Capital with a catch: Investors in Fund Good Jobs are doing just that

Editor's note: Woody Shackleton has a donor advised fund with SVCF. This story first appeared in the Spring 2016 edition of SVCF magazine.

Woody Shackleton has done a lot of investing in his life, and he’s long been philanthropically active. But social impact investing was new to him until he became one of the first investors in ICA Fund Good Jobs.

ICA Fund Good Jobs provides initial capital for small business owners in the Oakland area. In turn, the owners agree to pay more than the local living wage; provide medical, dental and retirement benefits; and create professional opportunities for employees.

The organization is an evolution of Inner City Advisors, which for 20 years provided structured education, mentorship and advising to Bay Area small businesses. About two years ago, ICA leaders realized that the businesses they were working with often lacked growth capital, typically between $250,000 and $2 million.

“At that level, even for community banks, it’s a heavier lift and more of a risk,” says Sean Daniel Murphy, CEO of ICA Fund Good Jobs. “And it’s below your traditional private equity venture capital return profile. But they are still great business.” So Fund Good Jobs was formed to help ICA-vetted businesses raise the capital they need to become local economic engines.

Shackleton, a retired technology executive who lives in Atherton, was familiar with ICA and the above-the-norm support the group provides small businesses. So when Murphy approached him about investing in Fund Good Jobs, he was confident the businesses seeking funding had been put through their paces.

With SVCF’s help, Shackleton used his donor advised fund to create a $100,000 recoverable grant for Fund Good Jobs. At the time of his investment last year, the organization was helping Oakland’s Firebrand Artisan Breads get its retail operation off the ground. A recoverable grant is similar to a no-interest or very low-interest loan. When Firebrand pays back the $100,000, the money will be reinvested in other small businesses.

Firebrand Artisan breads
Oakland's Firebrand Artisan Breads supports 50 jobs,
thanks in part to the efforts of ICA Fund Good Jobs.

“This is a cool way to put philanthropic money to work — not just to help one business grow, but hopefully to get funneled back to help other businesses grow,” Shackleton says.

Fund Good Jobs also grew his initial investment. And over the course of 2015, Firebrand more than doubled its workforce. The company now employs more than 50 people, almost all full time.

“One of the huge issues in society is the gap between the haves and the have-nots,” he says. “These businesses are creating good jobs, not just jobs.”