All Things Impact.

private capital & the public good

All Things Impact for June 10: 42% of affluent investors “associate responsible investments as charity"

Brian WalshComment

Hi friends,

Welcome to All Things Impact. Here are four links worth your time (plus job postings, items of note, and a calendar of upcoming events): 

1. Effective Philanthropy: Building a Foundation for the 21st Century
Foundations deploy about $45 billion annually in the form of grants. But they have roughly $800 billion in endowment assets. Should a foundation's impact only come from it's grantmaking budget? Clara Miller writes in the Nonprofit Quarterly about her work transforming the way the Heron Foundation thinks about its full portfolio of impact, both its "endowment" and grantmaking, putting all of this in the context of the estimated $200+ trillion (that's trillion with a "t") global financial markets:

"The portfolio itself—Heron’s permanent capital, sometimes called an “endowment”—was in the vicinity of $300 million. This, by itself, was hardly enough to move the economy. Moreover, even if we recruited all our peers to do exactly as we had done, we, together, would comprise a total of one percent of assets under management globally. Even one percent would be a start, but we needed to look further. Our work, and our investing, must be influential not only beyond our walls, but beyond philanthropy.

So we decided to look beyond our portfolio of investments, to examine the way we operated and how we interacted with the economy as a whole. Our goal was to do more, and the route we saw was to move beyond marginal and toward fundamental philanthropy, where philanthropy is seen as essential to the functioning of the economy, not as separate and in ways protected from it. We realized that our dominant model was designed to address problems at the margins, in isolation from the commercial mainstream. But this meant that the model itself left on the shelf one of its key distinguishing strengths as an enterprise: the ability to approach all forms of commerce with social benefit in mind.

Possibly the current operating model of the private foundation was logical in an era where economies were subject to the “pull of place,” when business owners lived near their workers and were visible in the community; where shared “enlightened self-interest” was manifest and actionable; and where problems seemed bounded by geography (such as transshipment points), political sub-divisions and mid-20th century technology. But from Heron’s point of view, current conditions demanded something that went beyond a hermetic, self-protective model...

To fully engage all of our assets for mission, we would not only need to unify the financial and mission goals of the foundation in practice, we would need to push ourselves to break down our protective terrarium and rebuild an operating model that would require that we engage more actively with others—nonprofits and for-profits alike. Reinventing the private foundation would require that we build a model that requires the combined strengths of dispassionate, efficiency-oriented bankers and passionate, mission-focused program officers to make the most of philanthropic as well as broader societal assets, both inside and, more importantly, outside the terrarium."

2. Impact Investing: What RFK’s “Ripples of Hope” can teach about impact investing
50 years ago this week (June 6, 1966), while addressing a group of students in Cape Town, Robert Kennedy said: “Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring those ripples build a current which can sweep down the mightiest walls of oppression and resistance.”

South African native Antony Bugg-Levine, of the Nonprofit Finance Fund, reflects in Medium about how four themes identified in the speech might have something to tell us about today, about impact investing:

Futility: When we stop believing that we can change the existing order, we are prone to give up. How many of us working in mainstream finance or private foundations have not faced moments when it just seemed that the forces of inertia were too dominant to be dislodged?

Expediency: When we realize how hard it is to do this work with integrity, we are tempted to pass off relatively mainstream investments as impactful, or to praise what we know to be spurious claims by others.

Timidity: Kennedy notes that few people are willing to “brave the disapproval of their peers”. How many of us are willing to change how we invest and manage assets while these new approaches still face skepticism? From our bosses? Our Boards? Our partners? Or to call out the expedient when we see it?

Comfort: Those of us who care about investments, and who have the power to influence them — whether our institutions’ or our own — are immensely privileged. And with that privilege, we have the option to pursue a relatively easy path to material and professional comfort. How many of us have the strength to resist the urge to walk down that easy path, to give in to the security of the current order of things?


3. Responsible Investing: 42% of affluent investors “associate responsible investments as charity"
Do we need better language and clarity around responsible investing (RI)? Justin Morton of Bloomberg Brief reports on a survey by TIAA Global Asset Management of the attitudes towards responsible investing from both affluent investors and their investment advisors. One cautionary finding: 42% of affluent investors “associate responsible investments as charity." 

Here are some other key findings:

  • Only 41% of affluent investors are familiar with responsible investing, compared to 68% of advisors.
  • Millennial investors are the most passionate supporters of RI, with 90% saying their investments should try to make a positive impact on society (compared to 74% of other generations)
  • Out of 2,206 investors who responded to the survey, 48% said they were interested in participating in responsible investing over the next 12 months, while 62% of those respondents said they are likely to ask their adviser about responsible investing in the next 12 months.
  • 36% of Advisors don’t know how to accurately evaluate responsible investments.
  • Advisors hesitate to recommend RI due to concerns about performance and the quality of choices available

The report concludes:

"Responsible Investment is now mainstream, a reflection of a society-wide shift towards recognizing the social and environmental impacts of individual choices. Interest is strong—especially among Millennials—but investors aren’t always aware of their options. In addition, a few old myths persist, especially about performance, fees and the availability of best-in-class products. Practice management and educational resources are urgently needed to close the final gap and satisfy the growing demand for responsible investments."


4. Wildcard Topic: 'Star Wars' Is Really About Feminism. And Jefferson. And Jesus.
Cass Sunstein excerpts his new book, The World According to Star Wars, in BloombergView, by showing that, "like a great novel or poem, Star Wars doesn’t tell you what to think. You can understand it in different, even contradictory ways." He then lays out possible six interpretations: Christian, Oedipal, Jeffersonian politics, Devil Party, Technology, or even Feminism: 

From the feminist point of view, is Star Wars awful and kind of embarrassing, or actually terrific and inspiring? No one can doubt that "The Force Awakens" strikes a strong blow for sex equality: Rey is the unambiguous hero (the new Luke!), and she gets to kick some Dark Side butt. Just look at the expression on her face when she has a go at Kylo Ren.
 
By contrast, the original trilogy and the prequels are easily taken as male fantasies about both men and women. The tough guys? The guys. When you feel the Force, you get stronger, and you get to choke people, and you can shoot or kill them, preferably with a lightsaber (which looks, well, more than a little phallic -- the longer, the better).
 
But there’s another view. Leia is the leader of the rebellion. She’s a terrific fighter, and she knows what she’s doing. She’s brave, and she’s tough, and she’s good with a gun. By contrast, the men are a bit clueless. She does wear a skimpy costume, and she gets enslaved, kind of, by Jabba the Hutt. But isn’t everything redeemed, because she gets to strangle her captor with the very chain with which he bound her? Isn’t that the real redemption scene in the series?

5. Job Postings


6. Items of Note

  • Echoing Green has developed the Seed Impact Investment Template Note, or “SeedIIT,” to help emerging social entrepreneurs running for-profit businesses. They are hosting a webinar explaining SeedIIT on June 15 at 11am EST. 
  • The MacArthur Foundation has launched an ambitious open grant competition 100&Change, a $100 million prized for a nonprofit - or even for profit - to submit a compelling idea to solve a major issue. 


7. Upcoming Events

June 13 GrantStation Forum on Philanthropy (NYC) Effective Philanthropy
June 22-23 Social Impact Exchange - Conference on Scaling Impact (NYC) Effective Philanthropy
June 23-July 2  Aspen Ideas Festival (Aspen, CO) Effective Philanthropy
June 29-30 Future Finance & Social Innovation (Toronto) Impact & Responsible Investing
Sept 6-8  PRI in Person (Singapore) Responsible Investing
Sept 13-16  SOCAP (SF) Impact Investing
Sept 26-28 Exponent Philanthropy Conference (Chicago) Effective Philanthropy
Sept 26-28 ANDE Conference (Lessburg, Virginia) Impact Investing
Oct 9-14  Opportunity Collaboration  (Cancun Yucatan) Impact Investing
Oct 18  High Water Women (NYC) Impact Investing
Oct 18-20 Conscious Capitalism CEO Summit (Austin, TX) Responsible Investing
Nov 3-5  Net Impact (Philadelphia) Various
Nov 9-11  Sustainable, Responsible, Impact Investing (Denver) Responsible Investing
Nov 16-18 Independent Sector (DC) Philanthropy
Dec 7-8  Global Impact Investing Network (Amsterdam) Impact Investing


That’s it for this week. Help me spread the word about #AllThingsImpact to your friends and colleagues, who can sign up to receive this newsletter at All Things Impact. Please also send me any job postings, items of note, upcoming events, or compelling links you discover in your own journeys across the web (even things like this dog and capybara getting to know each other).  

Until next time, thanks for reading!
Brian

Brian Walsh
Head of Impact at Liquidnet. Full Bio.