Build for Tomorrow, Starting Today: The Opportunity and the Imperative for Impact Investors in the United States

By Caryn Capriccoso, President & CEO, ReHealth Collaborative, and Alison Rein, Managing Director, Quantified Ventures

It’s no wonder that impact investors (ok, nearly all investors) are being cautious with how they deploy capital in the United States these days. Uncertainties driven by shifts in federal policy, significant public sector employee reductions, and large pullbacks in federal funding make this a tumultuous time – especially for those investors with an interest in seeing both financial and social impact returns.

Domestically, at least, the level of patient, below-market-rate impact investing needed has not materialized. Though the current environment seems fraught, impact-first investment capital is needed now more than ever, both to shore up the financial viability of recent high-impact program demonstrations, and to continue advancing emerging opportunities with promise. Impact investors can – and if we are to maintain recent gains, must – play an even more critical role in validating what works: moving private, philanthropic, and (yes, even) public dollars from the sidelines onto the playing field for the betterment of individuals and communities.

Characterizing the Void

The State of Blended Finance 2025 report from Convergence - which looked at global blended finance deals closed in 2024 - found that “despite high catalytic capital potential” philanthropic investors committed only 3% of investor capital in the 123 blended finance deals included in their market review. The report notes that philanthropic impact investors are “especially critical given the decline in ODA [Official Development Assistance] and public, concessional capital.”

In the U.S., there has not been a drastic slowdown in the demand side of impact-oriented projects in need of a capital infusion to prove their value or achieve broader scale. If anything, there is greater demand for impact capital now. However, federal spending has certainly declined, and early indications from 2025 seem to indicate the supply side capital is also pumping the brakes in light of these shifting policy priorities and uncertain economic times.

Even prior to 2025, we observed challenges with the domestic impact finance sector – especially for programs and initiatives focused on delivery of health-promoting services. This includes a limited number of first-mover actors being willing to take on risk, a tendency toward talk instead of tangible action in certain corners of the impact investing sector, and a bias toward investment in tangible assets (e.g., buildings) versus service capacity and infrastructure. In other words, despite the need and availability of investable solutions, many impact investors appear to be unwilling to consider investment opportunities that really meet the market where it is – and with terms appropriate to the moment.

If ever there was a time for impact investors to put capital to use to achieve social outcomes, now is that time.

The Opportunity and the Imperative

For the last several years, social, health, and environmental initiatives have enjoyed substantial federal and state investments – the dividends of which (at least in some cases) have recently started to pay off.

One example in the health sector is the North Carolina Healthy Opportunities Pilot (HOP) – the state’s groundbreaking Medicaid initiative designed to test the impact of providing non-medical housing, food, transportation, and interpersonal safety services to high-need Medicaid enrollees. An evaluation of program impact has revealed that these services were effectively delivered, associated with an improvement in social needs, and reduced the cost of care for those served. All of this was enabled by the willing partnership of (mostly) nonprofit community organizations who expanded capacity to take on this charge. At the time of this writing, the future fate of HOP is unknown; NC still has no approved budget and the program was forced to cease operations on July 1, 2025 – leaving the community organizations and those they serve without a lifeline. Several other bold Medicaid initiatives with similar aims in other states (e.g., California) are in – or may soon face – a similar predicament. Will the field of impact investing stand by while these hard-won gains are lost, or step in with creative and concessionary financing products to help maintain – even partially – this forward momentum?

Both of our organizations play an active role in assembling the parties and building the capacity necessary to create sufficient clarity for action – even in the face of some uncertainty. Working with impact investors, community-based organizations, and a range of others across the healthcare, public, and social services sectors, we facilitate deal flow. In NC, for example, the QV team worked alongside one of the designated Network Leads to identify and design mechanisms to improve the financial viability and sustainability of service delivery under the HOP framework. And in CA, the QV team has supported health plans and community organizations to design, capitalize, and sustainably deliver the suite of services newly authorized by CalAIM.

This social impact ecosystem thrives when parties from different sectors join forces to align around shared outcomes and a willingness to push beyond the operational status quo. Impact investors of all shapes and sizes should continue to deploy funds in 2025 in alignment with their strategic goals and investment thesis, rather than waiting for some future state where the dust has settled and clarity is the norm. Furthermore, it would be wonderful to see more of them actually deploying more capital – both via the products they have (e.g., program related investments) and others that could be tailored to meet the moment.

Identify the Appropriate Investment Approach (and Be Willing to Experiment)

Even though ReHealth Collaborative is a relative newcomer to the impact investing scene, we have created distinct products to address some of the specific needs we’ve seen in the nonprofit human services sector, such as up-front capitalization, data reporting infrastructure development, and cashflow management.

To attract other capital, for example, ReHealth took a subordinate position and issued a $1 million loan to Volunteers of America Southeast Louisiana (VOA SELA) to help launch its substance use treatment program for pregnant, postpartum, and parenting mothers. With terms far below market rate, this loan is part of a public-private capital stack including new market tax credits and state historic tax credits.

Recognizing that access to up-front capital for program start-up is necessary but insufficient, the ReHealth board of directors recently approved a new product designed to support VOA affiliates as they build outcomes data collection and reporting capacity essential for value-based contracting with Managed Care Organizations and other potential outcomes payors. (Full disclosure, Alison is a ReHealth board member and Caryn serves as its President & CEO).

We’re inspired by efforts such as pay-for-success partnerships between Oklahoma Human Services, the Oklahoma Impact Investing Collaborative, and HopeHouse OKC supporting people experiencing and at risk for homelessness through employment and education programming. And we are also encouraged by follow-on efforts such as Denver’s Housing to Health pay-for-success project funding supportive housing services resulting in housing stability and reduced criminal justice system involvement, which built on the success of its previous Supporting Housing Social Impact Bond initiative. And we appreciate groups like Results for America that provide important frameworks and tools for national, state, and local policymakers to implement policies and shift funding toward evidence-based, outcomes-driven programs.

Our organizations deeply understand the value that local community-based organizations and nonprofits deliver in support of more equitable opportunity for health and wellbeing. We seek to leverage the community-informed knowledge housed in these organizations to both share best practices and help to more widely deploy replicable best practices in nonprofit programs that advance new earned revenue models and enhance operations through strategic investments. There are many for-profit, nonprofit, and public sector organizations doing this important work that we meet with, learn from, and look to further collaborate with on an ongoing basis.

Both/And is a Necessity

Impact investors operate as part of a larger ecosystem. Some are now asking how the sector can shape capital markets for the greater good as opposed to simply working within the current constraints.

As Calvert Impact’s Jennifer Pryce put it, “Without dedicated organizations focused on shaping how and where capital flows, we’ll keep seeing the same patterns repeat—capital concentrating where it’s easiest, not where it’s most needed, exacerbating inequality and alienation…This is bigger than any one organization and is our collective calling…to forge capital markets that can better share our prosperity.”

Our organizations applaud these efforts and will continue to collaborate with like-minded parties to endeavor to shift markets and redesign systems. But we don’t want the broader market shaping effort to stymie the incremental gains that can be achieved in the present moment through impact-first investments in communities and programs that are under-capitalized. It must be both/and.

Now is the time for traditional philanthropy and other sources of impact capital to step fully onto the field. Impact-first capital cannot sit on the sidelines and wait for the perfect time or the “sure thing” deal.

Recently, at the Grantmakers in Health Annual Conference, we were reminded by Dr. Dwayne Proctor, CEO of the Missouri Foundation for Health that “this work is never for today; it’s always about the future.” We agree wholeheartedly, and know that the best time to build toward that brighter future is today.