Bankable and Extractable: A Two-Axis Map of Capital Exclusion and the Case for Recyclable Philanthropic Capital

Roshan Ghadamian
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Roshan Ghadamian: Institute for Regenerative Systems Architecture

IRSA Working Papers from Institute for Regenerative Systems Architecture

Abstract: Frameworks that describe the landscape of capital — the returns continuum, the spectrum of capital, blended value — array instruments along a single dimension: the return a financier expects. We argue this is one axis short. Traditional finance underwrites two independent questions and requires an affirmative answer to both: can the venture service a fixed, priced, scheduled claim (bankability), and is there a financial surplus an investor can take (extractability)? Organisations answering yes to the first and no to the second are structurally exiled, however creditworthy. Recoverable capital occupies exactly that cell: it prices no claim, takes no surplus, and recycles principal — a multiple on total deployment while replenishment covers the leak, not perpetuity. We then take the model to data. Classifying every financially-reporting Australian charity (n = 44,196) on the two axes — using market-facing earned income as an observable proxy for extractability, structurally near zero across a legally non-distributing sector — we find the exiled region is the sector's dominant reality. Half of all charities by count are bankable yet non-commercial, and a donation-funded core of 10,551 organisations ($10.1 bn in annual revenue) is the sharpest target for recoverable capital. The classification reconciles to the regulator's published aggregates within 2–4% across four years, and replicates in the United States: across 283,771 full-990 public charities the same cell is again the largest by entity count (49%), reconciling to IRS aggregates within 3.7%. The exiled region is a structural feature of how capital is underwritten, not an artefact of one country. We also identify the binding gap: no systematic recovery benchmark for recoverable-grant capital exists in either country. Individual programmes report figures — Ghadamian documents a PRI-capitalised revolving loan fund repaying at 97% — but a single well-run instance is not a base rate for a population selected on these axes, and it is that base rate a pool at scale would be first to generate.

Keywords: recoverable grants; catalytic capital; missing middle; blended finance; credit rationing; philanthropy; impact investing (search for similar items in EconPapers)
JEL-codes: D53 G21 G23 L31 O16 (search for similar items in EconPapers)
Date: 2026-07
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Persistent link: https://EconPapers.repec.org/RePEc:evk:wpaper:bankable

DOI: 10.2139/ssrn.7102699

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