Milwaukee, Wis., Dec. 18, 2020 – With $11 million newly allocated to venture capital and mission related investment, the Greater Milwaukee Foundation is on pace to exceed its recent five-year, $30 million commitment to impact investing as a means to advancing equitable economic opportunity.
The Foundation has invested $10 million with Royal Capital Group to support the acquisition and redevelopment of the property that will serve as the physical home of the community-centered ThriveOn Collaboration. The investment gives the Foundation an ownership stake in the former Gimbels-Schuster’s location on King Drive that will house its future headquarters, the Medical College of Wisconsin’s community engagement programs and first floor amenities for the community.
“This $10 million brick-and-mortar investment speaks to the depth of the Foundation’s commitment to the people of Halyard Park, Harambee and Brewers Hill, as we support access to opportunity and racial equity throughout Milwaukee,” said Ken Robertson, executive vice president, chief operating officer and chief financial officer for the Foundation. “When we announced the Foundation’s new strategic vision earlier this month, we emphasized the need to approach community solutions differently, and our place-based investment in this transformational project shows we are serious about change.”
Royal Capital announced the purchase of the historic building at 2153 N. Dr. Martin Luther King Jr. Drive earlier this week.
Venture capital for entrepreneurs
True to its goals of helping Milwaukee-based entrepreneurs and businesses develop and thrive, the Foundation has made a separate $1 million investment in a venture capital fund established by a woman of color that will support pre-revenue startups in Milwaukee County.
Gateway Capital, led by general partner Dana Guthrie, will utilize the Foundation’s investment in a “money for minnows” strategy, which focuses on making smaller investments across many start-ups and technologies. Badger Fund of Funds is the lead investor in the Gateway Capital Fund.
Milwaukee County, whose population is approximately 30 percent Black and 20 percent Hispanic, has traditionally lacked early-stage venture capital investment, and analyses of the sector show that Black and Latinx founders have received only about 2 percent of all venture capital in the U.S. over the last five years.
“Milwaukee has missed out on far too many opportunities to invest in entrepreneurship, particularly in Black- and Brown-owned businesses,” said Ellen Gilligan, Foundation president and CEO. “On top of that, there are very few fund managers of color in the venture capital space overall. It’s clear that this is a system in need of remaking, and the Foundation can play a role in reversing these patterns in Milwaukee. We look forward to the positive impact Dana and the Gateway Capital Fund will have in our community.”
The Foundation anticipates its investment will support anywhere from 10 to 12 startups.
Double bottom line of impact investing
What these investments have in common is their capability to generate both financial and social returns. Impact investing is a tool that enables community foundations like the Greater Milwaukee Foundation to put more of their philanthropic assets into circulation for community benefit in accordance with their missions.
The Foundation’s entry into impact investing began with a pilot program that focused on job creation by supporting existing companies as well as entrepreneurship. Through the pilot, the Foundation ultimately invested nearly $1 million, contributing to the growth of 47 new small businesses, the creation more than 85 jobs, the redevelopment of commercial spaces and the attraction of $4.9 million in additional public investment to local neighborhoods.
Today, the Foundation’s impact investing program focuses on three core priorities – equitable economic opportunities (which includes improving job access and wealth creation through local job and business growth), affordable housing, and early childhood education.
The strong alignment among these priorities and the ThriveOn Collaboration’s shared vision of a Milwaukee that is equitable, healthy and thriving for all, was a key factor in the Foundation’s decision to make a substantial capital investment in the project.
“Being mission aligned has served our collaboration well,” said Kevin Newell, president and CEO of Royal Capital Group. “In addition to the Greater Milwaukee Foundation’s investment as an anchor tenant, their continued commitment to a thriving Milwaukee is evidenced by their $10 million impact investment alongside Royal Capital, which is an important tool in leveraging over $100 million in investment on King Drive.”
Construction is scheduled to begin in February 2021 with completion slated for spring 2022.