For investors who seek to make a positive impact on society, it's become clear in recent weeks that we've missed a big piece of the puzzle. Millions of people, not just in the United States but around the world, are telling us this by taking to the streets, protesting a system that for too long has treated people of color unfairly, and often brutally.
We've been working along the edges, it seems, when we needed to go directly to the center.
As investors, and as citizens, we have much to learn. We'll have to do a lot of listening, and admit when we're wrong. But to put it plainly, if we want to make a true impact, we need to start by thinking very specifically about our fellow humans, and how our actions and investments impact them.
AN EVOLUTION
Sustainable and impact investing evolved from years of investor indifference to the effects their money-making activities had on society. The idea that one could do well while doing some good reflected changing investor attitudes, and the understanding that companies do not operate in a vacuum, needing to attract workers and customers while successfully existing in communities where they operate. Adoption of this principle was an important milestone, and now it is widely believed to reflect how the best companies are managed.
At the same time, most investors sought "market rate" returns, not wanting to sacrifice financial benefit while creating a healthier planet or investing in companies who treat their employees well. That logic made sense, too, since investors have future liabilities (retirement, education, etc.) that need to be satisfied through saving and investing. And this dual mandate was successful, with socially-focused funds doing as well, or better than, conventional ones.
Despite this success, as this evolution continues, it's becoming clear that we were too rigid, or too narrow, in our thinking. Why confine one's self to only market rate return investments? Have we been missing chances to make out-sized impacts for what might have been a small performance difference? Investors deserve the freedom of choice for how to deploy their capital.
Fortunately, investing for impact is not one dimensional. Instead, it consists of a series of opportunities along a spectrum of financial reward and social good. At the far end of the spectrum, of course, is charitable giving -- 100% impact focused, and with a 100% gift of principal. Somewhere short of pure charity (i.e., making below market returns) are worthy projects and organizations that need to be explored. Along that spectrum is where we hope to provide guidance, drawing public attention to those opportunities to address what might be society's most pressing issue -- the marginalization of large numbers of citizens.
OUR ACTIONS
Boardwalk Capital's hope is to be creative. We seek to engage local entrepreneurs of color, along with minority and women-led funds, and learn from their work. We will evaluate a range of potential investment opportunities, and share them widely with our clients and friends. We'll introduce investors and friends to organizations like CNote that channel dollars to CDFI's (Community Development Financial Institutions that provide credit and financial services to underserved markets and populations.)
On the local engagement front, our work with colleges may be a springboard to greater integration with local HBCUs. Mentorship programs are another area where we hope to add value. We are already in close contact with fellow B Corporations and with local institutions, through the UN Regional Centers of Expertise, Atlanta about programs where we could play a role. And we still strongly believe that climate action is worthy of our attention. Communities of color are disproportionately impacted by air quality issues, and we all ultimately lose from stronger storms, more frequent wildfires and more severe droughts.
We'll continue to seek partners to help us learn and grow and to ultimately help capital find its way to where it can do the most good. And we'll continue to address our clients' financial needs while also helping them to see other options for investment that may have previously gone unexplored. If we are successful, investors will have a far richer experience by making a real impact, and capital-seeking organizations will be more able to address the opportunities that they see and the needs that have previously gone unmet.
We will have broadened the definition of investing for impact.
As always, thanks for reading and please stay tuned.