Crain Currency teamed up with Mission Throttle’s Founder, Phillip W. Fisher, and Douglas Bitonti Stewart, executive director of the Max M. Marjorie S. Fisher Foundation, to curate a collection of stories that showcases the power of impact.
Daryn Dodson is Managing Partner of Illumen Capital, an impact fund of funds addressing systemic inequity by reducing racial and gender bias in investing. Previously, Dodson led the Special Equities Program as a consultant to the board of the Calvert Funds, a $12 billion pioneer in impact investing. Through this vehicle, Calvert maintains a portfolio of more than 40 funds on five continents, representing over 350 underlying portfolio companies.
Would you share with us a bit of your journey into impact investing?
I started my career at the Self-Help Credit Union, where we lent more than $6 billion. There we applied systematic frameworks, controlling for many variables, to uncover more than $9.1 billion in annual overcharging of fees and interest by some of the world’s largest banks because of the race of the borrower. That analysis was used in 18 states by advocates to pass consumer protection laws. I then went to Stanford Business School, where I took a deep dive into how companies transform communities in powerful ways; before heading to New Orleans, where I worked with entrepreneurs rebuilding their lives and businesses after Katrina [in 2005]. For the eight years before launching Illumen, I served the Calvert Funds working on deploying impact capital.
Crain Currency teamed up with Mission Throttle’s Founder, Phillip W. Fisher, and Douglas Bitonti Stewart, executive director of the Max M. Marjorie S. Fisher Foundation, to curate a collection of stories that showcases the power of impact.
Amit Bouri is a pioneer in impact investing and co-founder of the Global Impact Investing Network. Here he explains how the integration of ESG and DEI have clarified — and maybe confused — impact investing.
What sparked your interest in launching the Global Impact Investing Network?
Before launching the GIIN, I was working for the Monitor Institute, an experience that helped me understand the potential of how investment dollars could help drive social and environmental impact. While in my role, I was constantly wondering: “What would it take at a systemic scale to move the needle on global inequality, advancements in global health and turning the tide on climate change?”
What I found was that this idea requires more than just driving transactional value. It requires a network where investors can share best practices and opportunities on a global scale and connect nodes of leadership where ideas can flow, with the end effect of moving capital toward positive impact. This is what led to the founding of the GIIN and then, subsequently, our IRIS+ system, which is designed to provide investors with common and standardized metrics to understand the impact. Our work with IRIS+ explores areas where investors are focused, such as mitigating climate change, promoting sustainable agriculture, addressing racial and gender inequality, and more.
Phillip W. Fisher, founder of Mission Throttle and Douglas Bitonti Stewart, executive director of the Max M. & Marjorie S. Fisher Foundation, talked with impact-investing pioneer Sir Ronald Cohen about his personal journey — from his family’s flight from Egypt and his work with the British government on reducing poverty, to the importance of transparency and the appeal of green bonds.
Sir RonaldCohen is considered by many to be the father of impact investing and European venture capital. In 2020, his book Impact: Reshaping Capitalism to Drive Real Change, made the Wall Street Journal bestseller list. Cohen was knighted by Queen Elizabeth in 2001 for his two decades of leadership in developing the venture capital industry in the United Kingdom. In April, he was awarded the 2022 Perlmutter Award for Global Business Leadership at Brandeis University.
What were the forces that launched your journey into impact investing?
I had gotten into venture capital because I felt I could do good and do well at the same time. I could create jobs in the UK, where 3 million were unemployed, and I could also make gains. I knew I would have to look after my parents. My parents lost everything in Egypt — we left with a suitcase and 10 Egyptian pounds each in 1957. That was a way for me to do good and do well. I realized that in many ways, the efforts we were expending in helping people who came from nothing to become wealthy were also not solving the issue of the gap between rich and poor. And so when I got a phone call from [UK] Treasury in 2000 to look at how we deal with poverty by leading a new task force [UK Social Investment Taskforce 2000-2010] I immediately said yes. The government was concerned that however much money it throws at social issues, it doesn’t seem to make a lot of progress. That call in 2000 set me off on the journey which brings us here today.
Why do you believe impact investing is critically important?
I realized, as a result of the work of the Social Investment Taskforce, that the reason we hadn’t made more progress in tackling social issues was that we had failed to bring investment capital to fund those who want to improve other people’s lives. The conclusion of the task force was that we need to innovate and develop effective ways to invest in bringing solutions to social problems. Now, 22 years later, we can see why we have failed to tackle climate issues and to close the widening gap between rich and poor. Black Lives Matter and the gilets jaunes [“yellow vest” protests in France] have once again brought social issues to our consciousness, this time alongside our urgent environmental challenges.
How has the field evolved over the past two decades?
For about a decade now, we have realized that we can change our system by bringing transparency to the impacts created by investors and businesses. When you begin to measure impacts on people and the environment, when you translate them into monetary terms, when you compare them with other investors and businesses, you change norms. You make it unacceptable for somebody to say, “I’m going to make a ton of money, but I’m going to destroy the environment in the process.” You’ve been able to get away with that when the only information available was your financial performance. But if your impacts are in plain sight and measured in monetary terms, and everyone can see that your business creates more damage than profit, all sorts of things begin to happen to you. You don’t attract talent, customers or investors. Instead, you attract regulation and taxation [like the carbon tax].
What do you envision the field to look like in the next two decades?
If you attend a board meeting, at the end of the decade, you will be analyzing not just your financial accounts but also your impact statement. Your audited impact statement will show, in monetary terms, your revenues, your costs and the different impacts you’ve created. You will analyze the monetary value of your environmental and social impacts — and strive to improve your impact and financial performance at the same time. You will quantify the investments you need to make in order to improve your environmental as well as human-impact performance. You will identify specific investments needed to improve it. For example, you will invest in your workforce to reduce diversity differences in employment, pay and advancement. You will also pinpoint ways to eliminate discrimination against gender or ethnic groups. You will do the same for your product impact and for the impact of your supply chain.
How does a socially conscious person get started in impact investing?
We need people to ask themselves, “How can I invest to create a positive impact as well as to realize attractive financial returns?” To do so, I would look within my investment portfolio at its different asset classes, identifying which companies are delivering the least negative impact or preferably the greatest positive impact. I would strive to hold green and sustainability linked bonds. Within my public equity portfolio, I would seek managers that take impact into account. The name of the investment game today is how you use impact to deliver superior investment performance; how you analyze companies according to risk, return and impact.
This article originally appeared in Crain’s Currency, a digital news and community networking platform, designed for families managing wealth and legacies.
"PhilD" is the first professional doctorate for philanthropic and nonprofit professionals
Mission Throttle is funding a competitive fellowship designed for students admitted to the Professional Doctorate of Philanthropic Leadership (PhilD) program with an interest in pursuing a course of study centered on Impact Investing and accelerating the ecosystem of financing the needs in the philanthropic sector.
The field of impact investing and innovative finance is somewhat nascent, but desperately needed both domestically and internationally. We look forward to pragmatic proposals for PhilD applied research topics, ranging from innovative systematic solutions for increasing wide adoption of Impact Investing and capitalizing the realization of the U.N. Sustainable Development Goals (UNSDG’s), lifting reliable evidence of the superior financial performance created by investing with impact, to lifting up impact measurement solutions. We are interested in finding leaders who wish to explore how to advance culture change and real-world social funding tools, platforms and solutions to solve ESG goals in our country and beyond.
Many of us (including me) are thrilled the end of 2020 is quickly approaching. As I reflect on the pandemic’s path which redefined normal life a mere nine months ago, I am reminded of the indelible shock I felt after September 11, 2011. Once again, we are forever changed as externalities (in this case the pandemic) leave behind a path of redefined relationships, priorities, and reality. Rather than be mired in the uncertainty of the new normal, let us commit to the rejuvenation of a hopeful tomorrow — one filled with physical healing, spiritual inspiration, and the commitment to be the catalyst of innovative change.
Well known author and Deloitte futurist, John Hagel, suggests that we are in the early stages of a Big Shift that will require a fundamental transformation of our global economy; where institutions will be incented to scale the edges rather than transform the core. He suggests that when we become catalysts for change towards an inspirational future, we can put uncertainty and fear behind.
In that spirit, I encourage us all to become powerful change catalysts; to take conventional culture, thought and standards to a new dimension; to think differently about the power of social capital beyond donations; and to consider financial return beyond our own capital gains. After all, true community change is change that positively impacts us all equally.
This holiday season, I send my deep gratitude to all of Mission Throttle’s partners, both for-profit and for-impact organizations, led by catalytic change makers who believe in a better tomorrow, and for families and neighbors who are cherished by our global community. I wish you the courage to create transformational change in your life, for those you love, and for those you don’t yet know.
As the COVID-19 crisis continues to wreak havoc on our social agencies, we need to think differently about how to “capitalize” these organizations. Even in a strong economy, our 2.3 million 501(c)(3)s in the U.S. struggle to raise sufficient social capital to sustain and scale their impact. The pandemic has drastically adjusted our perception of normal and creates fertile ground for thinking differently about sustaining mission-driven organizations focused on supporting those in-need. To quote Einstein, “The definition of insanity is doing the same thing over and over again and expecting a different result.” Mission Throttle believes that our country needs to adopt a more capitalistic culture embracing social justice with an equity lens when caring for those less fortunate. In a PC (post-COVID) world, we need to use this enlightened awareness to lead culture reform for innovative social capital tools like Impact Investing. If we revert to our BC (before-COVID) solutions, we will have jeopardized our chance to act into a new way of thinking about what our social impact agencies need to survive and thrive.
Giving USA estimates the total amount of contributions to impact organizations approximated $427 Billion in 2018. Mission Throttle estimates that the annual capital required to solve our country’s social needs exceeds $3 Trillion. This delta between sources and uses we call The Philanthropic Gap. As important as donative capital is, it is but a small fraction of the capital needed to properly support those in need. We need to challenge donors to go beyond check writing, towards dedicating a small percentage of their net worth to invest in equitable social change.
With the COVID-19 pandemic comes the reality that many of our social impact agencies will not survive the crisis. Emergency campaigns only add to the fatigue donors have by continually funding structural deficits.There will be consolidation, mergers, and bankruptcy of fiscally vulnerable agencies. Most social organizations focus solely on donative capital to sustain themselves. Although you may argue that there are too many providers already, social impact agencies continue to resist working together in order to protect their donor relationships; while the demand for life-saving services is exploding. If we are going to change the culture of philanthropic capital, we need to expand and disrupt conventional thinking and embrace sustainable sources of funding.
In capitalism, enterprises with profit motivated culture, sound best practices and free cash flow are creating scale and profitability. They understand how to manage risk and lever capital. Acquisitions, mergers and sales are commonplace. Collaboration and partnerships are encouraged to manage efficiently, effectively, and strive for unique differentiators. This culture must bleed over into philanthropy for our sector to be sustainable and scale its impact.
You may be asking, what can I do to lead forward? Learn more about Impact Investing and become an advocate for this fast-growing field. In board rooms, advocate for innovative forms of capital as a supplement to contributed income. Finally, as the author John Hagel suggests, we must become a catalyst for change towards hope, excitement and inspiration. If we stay frozen in uncertainty and fear, we will become irrelevant over time. Let’s adopt opportunity-based narrative as our call for action. Your suggestions are welcome!
As we return to what’s important during this holiday season, let’s reduce the volume of this crazy world in which we find ourselves to focus on our loved ones. We are buffeted daily with noise that affects our lives like injustice, prejudice, politics and global terror. Why not return to a time when life was much simpler, truly feel the benefits of quieting the onslaught of (social) media, and dedicate ourselves to the power of really hearing each other?
As I reflect on the last decade of Mission Throttle’s work, I feel grateful for my team who inspired and pushed me forward to activate innovate solutions. The team’s past six years work advising over three dozen mission-driven organizations created tremendous value-addand culture change, yet came at a cost that couldn’t be financially supported by me alone going forward. I was positively impacted by my team and proud of the change they brought to our community. The advisory practice was spun-offon June 30 of this year, leaving space for self-reflection and reaching out to my valued national mentors to push new opportunities in the decade to come.
Actualizing our culture of transparency, I questioned myself and set-up a series of interviewswith my amazing network of mentors to hear their thoughts on past developments in the Impact Investing ecosystem, identifying current and future gaps that need filling going forward. Thanks to Ian Makowske, Jennifer Oertel and Kathy Smith, a consolidated reportof findings suggests each of us might play a role in what “can be possible” going forward. I am grateful for the leadership they inspire in this critical work.
Mission Throttle continues to believe in the important role social capital plays in strengthening capacity, sustaining impact and evolving culture in “for-impact” organizations. Each of us has the power to change the trajectory of social supports for underserved populations. As The Starfish Story recalls the importance of personal restoration, we need to also lead forward scalable approaches for community impact. It is not enough to satisfy our charitable hearts by writing checks — we also need to activate, engage, and accelerate philanthropic innovation for the underserved. Let’s commit to be active listeners and determine how we might use our hearts, networks and resources to create sustainable supports for them. It’s our obligation to support each other to create equitable social justice.
Ultimately, making the world a better place requires not just generosity, but a dedication to gaining a better understanding of the problems we are solving for, while constantly evolving the tools needed to give every person a chance to realize their life’s dream.
In the quiet of this holiday season, consider the possibilities of how you will become a more effective change agent in the new year and act yourself into a new way of thinking. Inspire your network to support others by turning down the noise of social media and self-needs and focus on what’s important: our fellow life travelers.
After 6 years of success in its Advisory pillar, Mission Throttle decided to spin-off the practice effective 6/30/19. This spin-off has afforded Mr. Fisher, founder of Mission Throttle, time to refresh, rethink and redirect the organization’s journey, while leveraging his assets and energy to accelerate the impact investing field.
To inform Mission Throttle’s future impact investing strategy, a series of interviews were held with national thought leaders driving the impact investing space to better understand the ecosystem’s current state. These thought leaders represent significant expertise and a variety of perspectives, including leaders at large foundations, development finance institutions, and intermediaries; advisors working with family offices and foundations; founding board members of social enterprises; educators, and ecosystem builders. Our mentors were immensely generous with their time and thoughtful in their responses, providing valuable insight and perspective. Mission Throttle has developed a summary of key themes emerging from these interviews.
