Open Mic: How Guarantees Serve as a Tool for Catalytic Capital
On April 25, 2022, the MIE community came together for an Open Mic to discuss unfunded guarantees, a flexible, innovative financial tool that can be used as catalytic capital to advance solutions that may otherwise be obstructed by risk concerns. While guarantees can benefit communities and markets that are underresourced, they can also draw attention to and catalyze additional investment in those communities and markets. Watch this explainer video by Kresge Foundation for an overview of guarantees, and scroll down for a summary and recording of the Open Mic.
The primary questions addressed during the Open Mic included:
- What are unfunded guarantees and how can they be used by impact investors as a tool for catalytic capital?
- How can foundations add guarantees to the capital stack alongside grants and other resources needed by underinvested entrepreneurs and geographies?
- How can foundations catalyze other types of investors into a blended capital solution that advances racial and gender equity?
The Open Mic also dove into the the Community Investment Guarantee Pool’s (CIGP) model, exploring how and why it works. Conversation leads shared the unique aspects of CIGP’s model for raising, issuing and managing guarantees (shared risk, diverse mix of guarantors, etc.) and how equity is centered as part of the process. Through the example of Business Impact Northwest, the Open Mic also explored how CIGP’s current portfolio of guarantees are working with community finance intermediaries to help address the wealth gap for BIPOC and women business owners.
- Jim Baek, Executive Director, Community Investment Guarantee Pool
- Kris Hermanns, Chief Impact Officer, Seattle Foundation
- Joe Sky-Tucker, President and CEO, Business Impact Northwest
- Sarah Stremlau, President, LOCUS Impact Investing
- Jane Reisman, Ph. D., Founder and Senior Advisor, ORS Impact (Facilitator)
MIE members, log in to view a recording of this Open Mic. If you have questions or challenges accessing the recording, please contact Zineb Touzani at [email protected].