As this tumultuous year of 2020 draws to a close, we have been reflecting on the events of the past year and what 2021 brings for impact investing in education and the future of work. Looking back, we are encouraged by the role impact investors played, whether in nurturing grantees and investees through this difficult period; rapidly standing up pooled funds to provide direct aid to critical non-profit intermediaries and individuals; or committing to doing things in a “different way” as a response to this new normal. Going forward, the advent of a new administration in the US will certainly bring an approach and policies around education and future of work that are radically different from the current administration, with interesting ramifications for the role of impact investors: we have consequently focused this newsletter on what we see as likely developments in the United States.
Going forward: A new age of increased public/private partnerships?
Under a new administration, we are expecting a renewed and reinvigorated role of the public sector in driving key educational and economic priorities. The Biden/Harris administration is first and foremost focused on the response to COVID, viewing the control of the pandemic as the way to keeping schools and the economy open. With the recent news of vaccine trial efficacy, we would expect increased confidence in a “return to some normalcy” in schools by late spring, assuming the administration can mobilize a national plan on vaccine roll-out. This would bode well for the economy too, as more controlled openings of businesses can occur and parents can send their children to school with more confidence about health and safety.
For impact investors and philanthropic capital, this may signal a shift away from direct aid toward reimagining the future of education and work as well as incorporating some of the irreversible changes and silver linings inspired by the pandemic. With a more coherent national policy and funding framework, there also could be opportunity for more coordinated public/private responses to some of the most intractable problems—access to affordable education and to sustainable good jobs.
COVID-19 response and education system implications in the US
While open questions remain on how funding will be targeted, a second CARES Act will surely have some provisions to ensure schools receive adequate funding to support the PPE and other school improvements needed to ensure public health and safety. This more measured approach—in tandem with a likely national plan on vaccination distribution—is laid out in the administration’s “Roadmap for Opening Schools Safely” and supported by the Heroes Act that provides public schools with additional funding for PPE. Once health and safety priorities are met, we foresee the Biden administration making good on some of its promises related to K12, such as an increase in Title 1 funding to address equity issues and support for universal pre-K, as well as greater support for teachers in what is perceived to be a “union-friendly” administration.
Higher Education and the Economy:
The CARES Act may have less of a direct impact on Higher Education, but we expect the administration rapidly to focus on several critical issues which impact students and the overall economy. Chief among them are debt forgiveness and college affordability. Tackling both issues is an expensive endeavor, but the Biden administration has vowed to address the 45M borrowers who carry $1.7T in debt through allegedly unfair recruiting practices or those who simply could not pay back their loans due to job loss and inability to access federal relief programs. “Free” community college—already offered in 17 states—is also on the agenda as a national priority.
- This administration is expected to try to reimpose “gainful employment” regulations on for-profit colleges. Whether this increased scrutiny would have a chilling effect on the for-profit industry remains to be seen, as many institutions have already amended practices that led to problems in the first place.
- These actions to ensure that education is more accessible and affordable to many will be augmented by more targeted efforts to reduce skills gaps through strategic job creation, likely by connecting employers with community colleges that can provide training for in-demand skills to convert US energy provision to more sustainable sources. Climate change is a big Biden priority, along with job creation through upgrading America’s aging transportation and digital infrastructure.
As these themes start to play out—whether in K-12, Higher Education or the economy—it remains to be seen how big a role the federal government will play, and how much of the change will be driven at the state level. The battle for control of the Senate will surely impact the Biden administration’s latitude to implement some of these policies. If investments in education are prioritized as expected, there might be less urgency for investors to step up to support short-term change in the system. Instead, they would have an opportunity to take a step back and reimagine the future of education, and start crafting the path that will get the US there.
Looking back: Impact investing redefined and highlights from SOCAP 2020
There’s no doubt that the twin pandemics of COVID and its impact on vulnerable populations as well as the enormous response to institutional racism have radically altered the way people think and are approaching the future of work and education. Over the course of the year, Tyton engaged in many conversations and worked alongside our clients to note these shifts; we will be analyzing the ramifications in the coming months, as well as helping to catalyze new ways of thinking and driving change through impact and philanthropic endeavors across the globe.
We were pleased to form a year-long partnership with SOCAP as a sponsor on its Radical Collaboration platform and at SOCAP2020 Virtual, the leading conference that convenes a network of impact investors, social entrepreneurs, and other social impact leaders.
Tyton Partner’s Nick Kind, Senior Director EMEIA, and Andrea Mainelli, Senior Advisor, facilitated multiple webinars and dove deep with some leading experts on timely and relevant topics. Access the session recording through the links in the session titles and company names below:
- How Impact Investing Can Help People Get Back to Work – Joann Chen from ETF@JFFLabs and Joe Ludlow from Ufi Ventures spoke about their respective venture and pre-seed technology funds focused on tools in the US and UK to connect the unemployed and under-employed with jobs. Each brought unique insights, rationale and strategies related to their respective funds and their formation—interesting food for thought for those thinking of starting funds geared toward the future of work.