Boston Impact Initiative lays out agenda for action to unleash power of diverse-led, community-based impact investment funds

New report highlights challenges and successes of pioneering fund managers, shows how philanthropy, impact finance leaders and others can contribute

BOSTON – The Boston Impact Initiative (BII), a nonprofit impact investment fund dedicated to advancing racial and economic justice, today released its highly anticipated report, Fearlessly Funding Racial and Economic Justice. The report uncovers the challenges faced by diverse, community-based impact fund managers and proposes actionable solutions to catalyze systemic change in the impact investing ecosystem.

Through its Integrated Capital Fund Manager Cohort Education Program, launched in 2020, BII has worked closely with 69 fund managers from 38 organizations, equipping them with the tools and knowledge to design and manage funds that address the racial wealth gap. On a webinar today, BII is releasing the report that distills insights from 17 of these fund managers and translates them into an agenda for action.

Key Challenges Facing Diverse, Community-Based Impact Fund Managers:

1. Access to Capital: Prolonged fundraising timelines and limited access to catalytic capital leave fund managers struggling to secure resources for operations and investments.
2. Operational Capacity: Fund managers often lack the infrastructure for back-office operations, legal support, and impact data collection, leading to inefficiencies and burnout.
3. Network Gaps: Despite deep community connections, fund managers face barriers to building relationships with institutional investors, philanthropic organizations, and peer networks.

These challenges highlight the urgency of reimagining wraparound support systems for fund managers to ensure their success as drivers of community-led economic justice.

“Our research reveals not just the potential of community-based investing, but the urgent necessity of fully empowering fund managers as catalysts of economic justice,” said Y. Elaine Rasmussen, CEO and founder of Social Impact Now and ConnectUp! Institute, the lead researcher on the report and a past participant of BII’s Integrated Capital Fund Manager Cohort Education Program. “By providing targeted support, we can transform strategic insights into tangible opportunities that uplift communities and create sustainable economic pathways.”

To address these challenges and unlock the transformative power of community-based funds, the report calls for coordinated action across the impact investing ecosystem. Patrice Green, the Vice President of Programs at Surdna Foundation, echoed the importance of this approach: “BII’s report provides funders and investors with a clear pathway to support this dynamic and growing ecosystem of fund managers dedicated to building a more inclusive, equitable, and impactful economy.”

Actionable Recommendations for Stakeholders Include:

• Philanthropy: Provide unrestricted operating and technical assistance grants to alleviate operational burdens faced by emerging managers raising small funds.
• Impact Investors: Develop blended capital vehicles with flexible terms and revamp due diligence processes to better align with community-centered approaches.
• Policymakers: Expand tax incentives for investors, reduce regulatory barriers, and mandate diverse fund manager inclusion in institutional portfolios.
• Media: Amplify the voices and success stories of diverse-led funds to elevate their visibility and attract greater investment.

“Emerging impact fund managers are ready to deploy hundreds of millions in capital to build lasting wealth in communities of color – they just need the right infrastructure and support to succeed,” said Betty Francisco, CEO of BII and a lead author of the report. “We’ve laid out a clear roadmap for how to help these pioneering funds move regenerative capital at scale. It is time to invest fearlessly to create a more just and inclusive economy.”

“This report – and, more importantly, the work that BII is doing to build the field of integrated capital to bring about economic justice – is critical,” said Benjamin Vann, CEO and founder of Impact Ventures, one of the fund managers profiled in the report. “The challenges and opportunities presented in the report will shape the economy that future generations will inherit tomorrow.”

“We are at a critical moment in reimagining lending and investing,” said Vanessa Roanhorse, CEO of Roanhorse Consulting, whose insights informed the report. “We  launched the Moonsoon Fund and Rematriating Economies Apprenticeship program to elevate indigenous women in investing. We must center place, people, culture, and a more dynamic understanding of risk. This is not just an opportunity but a necessity for generational change, and the time to act is now. Long-term partnerships with funders and investors are essential to driving this transformation.”

BII invites philanthropists, investors, and policymakers to join the movement to transform finance to make racial and economic justice central to impact investment strategies. The Fearlessly Funding Racial and Economic Justice report serves as both a call to action and a resource for those looking to support these pioneering fund managers.

Launch webinar

During a launch webinar on December 18, 2024, BII Impact Director Aliana Piñeiro presented the report recommendations, and BII CEO Betty Francisco moderated a Fireside Chat with Benjamin Vann, CEO of Impact Ventures, and Justine Correa, Fund Building Specialist, Roanhorse Consulting.