 10

I am delighted to share the first 10 of 25 funds on the list. I learned about these funds through my work at the Swift Foundation and my RSF Integrated Capital Institute alumnae network. To be clear, this is not intended to be an exhaustive list. Instead, it is a starting point for people to discover a few of the many innovative efforts going on.

These fund managers are courageous in developing their ideas and approaches. They bring deep knowledge and relationships with the communities and entrepreneurs they serve. They work hard and challenge us to rethink our role in finance for social justice.

To make the list more comprehensive and diverse, I am opening up the nomination process until January 7, 2021 to funds and fund managers who think they meet the criteria to be included in the Transformative 25. The final list will be shared in late-January. Please fill out the survey here or contact me at for an interview.

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