CapCon’s long association with the Global Social Benefit Institute (GSBI®) Accelerator inspires a new partnership for CapCon.
Like many businesses worldwide, some of the social enterprises which have been through the Miller Center’s GSBI Accelerator program were faced with overwhelming challenges at the onset of the current global health & economic crisis. It became increasingly clear that some of these organizations were at risk of shutting down, in spite of the fact that they were thriving & growing before the crisis emerged. GSBI officials were rightly concerned that too much good work and worthwhile investment in these social enterprises would become casualties of a pandemic for which they could not possibly have prepared.
Enter the Truss Fund, an organization equipped to do exactly what was needed. The Truss Fund was the result of a partnership between Miller Center Advisory Board Chairman Jeff Miller and Beneficial Returns, an impact investment firm. Created expressly in partnership with GSBI to address the Covid19 crisis, the Truss Fund provides emergency loans of up to $100,000 to social enterprises that are employing market-driven solutions to end global poverty and protect the planet. The Fund is designed especially for enterprises that are graduates of the GSBI Accelerator, some of which have been very hard-hit by the COVID-19 virus. The Truss fund is in a position to bring the necessary infrastructure to evaluate applications and process loans, and to do it quickly without generating unnecessary risk. This lending vehicle also provided a straightforward way for organizations like CapCon to help with the crisis by providing capital to fund the loans.
A great example of the emerging crisis is GSBI Accelerator graduate LRTT, which is one of the Truss Fund’s first borrowers. LRTT improves learning outcomes by connecting low-resource teachers in poor communities in Asia, Africa, and the Caribbean, with high-resource teachers primarily from the UK, US, and Australia in a mutually empowering teacher development program. Referred to as LRTT Fellows, high-resource teachers spend their summers to co-facilitate the programs on-location in the poor communities. LRTT’s main source of revenue is fees paid by high resource teachers who are willing to pay for the opportunity to participate in summer programs. But due to widespread school closures in the face of Covid19, LRTT’s revenue was essentially reduced to zero.
The Truss Fund was able to step in and expertly evaluate LRTT’s situation in order to determine whether they were a good candidate for an emergency loan. The Truss fund has a deeply experienced team with decades of experience in financial services, and a core expertise in finance for social enterprises. This includes the ability to evaluate organizations as candidates for loans as well as grants and impact investments, thus minimizing risk for lenders, investors, and grant makers. With these resources, the Truss Fund can make quick and highly informed lending decisions.
The takeaway for CapCon is that through partnership with the Truss fund, they are able to trust that capital is directed where it is needed most, and allocated quickly where speed is of the utmost importance. “This is a critically needed source of financial relief for social enterprises that are doing outstanding work to fight poverty”, said Luitjens. “Most of these organizations are operating with the bare minimum of resources. They just don’t have the reserves to fight through a crisis of this magnitude. Wherever possible, we want to help them through it, because it would be a terrible loss if they did not survive”.
With the Truss fund providing the lending expertise, and a pool of organizations like CapCon providing capital, GSBI has an effective tool to address the emerging financial crisis that is affecting GSBI Accelerator Graduates.