Report

Zero Gap Fund: State of the Portfolio 2021

Driving impact at scale

Today’s global environment presents a complex array of challenges. The impacts of Covid-19, war in Ukraine, climate change, and, recently, economic volatility only add to the task of achieving the Sustainable Development Goals (SDGs). Yet, doubling down on the SDGs also presents one of the most powerful drivers for enabling more inclusive global growth and bolstering long-term investment prospects. Global divergence is accelerating – the OECD estimates that the annual financing gap for achieving the SDGs now exceeds $3.7 trillion, up from $2.5 trillion in 2019 – reversing this trend will be essential to a robust and sustainable world outlook in the 21st century.

There has never been a more crucial time for the Zero Gap Fund (ZGF or the Fund) and investment vehicles like it. Launched in partnership with the John D. and Catherine T. MacArthur Foundation and its flagship Catalytic Capital Consortium (C3), the Fund deploys patient, risk-tolerant, flexible capital to support innovative investment products and mechanisms marrying deep impact with the potential for replication and growth. The Fund continues to pioneer new investment solutions that channel critical financing to impact-driven investments at scale and unlock nascent market opportunities largely ignored by investors. The resilience and ongoing impact of many of the Fund’s investments, not only in 2021 but through the shocks of the first half of 2022, have proven the value of the Fund’s focused selection process.

In this environment, we find ourselves inspired by the grit and creativity of our portfolio companies to break paths and to achieve impact. This report walks through many of the Fund’s specific
investments and the combination of social and environmental impact each has managed to generate. In 2021, the Fund added two new investments to the portfolio: Founders First Capital Partners and Apis & Heritage’s Legacy Fund I. Founders First aims to enhance the bank-ability and access to capital for minority-led businesses with revenue-based financing. Apis & Heritage seeks to finance the conversion of companies with substantial workforces of color into 100 percent employee-owned businesses in an effort to spread the benefits of business ownership and capital appreciation more broadly in the United States.

A growing cadre of institutional investors is recognizing the value and necessity of coupling financial performance with strong social and environmental outcomes. The ZGF team fielded a record number of inquiries from major global banks, asset mangers, and other investors about our impact investing approach, many of whom established impact-linked initiatives with thematic interest in climate and financial products to address diversity, equity, and inclusion.

As global events evolve rapidly, the ZGF team is convinced that we must find more financing mechanisms that will advance the SDGs and achieve a more equitable, prosperous global future. This impact report captures the crucial role catalytic capital plays in reaching this goal


Maria Kozloski
Senior Vice President, Innovative Finance
The Rockefeller Foundation

  • Report

    Zero Gap Fund: State of the Portfolio 2021

    Today’s global environment presents a complex array of challenges. The impacts of Covid-19, war in Ukraine, climate change, and, recently, economic volatility only add to the task of achieving the Sustainable Development Goals (SDGs). Yet, doubling down on the SDGs also presents one of the most powerful drivers for enabling more inclusive global growth and […]
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