When a Foundation invests its endowment in alignment with its core mission, it compounds its grantmaking impact, driving towards transformational social change. The Skoll Foundation in partnership with our investment manager, the Capricorn Investment Group, has always leveraged its endowment with an impact investing lens, with a major focus on climate. We are now adding to that focus area by also looking to use endowment dollars to advance both economic inclusion and racial justice.
To that end, we are taking a targeted and deliberate approach to use some of our endowment dollars to invest in new asset classes, underrepresented fund managers, and in support of first-time fund formation. These shifts are consistent with our mission and align our dollars in ways consistent with our refined strategy.
As part of this integrated approach, the Skoll Foundation has invested in two funds aimed at closing the racial wealth gap and spurring economic mobility in underserved communities: Apis & Heritage Capital Partners’ Legacy Fund I, designed to increase business equity ownership for large workforces of color, and Zeal Capital Partners’ Fund, designed to narrow wealth and skills gaps through tech-enabled solutions.
Leveraging the power of entrepreneurship and innovation, the Skoll Foundation and Capricorn Investment Group have strived for total portfolio activation to fund solutions to the world’s biggest problems while earning exceptional returns.
A&H’s Legacy Fund intends to invest into closely held businesses with large workforces of color and transition them into 100 percent employee-owned enterprises with its “employee-led buyout” (ELBO) model. The ELBO model has potential to generate significant increases in wealth for workers and attractive returns for investors. The fund intends to buy at least eight small and medium-sized companies from retiring founders, converting at least 500 workers over the next five years into employee/owners.
In America today, 60 percent of Black and 65 percent of Latinx workers have $0 in retirement assets making workers vulnerable to financial insecurity as they age and without resources to pass on to the next generation. A&H expects an average worker who benefits from an A&H-assisted buyout to accrue retirement savings of $70,000 – $120,000 each, which can be life-changing.
“We are looking to make life-changing investments with this first fund to address the significant and growing wealth gap in this country, especially for Black and brown workers,” said Todd Leverette, Co-founding Principal at A&H.
“There are two traditional paths to build wealth in America – you can own your home, or you can own your business,” said Philip Reeves, Co-Founder at A&H. “A&H is focused on the latter, especially for workforces of color, which have been shut out of equity ownership for so long.” (read more here)
Zeal’s Fund I seeks to invest in financial technology and future of work companies in the U.S. with innovative, tech-enabled solutions that address the wealth and skills gap. The fund looks to invest in up to two dozen businesses in the next four years – proactively targeting diverse management teams reimagining the building blocks of wealth – from education to employment and financial health.
“There has been significant underinvestment in postsecondary education, workforce, and financial services, and as a result, wealth disparities have risen—leaving many Americans behind,” said Naisir Qadree, Founder of Zeal. “We have an opportunity to accelerate innovative, early-stage projects so that they can both reduce these disparities and drive high returns.” (read more here)
Zeal is pioneering the concept of Inclusive Investing, which allows the firm to cast a wide yet targeted net when sourcing companies that position them to reap outsized returns.
These investments build on the many years of partnership with the Capricorn Investment Group, which was founded in 2004 and has grown to become one of the largest mission-aligned investment firms in the world. Capricorn, a B corporation, currently manages $8 billion in multi-asset class portfolios on behalf of the Skoll Foundation’s founder Jeff Skoll, the portfolio of organizations in the Jeff Skoll Group, and other like-minded investors. Capricorn has shown extraordinary investment results by leveraging market forces to scale solutions to global problems.
Capricorn and the Skoll Foundation have previously collaborated on mission-aligned investments across the endowment with a particular focus on climate change and environmental sustainability, including our investment in the market-driven water and climate solutions approach of WaterEquity. We are also members of the Ceres Investor Network and its Net Zero Investor Initiative. Building upon a historical partnership, Capricorn and the Skoll Foundation are well placed to identify investment opportunities that advance two of the Foundation’s newer strategic priorities: racial justice and equity, and inclusive economic growth.
Together with Capricorn, the Skoll Foundation plans to do much more in the coming months and years to further leverage its mission-aligned investing to support innovative solutions that have the potential to create a more peaceful, prosperous, and sustainable world for all. The A&H and Zeal investments are indicative of our efforts to use our endowment and shift capital to create more avenues for economic inclusion.
Funds and wealth building vehicles like Zeal and A&H are ripe for mission-driven investments from Foundation endowments and we’re calling on other asset managers to join this movement. I’m hopeful that within five years, we’ll begin to see the philanthropic sector thinking about its endowments and entire balance sheets in a fundamentally different way—to see those assets as levers to amplify ambitious social change.
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