A mother kisses her daughter at a regularly scheduled, UNICEF-supported immunization clinic in the village of Kuka on the outskirts of Beni in North Kivu province, Democratic Republic of the Congo on 21 October 2019.

The UNICEF USA Bridge Fund & Social Impact Investing: The Time Is Now

New Bridge Fund head Cristina Shapiro on why UNICEF USA's innovative impact investing tool has never been more crucial to UNICEF's mission.   

The UNICEF USA Bridge Fund was created to bridge the financing gaps that arise between when a financial commitment is made and the cash is secured. This allows UNICEF to accelerate disaster response and the purchase and delivery of vital health, educational and other essential supplies, prevent interruption of programmatic activity stalled by a lag in receipt of funds, and optimize purchasing terms from reliable manufacturers with cash up front. Since its creation in 2011, the Bridge Fund has bridged scores of transactions, accelerating $283 million to support UNICEF programs.

Below, Cristina Shapiro, the Impact Fund for Children and Bridge Fund's incoming president, explains why social impact investing is more important than ever, and how the Bridge Fund will continue to expedite UNICEF's mission to save and protect vulnerable children around the world.

How can the Bridge Fund help communities affected by the growing number of natural disasters related to the climate crisis?

CRISTINA SHAPIRO When a disaster strikes, speed and expediency of funding are incredibly critical, and the Bridge Fund is really set up to be able to respond quickly, so we have a competitive advantage in fulfilling a focus area around disaster relief. I would like to find innovative ways to work with UNICEF and with governments around the world to mitigate some of those risks.

One idea we could consider is, in its current form, the Bridge Fund can potentially work with the broader UNICEF USA team to become a partner to corporates that want to have an immediate go-to partner for disaster response. A lot of companies, Goldman Sachs for example, my previous employer, and many others always respond in times of crisis, and look for high-performing organizations to provide funding in support of loan or recoverable grant programs. If we're able to structure a partnership where some corporates know in advance that we can help get their grant capital out to critical communities impacted within a week, then we can be that partner of choice. 

Another idea is to explore the creation of insurance or risk mitigation products for countries that don't have access to insurance vehicles that developed countries have or explore the development of supplier financing solutions that allow suppliers to produce items most needed in emergencies. For example, catastrophe bonds have been issued in partnership with entities like the European Reconstruction Bank and the World Bank, and UNICEF might be able to work with governments to create these types of insurance products. Catastrophe bonds shift the risk in cases of disaster, away from governments to private sector investors who want to diversify their portfolio with some of that type of risk.


Cristina Shapiro, incoming head of the UNICEF USA Bridge Fund, a social impact investing tool

Cristina Shapiro is the new President of the Impact Fund for Children and Bridge Fund at UNICEF USA, a social impact investing tool that has bridged transactions representing more than $283 million in program activity since its creation in 2011

COVID-19 is now reaching countries that were already facing humanitarian crisis because of conflict, natural disasters and climate change. How can the Bridge Fund support pandemic response efforts?

CRISTINA SHAPIRO First and foremost, the Bridge Fund is a source to bridge funding to ensure UNICEF can procure and provide critical supplies. Suppliers need to have upfront funding to produce supplies prior to shipping them to UNICEF. In this current crisis, there is likely a role for the Bridge Fund ensuring UNICEF can provide that funding and lock in order from suppliers.

Secondly, the Bridge Fund can help accelerate funding of critical UNICEF programs, reducing the time to get critical solutions to market. The Bridge Fund advances funds for programs and gets repaid when pledges or grants from pre-identified donors come in. With lots of children out of school, there's a huge need for online learning, and a core pillar for UNICEF USA and UNICEF is education. So, we may be able to think about financing and pre-financing education solutions for children who are most impacted.

How will economic fallout from the coronavirus pandemic impact the way the Bridge Fund operates?

CRISTINA SHAPIRO It's likely there will be an economic impact, affecting the type of funding that's available. A lot of the donors that typically provide funding for our work internationally are now being asked to provide support and fund work domestically, so there's a shift inward. In the U.S., there's a lot of focus on how are we helping our domestic populations. For developed countries in Europe, it's the same thing, so that might put a strain on our fundraising in the short term. 

From a programmatic standpoint, I suspect that right now our focus is going to be on COVID-19 prevention (facilitating the production of health supplies and sanitation guidance), education and the psychosocial well-being of children. While usually our focus tends to be more towards pre-financing immunization programs, I think that may be put on hold or slowed down for the time being. That will mean a renewed need to focus and emphasize the pre-financing of immunization campaigns as soon as governments feel like they have COVID-10 more under control. 

How will the global solidarity expressed in the humanitarian response to COVID-19 inspire socially minded investors to support the Bridge Fund? 

CRISTINA SHAPIRO There's a huge opportunity to appeal to a broader set of impact investors or socially minded investors. What attracted me to the Bridge Fund is that it's a perfect combination for a well-balanced portfolio of investments. It provides both a risk-adjusted return and guaranteed impact.

What attracted me to the Bridge Fund is that it's a perfect combination for a well-balanced portfolio of investments. It provides both a risk-adjusted return and guaranteed impact. 

Why is impact investing — and the Bridge Fund in particular — so popular among Millennials?

CRISTINA SHAPIRO While I am not an expert on Millennials, I think the Bridge Fund can be of great appeal to them. Why? Many are giving or investing in impact for the first time. It is appealing that they can 1) provide a grant, loan or recoverable grant that is deeply impactful; 2) If they provide a loan or recoverable grant, they can get their principal back after a set time period, allowing them to either relend it to us or invest it in something else and 3) if it is a loan, they are able to get interest or a return. It can help diversify their portfolio and it is relatively safe. 

The other component that is incredibly compelling about the Bridge Fund is the multiplier effect of either a donation into the Bridge Fund or a loan. A $1 loan provided to the Bridge Fund for five years can result in $10 of funds directed at critical initiatives that help children survive and thrive. That's a huge ability to achieve impact and have a tenfold return on a single dollar loaned to us.

So it's a combination of making some sort of guaranteed return and the incredible satisfaction of doing something useful for the world?

CRISTINA SHAPIRO Exactly. What I've seen in most investors, whether they're younger or more seasoned, is that they look for diversification in their portfolio. They want market rate investments that are agnostic to impact. They may want investments that have a high rate of return and moderate impact. And many want to include investments that are high-impact and have risk-adjusted returns. The Bridge Fund fits into the last category. And given its current focus and structure, it is a low-risk investment.

How has your previous work history prepared you for your new role?

CRISTINA SHAPIRO I couldn't be more excited, first of all. There are a couple of things that have positioned me well. In the last nine years at Goldman, all of the work that I did — I worked specifically on key strategic impact initiatives such as 10,000 Small Businesses, 10,000 Women, disaster response, loan programs after Sandy and Hurricane Harvey, and social impact bonds — all of those required working across a broad spectrum of teams located globally in a very collaborative way to achieve a very clear set of objectives. I think that will be much needed working in a matrix organization that includes UNICEF, UNICEF USA, the Bridge Fund, the national committees and the regional offices.

From a more technical perspective, seven of my nine years at Goldman were focused on developing and managing a portfolio of double bottom line investments that needed to result in both a return of capital to Goldman Sachs and also achieve an impact. In this case, my impact and my focus was helping small business owners who were not able to access funding from traditional markets or sources. My role was identifying opportunities where we could allocate Goldman Sachs capital, underwriting those opportunities to make sure that we had confidence that we would get repaid. And then, managing that portfolio of investments to ensure that there's both a return of capital and that there's impact.

The last thing that I think is going to be incredibly helpful in my new role is that, as part of my role at Goldman, I had the privilege of managing a complex partnership with the International Finance Corporation. The Goldman Sachs Foundation and the IFC partnered to launch the first ever global facility for women entrepreneurs. Goldman provided the concessionary funds used to provide a first loss to incentivize banks in emerging markets to lend to more women. My experience working with the IFC will give me ideas for what we might be able to do with the Bridge Fund and how we might be able to work with the IFC and others to develop new solutions in service of UNICEF's mission.

Where did those women entrepreneurs live?

CRISTINA SHAPIRO They were in over 50 countries. Africa, Asia, Latin America. The goal was to incentivize banks to lend to more women entrepreneurs given they thought that lending to women was riskier. By providing them that first loss grant funding or performance incentives, we allowed them to focus on lending to women. Over time, what they realize is, lo and behold, what we all had already known: those women entrepreneurs performed better than their male counterparts and were lower risk.

You studied international relations as an undergraduate at the University of Pennsylvania and you have an M.A. in economic development from the School of International and Public Affairs at Columbia University. What has changed in how you view the world since you began your professional career?

CRISTINA SHAPIRO There's the theory, and then there's the practice. I remember studying the independent roles of the public, private and nonprofit sectors and how they each played a role in the economy and economic development. But seeing it come to life is really just a remarkably different and much more fascinating experience.

One of my most rewarding experiences was when I was at Goldman Sachs during Hurricane Sandy. I knew that the storm was going to hit; we had to leave New York City with our kids, because we were living in Lower Manhattan. We were at a friend's house and I said, "This is not going to be good. Who can we call to figure out what Goldman Sachs can do through our 10,000 Small Businesses program to be responsive?" The storm had not hit yet, and on one line I had the CEO of NYBDC [New York Business Development Corporation], which was a local mission-driven small business lender, and on the other I had someone from the NYC Economic Development Corporation. I knew the CEO of NYBDC quite well, and I said, "Pat, we should do something." And he said, "Tell me what you want to do. If you need me to do loans, and you can provide me low-cost capital, you'll pay for my out-of-pocket costs, but you don't have to pay me any other money to do that."

I told the NYC EDC, "If I could get Goldman to provide $5 million of zero interest or 1% interest, can you provide some risk reduction? Mitigate our risk by providing capital but being first lost to us." And that's when I truly saw each of the sectors using their competitive advantage in the best way. Goldman as a source of capital (while foregoing its interest payments and fees), the city as a catalyst incentivizing banks to provide incremental funds by providing risk mitigation, and NYBDC as the key implementing partner with boots on the ground working directly to identify and help impacted business owners. And had those three sectors not come together with the timing and immediacy that we did, we wouldn't have been able to have a loan program out in the market within a week of the storm hitting.

So, there's the theory and then there's seeing it live in what I think is the best possible way, with all key sectors coming together.

I'm excited to grow the Bridge Fund, and to identify new ways to use impact investing to help UNICEF achieve its mission of helping more children around the world. 

Why work on something global now?

CRISTINA SHAPIRO I was born and raised in Mexico City. I lived there until I left for college, and I saw firsthand the social inequality and inequity, day in and day out. I was incredibly lucky to have access to the resources that I did, but I realized that not everybody around me had access to those things. So, for me, impact and working and being a volunteer have been central to my entire life from middle school on.

Impact has been front and center during my time at Goldman. My entire focus was on social impact driven initiatives, and so for me, this next chapter leading the Impact Fund for Children and Bridge Fund is a natural evolution. My clients have always been nonprofit organizations. I've sat on the board of one nonprofit microlender, Accion East, for the last eight years and have recently joined another board.

I couldn't be prouder that I was selected for this role. I am thrilled to work with a nonprofit organization that is doing one of the most critical jobs in the world, which is to enable the safety, health and well-being of children. I'm excited to grow the Bridge Fund, and to identify new ways to use impact investing to help UNICEF achieve its mission of helping more children around the world.

The UNICEF USA Bridge Fund is listed in the Impact Assets 50 curated list of fund managers and strives to drive success for the Sustainable Development Goals of 2030.

Learn how the UNICEF USA Bridge Fund accelerated the humanitarian response in Indonesia.



TOP PHOTO: A mother kisses her daughter at a UNICEF-supported immunization clinic in the village of Kuka on the outskirts of Beni in North Kivu province, Democratic Republic of the Congo. The UNICEF USA Bridge Fund accelerated $2.9 million of funding from the World Bank to procure 15.2 million essential vaccines for children in the DRC in 2019. © UNICEF/UNI312402/Nybo