Interim Evaluation of Catalytic Capital Consortium (C3) Initiative

Background

Catalytic capital is debt, equity, or guarantees that accept disproportionate risk and/or concessionary returns compared to conventional investments to generate substantial positive social and environmental impacts or enable third-party investment that would not otherwise be possible.

In 2019, MacArthur launched the Catalytic Capital Consortium (C3) as an investment, learning, and market development initiative. The C3 initiative aims to increase the knowledge, awareness, and use of this form of investment, helping to fuel innovative solutions; advance inclusive markets; and seed, scale, and sustain impact-driven funds, enterprises, and fields.

Through both grantmaking and field partnership investments, C3 seeks to demonstrate the power of catalytic capital as synergistic with other forms of investing across the full continuum of capital (including investments with commercial rates of return) to safeguard the environment, support those most in need, and ultimately to help achieve the UN Sustainable Development Goals (SDGs).

The C3 Strategic Partners—The Rockefeller Foundation, the Omidyar Network, and MacArthur — jointly funded $10 million in grantmaking work. MacArthur has financed more than $123 million in C3-related investments.

What We Evaluated

New Philanthropy Capital (NPC) is the evaluation and learning partner for C3. This is NPC’s first evaluation report of the C3 initiative and covers the period between the inception of C3 (2018-2019) until the end of August 2023.

This first evaluation report is an interim synthesis, with most of the initiative’s workstreams either in progress or in the early stages of their development. The evaluation includes a brief summary of the C3 conceptual framework; key findings to date about progress; a brief discussion of factors that have promoted progress, limitations, and challenges; and opportunities for the remainder of the C3 initiative.

Separately, MacArthur Staff has prepared an Impact Measurement and Management (IMM) report, which assesses progress toward the financial, impact, and catalytic capital goals of the C3 Field Partnership investments. The IMM report will be released in 2025.

What We Learned

Key findings from the evaluation include:

• The C3 initiative has contributed to increased awareness and understanding within impact investing of the potential role for catalytic capital to bring about positive social and environmental outcomes. This is reflected in a significant increase in the use of terminology related to catalytic capital in the news and social media.
• While catalytic capital remains an under-researched topic, the initiative also has directly contributed to evidence about catalytic capital through 14 research reports commissioned to build an evidence base to inform practitioners.
• There is not clear evidence that attitudes towards catalytic capital are generally becoming more favorable, but there is support from some in the field and indications of increasing openness to catalytic capital among ultra-high-net-worth individuals and family offices.
• Some impact investors have embraced the framing of catalytic capital to describe their approach.
• Some impact investors believe it is easier to access the skills and capabilities to deploy catalytic capital than it was several years ago. The C3 initiative is contributing to the development of skills and capabilities though the impact of C3 activities on practitioner skill levels has not been tracked yet.
• There is anecdotal evidence of increased interest in catalytic capital as new initiatives have come online since 2018. It is difficult to say how much C3 contributed to the development of these new initiatives as there are challenges to establishing a clear baseline.
• The C3 initiative continues through the term of the catalytic capital investments made by MacArthur, and C3 grantmaking activities have been extended through 2027 to promote the intended outcomes. We expect to have a clearer picture of the impact of C3 at this point.

View the full report 

Supporting Documents

View the Executive Summary 

MacArthur’s evaluation philosophy