If recent global movements seeking racial equality have taught us anything it’s that our voice is more powerful when it is amplified. While it by no means guarantees a solution, it is clear that taking collective action achieves more than individual action. It’s a lesson that Jennifer Pryce has learned throughout her career and one that she applies on a daily basis as the president and CEO of Calvert Impact Capital. She is absolutely driven and committed to the idea of collaboration to help communities that are marginalised and overlooked.

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From her home in Washington DC, Jenn tells Invest for Good that fostering a healthy community is about “creating opportunities” so that people can live in a safe place, learn, grow and contribute. An impact investor with a mission to make the world more equitable and sustainable, Calvert Impact Capital gets money to those communities that most need it. While it may sound straightforward, those who need money the most are often the last to get it, if they get it at all. Why? The financial system is set up to work for a subset of the population that is already profiting from it, and those with fewer assets and capital are riskier propositions that are harder to reach.

Plumbing that doesn’t reach all 

The financial system is a bit like plumbing, Jenn argues. The pipework exists and can help some disadvantaged communities through the likes of microfinance, co-ops and community development financial institutions (CDFIs); but the infrastructure is not robust and can fail. She adds: “We have much more need in the population than the plumbing can reach, for the money to travel to and beyond.”

One of the ways Calvert Impact Capital tries to solve this problem is through its Community Investment Note. The non-profit investment firm pools the money of its 5500 noteholders and loans it out to a variety of organisations working to address social and environmental problems.  With over 100 countries represented, the reach is global and spans sectors such as affordable housing, education and sustainable agriculture. “The heartbeat of what we’re really trying to do is create access to finance for communities that are overlooked, that are left behind by traditional finance,” says Jenn. “They can’t walk into a bank and get a loan, but they’re totally financeable.” 

For a potential investor, the proposition is attractive: you can invest as little as $20 over one, three, five, 10 and 15 years. “The diversity of our investor community is extremely important - we’re committed to democratising the opportunity to invest, ensuring everyone has a voice and that we’re all in this together,” the CEO explains. So far, the firm has maintained a 100% repayment rate to investors of interest and principal when the note comes due, with the return varying on the maturity. Jenn believes that Calvert Impact Capital has become something of a “gateway product” for impact investors, with many then going on to educate themselves about the field and investing more widely. 

Support for small businesses 

Loaning money to organisations is one side of the equation, but Calvert Impact Capital also helps raise capital on behalf of others via its syndication services. One of its newer initiatives is the New York Forward Loan Fund, support for small businesses that have been affected by COVID-19. Calvert Impact Capital has acted as the lead arranger for the $100m fund in association with the Community Reinvestment Fund, LISC, and a group of CDFIs . The goal is to loan out the capital raised to businesses and nonprofits in New York that have fewer than 20 full-time employees and turnover of less than $3m per year. 

Jenn believes that the U.S. government’s recovery efforts haven’t been able to reach some of these very small businesses, again because it is using “existing plumbing” that’s not fit for purpose and doesn’t trickle down to local storefronts. Unlike most federal relief efforts in the U.S., the NYFLF is not “first-come, first-serve”, but will apply an equity lens to ensure capital goes to minority and women-owned businesses. The entrepreneurs have faced historic discrimination and often struggle to raise capital. 

The maximum loan size will be $100k, but this can be a lifeline to a business looking to reopen after being shuttered for weeks. “There’s a great need in our community,” the CEO observes, “and this facility meets that need, by working in collaboration with those who have the appropriate capital and the deep connections to the community.”

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Collaboration and community 

It’s no coincidence that Jenn believes deeply in collaboration and community. As a young woman, she travelled to Gabon to teach secondary school students English and maths. She lived in a rural village where there was no running water or electricity. There were daily challenges that were solved when people came together and contributed. “Coming from the U.S., I had a much more individualistic mindset, so the power of community coming together in this way was a new learning for me,” she admits. When she left to start working in finance, she took with her the power to be found in community bonds. But she also learned that capital equals power. 

There followed a career on Wall Street and a move to London to work in investment banking. There were a few “lightbulb” moments that led her to reassess her job in relation to her values. Dissatisfied, she took a risk and left. After a stint in Australia to train in yoga, she returned to the United States and took up a volunteer position with The Public Theater in New York City. It’s here that she truly understood the importance of translating between finance and community development. 

Despite critical success with the likes of Angels in America, the theatre was in financial peril and no one wanted to loan it money. “They didn’t own their building, it was a 99-year lease. They didn’t have a sustainable finance model, and I just lost it. I thought, ‘Here’s this amazing institution, this anchor in the East Village, and no one wants to get behind it.’”

This became a calling that took her to Washington DC, where she worked at a CDFI loaning money to local organisations that were in danger of losing the buildings they occupied when the community around them started to gentrify. When she reached the limit of what she felt she could accomplish with the tool of real estate lending, she moved to Calvert Impact Capital. That was a decade ago. 

Leadership that cares

Since then, she has made her mark by applying everything she’s learned about strengthening community ties and bringing about meaningful change. That includes weaving a gender lens through Calvert Impact Capital’s diversified portfolio of 100 companies. She admits that some companies do very well on gender, while others have a fair way to go. Their goal is not to create the perfect gender portfolio, but to drive further appreciation of gender’s role in investment within the industry.

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The firm works with those that need to further diversify their board or think more strategically about how they market their products and services. “We try to share what we know with the hope that more people see that just measuring and incorporating gender in their work is going to create a stronger business that’s sustainable over the long run.”

Calvert Impact Capital itself has a diverse team, with nearly 70% of it composed of women. About the same percentage have lived in different countries, including the Philippines, Zimbabwe and China. As a leader of this team, Jenn believes that you need to be both empathetic and driven by more than just the bottom line. “When you ask a leader, ‘how did you get to where you are?’, it becomes very clear if they’re doing the work because they care or not, and what they care about in how they go about their work. I think that’s telling.”

Impact investing needs to scale

It’s impossible to accuse the chief executive of not caring enough. Jenn spends much of her time thinking about how to scale impact investing so that it gets more money into the system. As a part-time lecturer at the University of Oxford, she wants the younger generation to think about doing more than just starting yet another impact fund. In her mind, another multimillion-dollar fund is “peanuts” in the grand scheme of things. She says the industry needs to scale and find people who have a different mindset. When she hires for her team, Jenn looks for people who are curious. “If we roll out the financial model of yesterday, it’s not going to fit in today’s reality and so staying curious and ensuring that you’re folding in today’s reality is important.”

One step in the wider adoption of responsible investing is having more transparency around what impact means. At Calvert Impact Capital, they always look to see what kind of outcomes their borrowers are having in the community. For instance, how many children were educated or how many new houses were built?

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But they also take into account how they are expanding the flow of capital to the underserved. To take up the plumbing analogy again, it’s about building better pipes that can reach further. Calvert Impact Capital also signed on to a set of principles that promote transparency and integrity in impact investing reporting. As more signatories get added, there is the ambition that participants will learn from each other. Asset managers, meanwhile, can use the principles to assure investors that impact is not being watered down. 

The ongoing power struggle

Yet Jenn recognises that impact investing is not the magical “silver bullet” that will solve all the world’s ills: “Sometimes we need to reach out to our friends in advocacy and get change before you can put a layer of finance on it.” She uses affordable housing as an example. It has been scaled quickly, but she believes there are policies actively impeding the creation of affordable housing. To have a deeper impact, legislation needs to change. 

Jenn would like to see an overhaul of the financial system that acknowledges some of it is broken and needs to change. One possibility she puts forward is an incentive for corporates to work in smaller markets that aren’t as financially lucrative, but which are working towards a common good. This might mean adopting new policies and legislation that require governments to provide a safety net of capital if it’s needed.

Another possibility is making big corporations more accountable, by law, for their transgressions. “The legal system has created an opportunity for corporates and wealth to build on itself, and now you get into a power struggle,” she observes. “The people in political power are reinforced by wealth, so the corruption and legal loopholes continue.” These are big challenges, but Jenn sees small signs of progress, whether it’s more awareness in the industry, or the drive to invest more assets in a responsible way. “Now, to me, it’s just a question of velocity and urgency.” 

There appears to be some urgency now, with the world feeling like it’s on a bit of a precipice. Will it tip in favour of more justice, equality and social change, or will the status quo continue? Based in Washington DC, the chief executive is only too aware of this ongoing struggle. The recent Black Lives Matter protests, for instance, have highlighted that finance is, and will only ever be, one part of the solution. “We can work as hard as we can to ensure that finance gets into the hands of black owners and black communities, but if there is unyielding racism, it’s still not going to add up to a whole,” Jenn tells Invest for Good. “You need policy and advocacy to complement the efforts.” 

Jennifer Pryce is the CEO and president of Calvert Impact Capital.