The applicant explicitly articulates that they seek returns of a social, relational and /or ecological nature. These returns are a key purpose alongside a targeted financial return and would not be successful without them. They consider return in varied, multiple, and holistic ways, including collective-well-being as articulated by Seacoast Trust through their value of: “balanced economic, social and environmental well-being.”

• Social returns may include, serving the unbanked or underbanked with financial services, creating quality jobs, improving well-being or self-worth of borrowers. 
• Relational returns may include, increasing community cohesion, provision of essential or culturally relevant services, or creating a sense of pride/belonging. 
• Ecological returns may include, access to renewable energy, increased biodiversity, use of regenerative / agroecological practices, or improved climate resilience.

The T25 does not have a financial return target. We observe that strong funds, banks and initiatives usually have an explicit financial return goal. It may be at 2X, 2%, 0% or 80% capital preservation (-20%). 

T25 Examples

• Navajo Power – Creating jobs, reducing GHG, clean energy for Indigenous communities
• Denkyem Coop – Businesses centering black ownership & leadership

The applicant explicitly models participatory alternative and democratized approaches to ownership and governance under the extractive financial system by shifting who owns the assets, who makes decisions about the assets, and how decision-making processes work. This could include shifting assets to community members or groups through worker cooperatives, community trusts, community ownership models, employee stock ownership plan, or social purpose trusts (see p. 21 of Transform Finance’s report on Alternative Ownership Enterprises). Also, the engagement of community or other non-traditional ownership structures is included in the investing process. E.g., Reciprocity Fund has an all-Indigenous Credit Committee and Kachwa Fund is set up as an investor cooperative. We include both funds that have participatory ownership and governance, and funds that are investing in organizations that have participatory ownership and governance to fit this criteria.

T25 Examples

• Kensington Corridor Trust – community trust ownership of real estate
• Cooperative Fund of the Northeast – funds worker cooperatives

RSF Social Finance defined integrated capital as the “coordinated use of different forms of financial capital and non-financial resources to support strategies and enterprises working to solve complex social and environmental problems,” in other words, different types of capital combined to meet the needs of entrepreneurs. Collective Action for Just Finance asks: Does the fund, bank, or initiative provide grants and/or technical assistance alongside finance (loans, equity, working capital, etc.) to their borrowers? Do they accept both grant and investment capital to accomplish their lending mission?  

T25 Examples

• REDF Impact Investing Fund provides technical assistance to their borrowers
• Connect Up! Integrated Capital Fund offers grants alongside loans to their borrowers provides technical assistance to their borrowers

A creative finance structure is when a specific loan or investment is structured in a different, unusual, or innovative way to create a circumstance where the capital is in service of the community needs. This includes practices such as patient capital (7-10 year loans), low or no interest, soft loans with no collateral, revenue-based finance, etc. It can also include credit assessment practices for a person or organization lacking a credit history or necessary collateral, so they can access financial resources. Tools such as the 5 Rs of Rematriation, and Due Diligence 2.0 are examples of this criteria.

T25 Examples

• Michigan Good Food Fund – offers low interest patient loans
• IMPAQTO – offers revenue based finance options

Diverse teams are fundamental to transforming finance. Less than 2% of funds are managed by women and people of color, a fact that undermines the financial industry’s ability to address needs and leverage necessary expertise most effectively. We encourage the field to address questions like, “Do team members leverage their lived experiences, intersecting identities, and creativity alongside their financial acumen and skills to transform finance?”

The T25 both prioritizes and collects data on funds that self-identify whether they are 50% or more diverse-led rather than the more traditional industry standard of classifying a smaller percentage of diverse representation as critical to how the fund implements its programs and their ability to serve their communities. We request data on leadership representation of BIPC-led, Indigenous-led, as well as women and gender diverse-team members.

T25 Examples

• ʻĀina  Aloha Economy Fund, Hawai’i Investment Ready is an Indigenous-led fund designed to support Indigenous communities.
• Black Farmer Fund is led by black women with farming experience for a fund designed to support Black farmers.

The T25 List is unique in that it focuses on transformative sources of capital with a racial, gender and equity lens, for that reason, VC funds must distinguish themselves in one of two ways: 

1. They are acting in a sector, geography, population (un or underfunded) that has little or no capital and attention from the VC/PE sector (e.g. Decarceration Fund), using for example, new dealflow, new risk-mitigation, new approach to blended capital.
2. They are transforming the terms of finance in VC/PE to enable broader distribution of wealth (shared prosperity) and right relationship with portfolio companies (e.g. New Majority Capital) via exit strategies, patient capital, blended capital. 

We believe in the importance of diverse BIPOC and women-led funds in finance to expand access to capital for BIPOC, women and underserved businesses and companies. We also feel there are other lists and spaces for VC/PE funds that return a high financial multiple to share their work, when they do not meet our holistic and transformative vision.

Funds and initiatives that only receive grant dollars into their organizations can fit T25 criteria if and only if they deploy investments or a combination of investments and grants. Funds and initiatives that deploy only grant dollars are not a fit for T25’s commitment to moving investment dollars alongside grant dollars to transform the economy. Investments can include a wide range of finance mechanisms including: forgivable loans, recoverable grants, first loss capital, loan guarantees, etc.

The T25 recognizes these exceptions:

1. Grants as first loss layer or involved in a capital stack OR
2. Granting organizations that are in their development stage of building an investment fund or initiative and taking concrete steps to begin the fund or initiative.