Alice Lin Fabiano

Amid the surge of environmental, social and governance (ESG) investing, Johnson & Johnson decided to look at where the money was going. It specifically researched impact investing — that is, funding to help a group complete a project or develop a program to positively benefit society — and was surprised at what it found. Of the $715 billion in impact investments under management, only 7% was going to health.

“Why is only 7% of healthcare invested in impact investing? The answer we got back consistently was the requirement for health to have a deep expertise, a scientific bench and a knowledge and know how around healthcare that’s just different than micro finance or fintech types of investments,” Alice Lin Fabiano, J&J’s global director of social innovation and investment, said.

J&J thought its own expertise could make a difference. So it launched J&J Impact Ventures in 2019. It’s now invested $50 million in health entrepreneurs and startup companies to help them grow and scale their businesses that make a difference. The investment fund is meant to complement J&J grants and donations by using business-based equity, loans or even repayable grants.

Ashlee Wisdom

But it’s not only investing capital in the up-and-coming companies. J&J also provides “our people, our talent and expertise hand in hand to work closely with the entrepreneurs to grow their business and make a bigger impact around the world,” Fabiano said.

One of those entrepreneurs is Ashlee Wisdom, founder and CEO of Health in Her Hue, a digital platform that works to reduce racial health disparities and improve health outcomes for Black women and women of color. She founded her company based on her own healthcare experiences and now uses technology and media to connect women of color to culturally competent healthcare providers and information.

J&J met Wisdom through its partnership with impact investment group Village Capital, Fabiano said. That’s also how J&J connected with Chris Hedrick and his company NextStep, a certified nursing assistant (CNA) training and job placement program to help address the caregiver crisis in the US.

Chris Hedrick

The program recruits people interested in healthcare careers from lower-wage jobs such as fast food or gig work like Uber driving, offering free online training while they’re still working. The hiring health system or employer then pays for the training when the CNAs graduate and start working.

“These entrepreneurs are looking at real societal issues in the US today — and ones that are only growing, exacerbated for low-income and vulnerable people during the Covid-19 pandemic — and using a market-based solution to address the issues,” Fabiano said.

Last year, J&J Impact Ventures committed to supporting frontline healthcare workers and the entrepreneurs coming up with solutions there. For 2022, it’s continuing that work with two specific focus areas – closing the healthcare worker gap and addressing racial health equity.

J&J Impact sits inside the J&J Foundation and augments its other efforts including the 2020-launched $250 million 10-year health worker innovation fund to bridge the employee gap. The investment fund also complements J&J’s $100 million dedicated 5-year commitment which was also launched in 2020 to tackle racism as a public health issue.

“There is a need for grants and a real need for disaster response – grants for food and emergency responses, particularly during Covid-19 – that ultimately should not and will not get a return and are not business based. That’s important and will continue,” Fabiano said. “When J&J Impact Ventures was launched it was with the commitment that it was complementary and incremental dollars to what was already committed from a grant-making and philanthropic perspective.”

While $50 million is significant, J&J also realizes more is more and works with partners to boost funding, including competitors like Merck, Roche and Sanofi, other industry companies like Unilever and Salesforce, as well as with public health groups and government agencies.

“We’re hoping to incentivize other private-sector companies to also invest in health entrepreneurs and help address some of these big societal commitments. Part of this is all of us working together,” Fabiano said.