Unlocking Finance

Finance Overview

The world has many solutions to help transform the energy, food, and health systems—but only additional capital can provide the access and scale necessary. In 2023, the Foundation’s Finance team worked to close the global climate financing gap—which stands annually at $3.5 trillion—by working to tap private and public sources while also seeking to ensure that important legislative action helps families and communities adapt and prosper.

Lessons Learned

As we seek to scale capital needed to advance opportunity and slow the climate crisis, the Foundation will leverage lessons learned over the last year: impact diligence is as critical as financial viability, the long term view is needed, implementers and advocates must work together, sector and focus matter, and a solution doesn’t have to be novel to be transformational.

Unlocking U.S. Climate Funding

The Inflation Reduction Act, which provides a dramatic increase in federal funding in the United States, is historic legislation that will help many of our partners expand work within communities that are already suffering the most due to climate change. Through the Invest in Our Future (IOF) platform, we are helping our partners leverage this funding along with other philanthropic investments.

Our grantee partners provided technical assistance to introduce clean energy in more than 300 communities, resulting in 60 funded projects. These partners also leveraged grant support to secure an additional $14.5 million in philanthropic investment, and unlocked more than $30M in federal funding beyond the IRA. Our grantees are advocating for change in policy so that everyone can access clean energy; for example, a new law in Minnesota requires state utilities to use 100% clean energy by 2040 with provisions to streamline permitting, set minimum wage standards and prevent waste incineration plants in communities from counting towards targets.

Featured Impact Stories

Making Solar Make Sense

Anya Schoolman’s oldest son was 12 years old when he urged his mom to go solar. She said, let’s bring in our neighbors and do it together, what would become Solar United Neighbors (SUN) and now one of the most experienced groups serving low-income single families.

Working Power is developing more than 50 projects with 16 organizations in six states. Once completed, these projects will provide a carbon offset equal to planting and maintaining 520,000 trees for ten years, and generate $92 million in community benefits.

Read the Grantee Impact Story

A woman and baby receive family EITC tax benefits.

Making U.S. Tax Policy More Just

The U.S. tax code fundamentally shapes economic outcomes and mobility across all tiers of American society. The Foundation is collaborating to inform policies that will help American workers achieve economic stability, as well as improve how they navigate and access the tax system. For example, the U.S. Pro-Working Families Tax Policy Initiative supports organizations and collaborations to build the public demand, expertise, and capabilities to effectively leverage fiscal policy to reduce economic in equality in the U.S. This portfolio has also generated adjacent climate benefits by working on implementation of the Inflation Reduction Act, which is using the tax code to steer U.S. climate policy. Additionally, Code for America through GetYourRefund.org and GetCTC.org, helped more than 4M households navigate their tax situations, including helping more than 167k file and claim the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), and Economic Impact Payments (EIP).

From 2021 to 2023, we also worked with coalitions across the political spectrum to advance the benefits to families and workers resulting from tax policies. The work helped fill gaps in the national tax policy ecosystem by using flexible funding to support organizations and projects pushing specific solutions, including the Emerging Voices Pooled Fund at Public Private Strategies, Fair Share for America, and Better Taxes for a Better America.

The Economic Opportunity Coalition

The Economic Opportunity Coalition (EOC) is designed to accelerate opportunity to create wealth in low income underserved communities across the United States. This initiative—housed within The Rockefeller Foundation Catalytic Capital—strengthens Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) so that underserved people can access capital for business opportunity. To date, the initiative has secured more than $1.3B in new deposit commitments for CDFIs and MDIs.

$1+ billion
in new deposit commitments for CDFIs and MDIs
$40billion
mobilized for IMF Resilience and Sustainability Trust

$100billion
total Special Drawing Rights reallocation commitments
$50billion
additional World Bank lending unlocked through Capital Adequacy Framework reforms

Zero Gap Fund

The Foundation’s Innovative Finance portfolio aims to find new ways to mobilize private capital for public good in the U.S. and globally. For example, its Zero Gap Fund deploys flexible, patient, and risk-tolerant capital to catalyze private investment into strategies that address the UN Sustainable Development Goals. This impact investing is done in collaboration with the John D. and Catherine T. MacArthur Foundation and its Catalytic Capital Consortium. Through this fund, we provide catalytic capital to demonstrate new products; in parallel, the Innovative Finance team identifies grant opportunities to build a pipeline for future investment and strategic field building.

a lush, green forest with tall trees lines a narrow dirt trail that leads into the distance

One example of this is Blue Forest, a conservation finance organization bringing together communities, finance, and science for high-impact forest restoration and wildfire risk reduction in the Western US. The work, initially seeded by a Foundation grant, is financed through a unique financing mechanism known as a Forest Resilience Bond. In connection with its first Forest Resilience Bond, Blue Forest has returned all investor capital in line with expectations and restored and protected over 8,000 acres of forest and more than 27,000 acre-feet of water supply, and avoided over 27K megatons of wildfire carbon emissions across multiple Western States. More information on this and our other investments focused on climate is available in the most recent portfolio report.

Report
Zero Gap Fund: State of the Portfolio 2023
The Zero Gap Fund (ZGF), in its fifth year, has committed $30 million across 12 investments, mobilizing $1.04 billion from partners to address global challenges in climate change, regenerative agriculture, financial inclusion, and essential services access.
Download PDF

five individuals stand behind podiums on a stage during the

National leaders speak at the Summit on a New Global Financing Pact, which gathered participants from over 100 countries to tackle global financial inequities and mobilize resources for developing countries facing climate change, debt, and poverty.

Capital Adequacy Frameworks

Recovery work is focused on building a global financial architecture that can mobilize substantially more, and better quality, financing to support development and climate solutions for countries around the world. Within that portfolio, we helped develop the Bridgetown Initiative—led by Barbados Prime Minister Mia Mottley—which is advancing reforms to provide capital and fiscal space to developing countries.

One key element of the Bridgetown Initiative is the reforms to the capital adequacy frameworks (CAF) of the World Bank and other multilateral development banks (MDBs) – which are aimed at changing risk management to dramatically increase the amount of lending at these banks. This work, which grew out of a G20 independent experts panel supported by RF, has been advanced by collaborative RF advocacy and coalition-building efforts.

In the spring, the World Bank expanded its lending capacity by $40 billion and, in the fall, the Asian Development Bank unlocked another $100 billion in new lending – both through implementation of CAF reforms. There is still much implementation to do, but the coalition of like-minded governments that RF helped build around the Bridgetown Initiative continues to advocate for these CAF and other innovative finance reforms for MDBs.

On Reflection

Lessons Learned from our Finance Work

As we seek to scale capital needed to advance opportunity and slow the climate crisis, the Foundation will leverage lessons learned over the last year, including:

Impact diligence is as critical as financial viability. In impact investing, we often see the impact challenge described in detail. Yet it is essential that the implementation of the investment approach be well analyzed from both financial and impact generation angles.

Long term view needed. Even when investment strategies are gaining traction, it can take time to build the necessary track record and performance data for a unique product. Our learnings from the Zero Gap Fund have shown that even with some of our more innovative structures, we may need to wait several years to see whether the market is responding favorably to these new strategies and structures or not.

Implementers and advocates must work together. Coalitions made of implementation partners and advocacy organizations create positive feedback loops that deliver inclusive impact.

Sector and focus matter. The climate finance opportunity set is quite expansive. In order to leverage the Foundation’s unique resources for high impact and effectiveness, it is important to focus on specific impact themes and markets where the Foundation can add value and leverage Foundation expertise.

A solution doesn’t have to be novel to be transformational. Instead, it needs to focus on a specific need and be accessible and understood to deliver impact—like the extension of the Earned Income Tax Credit and Child Tax Credit in support of low wage workers.

Download the Finance chapter or our full impact report now.

Download the Finance chapter

download the full 2023 Impact Report

Jump to Other Chapters

CH.01

Energy

Speeding the Energy Transition

We’re assisting energy-poor countries grow through a mass deployment of renewable energy sources and a transition away from fossil fuels.

CH.02

Good Food

Scaling Good Food

We’re working to promote food systems that bring nutrient-rich and regeneratively grown food to vulnerable populations.

CH.03

Health

Advancing Health Solutions

We wrapped up some of our biggest pandemic-related initiatives and turned to disease surveillance during a year of discovery and rededication.

ReportOV

Overview

Impact Report 2023

This report chronicles The Rockefeller Foundation’s journey in 2023 to reimagine our work and learn from past successes and shortcomings, all with the goal of improving the lives of the world’s most vulnerable and underserved populations.