In February 2018, the Aspen Institute's Center for Urban Innovationhosted a day-long workshop in Detroit around Venture Capital's approach to equity and inclusion. Transform Finance Executive Director Andrea Armeni attended this workshop, for which CUI has just released a concise summary of the day's conclusions.
Last week, Transform Finance attended CommonBound 2018, the New Economy Coalition’s biennial gathering.
The conversations ranged from inspiring to introspective to saddening, and the need for developing radical alternatives to business as usual stuck out clearer than ever. With the political situation getting more grim by the day, families being displaced and torn apart, and the primacy of shareholders and investors remaining fundamentally unquestioned, conference participants brought a sense of urgency to the table.
Transform Finance’s work on racial justice and finance explores the intersection of capital with the needs of the racial justice movement. As holders of capital, foundations committed to racial justice in their programmatic work, in particular, are increasingly inquiring into how to align their endowments in furtherance of racial justice.
But how exactly does race manifest in finance, and how can the effects of capital allocations be shifted to favor racial justice?
This was the theme of a dinner conversation that Transform Finance hosted for participants at Mission Investors Exchange’s 2018 Mission Forward Conference, the premier event for the leadership role for philanthropy in impact investing.
Robots and their artificial intelligence brethren are not coming for our (human) jobs, if you ask Heidi Shierholz, former Chief Economist at the Department of Labor. Shierholz, now at the Economic Policy Institute, was a keynote speaker at The Future of Capitalism and the Future of Work, a one-day conference hosted by the Murphy Institute last Friday.
The most recent Transform Finance Investor Network webinar, hosted in conjunction with Fran Seegull and John Cochrane from the U.S. Impact Investing Alliance and Rachel Reilly Carroll from Enterprise Community Partners, focused on a new development in tax law and investments in low-income communities: Opportunity Zones. Opportunity Zones are designated low-income areas eligible for investments with deferred or exempt capital gains taxes under the 2017 tax bill. Although it is a new policy, investors across the impact spectrum are keen on participating and discussing its implications – and the potential warning signs.
Last week, Transform Finance Executive Director Andrea Armeni attended a workshop in Uppsala, Sweden on financing the SDGs. As part of UN DOCO's efforts to drive private capital towards fulfilling the Sustainable Development Goals, this workshop featured a mix of advisors, private sector actors, and UN Officials from Armenia, Kenya, Indonesia, Jordan, and Colombia. The two-day workshop was hosted by the Dag Hammarskjöld Foundation.
In this interview, Transform Finance Executive Director Andrea Armeni speaks about the work of the organization, the need to keep actors accountable to the communities they serve, and other major trends in impact investing. The podcast can be streamed online hereor on your podcast streaming platform of choice.
Transform Finance Board Member and Managing Director at Candide Group, Aner Ben-Ami, writes about the inherent flaws of venture capital funding. This approach does not only harm founders, workers and communities, it can also be a poor model for investors. More alternative economic structures need to be created that allow for more equitable distribution of value and wealth. Will Zebra Funds come to the rescue?
Check out this podcast! LIFT Economy’s Ryan Honeyman chats with Regan Pritzker, board member of theLibra Foundation, about strategic philanthropy and impact investing as a whole. A common thread throughout her journey in the field is her personal and professional partnership with Transform Finance.
The Libra Foundation has been a long-term supporter of the work Transform Finance does in bridging the gap between investors and community based organizations and nonprofits. In fact, advisory board members Morgan Simon and Aner Ben Ami have been advising the Foundation on direct investments for several years and helping them filter and identify worthy projects through Candide Group (formerly Pi Investments). Regan also reveals that she's been giving out Morgan's book, REAL IMPACT, as a gift since it came out last October!
For good or bad, what a year it's been, as more crises mean an ever stronger commitment to our work. We have grown our Investor Network to over $2 billion in capital committed to social justice, brought over 30 organizations together for our Institute for Social Justice Leaders in NYC, and begun seminal projects on racial justice in finance and broad-based asset ownership. Thank you for supporting us throughout these milestones and being our partners.
As a part of its year-round explorations into topics in impact investing, last Tuesday Andrea Armeni moderated the SOCAP365 panel "Human Capital: Investing in the Future of Work." Held at ImpactHub NYC, this topic was a natural fit for Transform Finance given our project on the future of work.
Transform Finance has joined over 130 investors asking the banks backing the Dakota Access Pipeline to address meaningfully the concerns raised by the Standing Rock Sioux Tribe around the impact of the pipeline on their territorial self-determination.
"Impact Investing inches from niche to mainstream”, reads the title of an upbeat Economist article to mark the start of 2017. The Economist joins a long list of publications and institutions announcing that impact investing has arrived. And, of course, if impact investing is going mainstream it’s because there are more and more proof points showing that you can ‘do well by doing good'. The water’s fine and anyone can join in without fear of giving up financial returns.
Haiti has been battered by too many natural and human-made disasters, many of which have provoked a strong international response of support. However, most of these interventions, whether by philanthropy or foreign aid, have not achieved meaningful results.
It was with all this in mind that we welcomed an invitation by a group of Haitian activists and entrepreneurs to bring the work of Transform Finance to them. We overcame our general reluctance to engage in contexts that we don’t know well based on the strong support and tireless preparatory work of our Haitian collaborators, Isabelle Clérié, who ran a social business incubator in the country, and Patrick Dessources, who for years has led Root Capital’s efforts in the country.
In a typical private equity fund, a general partner’s (GP) financial compensation is linked to the fund’s financial performance in the form of a carried interest – a percentage of the earnings of the fund. In the context of impact investing, a fund manager promises both financial and social returns, yet compensation is still traditionally tied only to financial performance. This traditional compensation structure leaves out financial incentives for the GP to meet the fund’s stated social impact objectives.
In this issue brief, we explore the reasons for tying compensation to impact and showcase how a few pioneering funds have done it.