Living Cities manages two structured debt funds: the Catalyst Fund which is a $38 million domestic structured debt fund that closed in 2008 and is fully deployed, and the Blended Catalyst Fund (BCF), which blends grant dollars, philanthropic and commercial debt, is capitalized at $37 million and is currently in deployment.
In 2015, leveraging Living Cities’ lessons on using grant dollars and philanthropic debt for accelerating to reduce economic inequalities that disproportionately impact people of color, and channeling investments to scale promising policy interventions in social services, health care, housing and education BCF, Living Cities’ second impact investment fund, was launched.
In addition to blending grant dollars, philanthropic and commercial debt, BCF has incorporated the organization’s most critical learning of its recent history about investing to improve the economic lives of low-income people: Poverty and racism are inextricably linked. Investing in economic justice means investing in racial justice. That is why, in 2018, the Blended Catalyst Fund shifted its impact focus from improving the economic security of low-income people by driving innovation and financial leverage to closing racial wealth gaps by supporting the creation of income and wealth for people of color in U.S. cities.
As BCF continues to close investments that align with our evolved impact strategy, and we deepen our research on the root causes of the country’s racial disparities, questions on who is in the position of making investment decisions, what capital structures are put in place and to whose benefit drive our Capital for the New Majority exploration into the future.
To better address the root causes of today’s racial disparities and achieve better outcomes for all people living in U.S. cities, we use capital as a key driver of transformation and an important tool for changing the way that systems work. Capital innovation work at Living Cities seeks to do three things:
Partner with cities and local partners to align private capital with public and philanthropic resources through a set of tools to help communities assess their capital absorption capacity;
Create pools of flexible capital and innovative financial vehicles including the Catalyst family of funds, to test new approaches and create proof points for others in the field to adopt;
Leverage our relationships, including the Builders and Benefactors network to promote the development of a robust community of practice that channels capital into the hands of founders and fund managers of color.
As we continue to develop, implement, and test new strategies, we will share our learning and exchange ideas with partners in the field.