There have been many attempts to bring private and public finance together to fund social programs. Many have been unsuccessful (cf. “social impact bonds”). A first-time fund from Indigenous-led Raven Group in Canada has a fresh take on the “pay for success” model.
Raven’s Indigenous Outcomes Fund this week reached a $32.2 million second close toward a $50 million goal to fund roughly a dozen green and community health-focused projects requested and designed by Canada’s First Nations and Native tribes in the US.
Raven has three projects underway, with six more set to start this year.
“Investors are asking us to scale larger than this fund,” Raven’s Jeff Cyr told ImpactAlpha. “If you want to have your money make systemic change, funds that will do that for you are really hard to find.”
Paid for success
Raven is working to channel public funding to issues that Indigenous communities want to address. It works with community leaders to design projects for, say, rooftop solar installations, or diabetes clinics that align with community culture and traditional diets. It then approaches public agencies to secure purchase agreements for the projects’ results.
Raven fronts the capital, verifies the outcomes, and gets reimbursed by the government payers, with a small upside for Raven and its investors.
Indigenous communities “are looking for capital to show up differently,” said Cyr. “They’re interested in the outcomes-driven approach where we co-design what we want to accomplish and reflect their values, their knowledge systems, their governance.”
Green energy, green jobs
Raven will invest 75% of its capital in Canada and 25% in the US. Every project in its pipeline has a green angle. Its latest project will fund geothermal retrofits for 100 homes for the Brokenhead Ojibway Nation in Manitoba. Canada Mortgage and Housing Corp. and Efficiency Manitoba have signed on as the government payors.
Raven is helping the nation set up a community-owned business and train local workers to do retrofits for other nations.
“Indigenous energy sovereignty is a very big deal,” said Cyr. “Communities want to build resilience. We’re helping them build an energy company. It’s jobs, it’s economic development.”
US for Canada
The only other outcomes-based investment fund in North America is Maycomb Capital in New York, which provides working capital for early childhood development, workforce development and health equity interventions.
Raven’s newest LPs include Quebec-based Cap Finance, California-based Natural Investments and New York-based Trimtab Impact.
Said Cyr, “I’m excited by the willingness of the American investment community to recognize the role that something like this can play in society and invest in a fund that is 75% Canadian.”