It’s been a thrilling week for me.
On Tuesday, Taj James, founder of Full Spectrum Labs and Dr. Stephanie Gripne founder of Impact Finance Center invited me to join them for a proposal submission to the Catalytic Capital Consortium. What blew me away was both the invitation to collaborate with these pioneers, AND the excitement that big philanthropy is underwriting a body of research to feels vital to a livable future.
They start their solicitation by pointing to this article: “What Investors Need to Know to Embrace Catalytic Capital.”
To move forward, we must stop expecting investees and the communities they impact to always kowtow to established investor expectations. The contortions should instead become capital’s responsibility. It needs to support—not hamper—solutions that work, and investors should be the ones adjusting their behavior.

For the past month, I’ve been musing on a possible definition of “Cooperating Capital” or “Cooperative Capital” with a few colleagues who are in the process of starting a newsletter to cover the growing landscape of investors putting money into co-ops. We think we’re going to call the newsletter “Ownership Matters” because the central point is that we need a different stakeholder group — like workers, the environment, or the local community — to have much more power in decision-making than firms where the capital shareholder’s interests always reign supreme.
Cooperatives do this by design.
Cooperatives are owned and governed by their producers, customers, workers, or users (or a combination of multiple groups in multi-stakeholder co-ops). As a result, capital providers (and their interests) are always structurally subordinate to these other stakeholder interests. To me, if we have any chance at a livable future we need a massive shift to firms that structure their relationship with capital differently.
We see calls for this around democratic ownership, community ownership, locally-rooted enterprises. There are wonderful movements that have grown up around Community Development Finance, Slow Money, Social Capital Markets (SOCAP), Shareholder Activism, Faith-aligned investors and others. More recently we’ve had the field of “impact investing” grow to focus on the pro-active allocation of capital into enterprises and funds that achieve meaningful impact.
Of course there’s lots of debate and discussion about impact metrics, but groups and tools are emerging:
- Global Impact Investing Network’s Impact Reporting and Investment Standards (GIIN’s IRIS),
- TONICIC’s SDGs Investing Tool,
- SASB Standards,
- GIIRS (Developed by B-Corp),
- The IIRC (International Integrated Reporting Council)
The challenge with all of this is two fold.
- Push for Market Rate returns. Increasingly, there has been (and continues to be) the push for Market Rate return Impact Investments. This makes sense. Logically, if you can have the impact of curbing catastrophic climate change and making financial returns on par with other investments, you will do that. The challenge that this forgets is that our system that consistently puts capital’s interests above all others is the system that gets us into this dangerous place of creating an increasingly unlivable future (for humanity as a whole AND for those from whom we’re consistently extracting and exploiting). As a result, the debate over impact investors that focus on so-called “concessional” returns versus those who advocate for market rate impact investing is raging. Catalytic capital gives us an opportunity to see those calling for “market rate” impact investing as distinct group in this landscape.
- Additionality and Reciprocity. What I love about this SSIR Harvey Koh article and the work MacArthur foundation is doing is that it’s pushing us to see what wouldn’t have happened otherwise. The kind of impact investing that’s interesting to me is the kind that will create more reciprocal relationships between workers and the enterprises they work in. Reciprocity in how environmental interests and capital interests are structured. I want my investments to help create hundreds and thousands of enterprises that structure long-term sustainability for communities and ecosystems into how their governance and how decisions are made at every level. To achieve this, we need catalytic capital that creates something that wouldn’t have existed otherwise. If it’s not truly “additional” then it’s not catalytic in it’s impact. (This excites me because 10 years ago I spent 2-years focused on the question of “additionality” of carbon offset (a unit of Greenhouse gas emission reduction. That research led me to some thorny issues that I’m sure will emerge here as well, but the intention I believe is right.)

So, what is Catalytic Capital?
Catalytic capital—which the MacArthur Foundation and Tideline define as capital that accepts disproportionate risk or concessionary returns to generate positive impact and enable third-party investment that otherwise would not be possible—has been at the forefront of this push. In the case of an unproven fund, enterprise, or innovation, catalytic capital might be the investment that helps things get going, building a track record that can attract other investors to riskier opportunities in areas such as energy access. In a blended finance transaction, catalytic capital might mitigate risk through a guarantee, subordination, or first-loss investment. It has been a critical component of impact scaling efforts, such as community development financial institutions (CDFIs) in the United States and microfinance around the world.
~Harvey Koh, October 2020, Stanford Social Innovation Review
As I think about how to embody my values in my investing, this definition of catalytic capital offers a super helpful framework for thinking about where to allocate my portfolio.
I’m thrilled to see philanthropy dedicate some meaningful money to understanding this landscape better and help carve out a clearer path forward for the impact investors that are seeking bolder action to transform our economy from the extractive to the regenerative.

Redefining my portfolio expectations
I believe a livable future is bound up in hundreds of thousands of people re-setting their expectations around their investing. If we continue to allow conventional finance to dominate our thinking when we look at our retirement portfolios, our college savings, I think we our doomed.
I know conventional finance will continue to set our expectations at 8-10% consistent annualized returns.
For those of us that have walked with front-line communities that have experienced the extraction that these firms bring about, we have the visceral experience in our bones that tells us we can’t continue to allow that paradigm to win. We need Livable Future Investing. We need a new consciousness that helps us re-frame these questions.
We definitely need catalytic capital; and a cooperating economy! This is what we’ve been working on over the past decade too, especially how to build business ecosystems based on multistakeholder cooperatives that are not owned by anyone, instead stewarded by all. For more on what I’m up to, especially the toolkit we’ve published to build a better world:
– Take a look at the recording of my book launch for more: https://graham-boyd.biz/blog/launch-webinar-23-minute-edited-video-summary-of-what-rebuild-is-all-about-from-jack-and-graham/
– This short blog: https://graham-boyd.biz/blog/the-new-building-blocks-we-need-to-build-the-stakeholder-economy/
– Or join the discussion in the second launch event on 23 Feb: https://www.eventbrite.co.uk/e/book-launch-webinar-2-rebuild-the-economy-leadership-and-you-tickets-137237863143
This is incredible work. I’m excited to read it and learn more.