A consultation launched by the European Venture Philanthropy Association (EVPA) aims to raise awareness about catalytic capital and its deployment to accelerate impact.
The European Venture Philanthropy Association (EVPA) has launched a consultation to gauge the existing awareness and deployment of catalytic capital beyond their community of practitioners.
The EVPA wants to hear from diverse voices including “professionals interested in financing solutions, experts, SDGs-passionate individuals and opinionated observers alike”.
The consultation is open until mid-April and can be accessed here.
Catalytic capital is defined by the the Catalytic Capital Consortium (C3) as financing that “accepts disproportionate risk and/or concessionary return to generate positive impact and enable third-party investment that otherwise would not be possible.”
EVPA asked 41 practitioners from 32 European organisations investing globally what catalytic capital means to them, why is it important, and what are the main barriers to its adoption. Below, some of the main findings:
- Impact starts with catalytic capital: organisations that develop social and environmental solutions need time to generate data for proving their concept and refining their activities.
- Catalytic capital is additional: catalytic capital aims at achieving impact that would not have been achieved otherwise or, in other words, that is additional.
- Who gets the returns? To date, there are many impact investors willing to collect the fruits, but too few planting the seeds. Catalytic capital providers are those impact investors that tend to accept that follow-on investors will benefit from their ability to de-risk investments and generate track records.
- Collaboration must increase in developing countries: although development finance institutions (DFIs) are crucial to develop and scale impactful solutions in the Global South, few of them have the possibility to deploy catalytic capital. Other catalytic capital providers must grow their strategic partnerships with DFIs and foster knowledge sharing and mutual learning.
EVPA is now seeking feedback from different voices outside its community of practitioners – you can share your views on catalytic capital and its deployment here.