Is the “Missing Middle” Primed To Be “Found”?

It’s time for philanthropy to collaborate and scale the use of catalytic capital.

There’s been no shortage of interest in catalytic capital over the past few years – spurred by major foundations and family offices like MacArthur’s Catalytic Capital Consortium which just released its first impact report — and creative investing vehicles from Social Finance, Mission Driven Finance, and Maycomb Capital. There is evidence it works in a variety of settings to spur innovative and scale impact in sectors that traditional capital ignores.

For those who know me, I’ve been a broken record around the need for more flexible, patient capital in the workforce sector, evidenced by the paper we published with our sponsors Catalytic Capital: Funding the Missing Middle in the Education to Workforce Ecosystem.  However, funding “what works” at scale remains elusive – possibly because there aren’t enough visible use cases around “what works”, or more likely, because funders still aren’t comfortable and aware of structures that could achieve impact along with some measure of financial return as Paul Fain outlined in his November 2025 blog on the topic.

This could be the year where “the missing middle” gains traction, and philanthropy begins to inject significant momentum in bringing catalytic capital at scale in the workforce sector.  With the frenzy of public and employer interest in the “skilled labor gap” – whether in the trades or job transformation driven by AI – and the movement for employers and states to take matters into their own hands as public funding and trust in higher ed has eroded, I believe we will see more movement in plugging the missing middle.

There is room not only for philanthropists seeking both impact and return, but other large pools of capital such as endowments, pension funds, and donor advised funds that could fuel impact where public and private funding have failed. And all kinds of instruments, particularly debt, are now being discussed and implemented as ways to fuel non-profit sustainability, scale in public-private partnerships, and also spur innovation in the workforce sector.

At Tyton, we will continue our work with education organizations – both for profit and nonprofit – intermediaries, and impact investors in creating and finding “what works.” We hope to keep illuminating viable workforce use cases and structures that plug the missing middle and galvanize change at scale.

Please give us a call if this topic interests you, or if you are a funder, education organization, or intermediary that wants to learn more.