The Impact Investing Podcast
By David O'Leary
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The Impact Investing PodcastJun 24, 2020
37 - Accelerating the flow of impact capital
As much as investing for both purpose and profit is in vogue these days, there's still a wide gap between the number of people talking about impact investing and those doing it. The fact that impact capital doesn't flow nearly as freely as traditional investment capital, makes scaling a social enterprise or raising an impact fund all the more difficult.
My guest today is Keith Ippel, CEO and Founder of Spring Activator in Vancouver, British Columbia. Spring Activator works with purpose-driven entrepreneurs at an early stage by providing incubation, acceleration, and investment readiness programming. The organization also works on the demand side of the impact investing equation by helping train impact investors to find and due diligence deals.
Keith founded the organization nearly eight years ago and is still incredibly passionate about building the entire impact investing ecosystem. Keith is a reformed Management Consultant who, after being raised by entrepreneurs, was dragged back into entrepreneurship through the opportunities he was seeing for technology to solve real-world problems. After a successful run leading a variety of technology-based businesses, Keith began seeing the opportunity to nurture the field of impact investing and launched Spring Activator.
During the episode, Keith and I discuss the state of the impact investing space globally and in Canada, what support early-stage social entrepreneurs need to scale their businesses, how to reduce the talk-action gap in impact investing, and how his organization helps investors learn how to become impact investors. And be sure to stay tuned to the very end where Keith discusses his outlook for impact investing over the next decade.Resources from this episode:
36 - Opportunities for impact in the mining industry
Mining is an inherently challenging industry from an impact perspective since it's all about the removal and consumption of the earth's limited natural resources. The manner in which we have historically mined these resources has caused great harm to people, communities, and our planet.
At the same time, our existence (as it stands today) absolutely depends on mining to provide everything from the minerals we use in virtually all of our toiletries (makeup, vitamins, toothpaste, soap, etc.) and the fertilizer we use to grow food, to the metals we use essential to necessities like cars, buildings, roads, mobile phones, and medical equipment.
Plus, mining is a massive industry that contributes greatly to wealth creation for an exceedingly large number of people globally. In Canada, nearly 700,000 people work either directly or indirectly in mining and receive the highest average wage/salaries of any industry in the country.
Since it isn't possible in the foreseeable future to stop mining entirely it seems abundantly clear we need to shift our focus to reducing demand and improving mining sustainability.
Enter today's guest, Elizabeth Freele, Co-Founder and Managing Partner at Sympact Advisory, based in Vancouver, Canada. Liz, is a passionate social sustainability strategist and futurist entrepreneur, supporting everything from pre-seed to mature enterprises in challenging operational environments across the Americas, Africa, Europe, and the Middle East. She holds an MBA from IE Business School, a certificate in Sustainable Business Strategy from Harvard Business School, and a BA in Political Science and Global Development from Western University.
Liz and her colleagues at Sympact work with companies to help improve their social performance to foster both company and community resilience. And given Liz's long background in the mining industry, the organization has quickly established a stronghold there.
In today's episode, I sit down with Liz to flesh out the nuances of the ESG impacts of the mining industry from an ESG perspective and the practical opportunities for improving its sustainability. During the episode, we discuss the state of mining today, just how dependent we are on the industry, the most harmful practices that need to end, how mining companies can do better, and which organizations she sees as leaders in the space. And be sure to stay tuned to the very end when Liz discusses her views on where there is the most opportunity for impact investing in the mining industry.Resources from this episode:
35 - Understanding the impact revolution with the father of impact investing
In a meeting hosted by the Rockefeller Foundation in Italy in 2007, the term impact investing was coined. Yet seven years prior to that, in 2001, Sir Ronald Cohen (just Ronald Cohen at the time) was requested by the UK Treasury to establish the Social Investment Task Force (SITF). The SITF was tasked with exploring the ways in which the UK could create wealth, spur economic growth, and improve the lives of its most vulnerable people at the same time. It was his work here where he and his colleagues developed much of their thinking on impact investing.
Only a year after establishing the SITF, Ronnie (as he prefers to be called) would become Sir Ronnie, not for his work in impact investing but for his three decades of work essentially bringing venture capital to the UK. Ronnie was only 26 years old when he co-founded Apax Partners, a private equity firm that would grow to manage $50B in assets with offices across the globe.
By 2013, then Prime Minister David Cameron asked Ronnie to lead the G8 Social Investment Task Force (G8T) in order to "catalyze a global market in social impact investment." Not long after that he was then asked by the British Government to lead an effort to expand the G8T further globally and resulted in him establishing The Global Steering Group for Impact Investment (GSG) in 2015.
During this time, Sir Ronnie also contributed to creating the world's first Social Impact Bond which aimed to reduce recidivism rates at the Peterborough Penitentiary in the UK. He and his colleague's findings on SIBs were articulated in a now-famous report "Impact Investment: The Invisible Heart of the Markets" which kicked off a movement to spread the idea of impact investing across the world.
All of that amounts to one hell of an impressive career by any standard but especially for a refugee who fled Egypt as a result of the Suez Crisis in the 1950s. At 11 yrs old, Ronnie and his parents arrived in the UK with just a single suitcase each and Ronnie clutching his precious stamp collection in his arms. Therefore, it is my great honour to welcome Sir Ronald Cohen to the podcast.
- Sir Ronald Cohen, Impact: Reshaping Capitalism to Drive Real Change (Ebury Press, November 3, 2020)
- Harvard's Impact-Weighted Accounts Initiative
- Yuka mobile app (deciphers product labels and analyzes the health impact of food products & cosmetics)
- Episode 5 of this podcast where we discuss: "Following the birth of the Social Impact Bonds"
*** Enter our giveaway to win a $500 impact investing prize pack by visiting www.davidoleary.ca/giveaway ***
34 - Addressing the housing affordability crisis with impact investing
Access to safe and affordable housing is absolutely essential to meeting humanity's most basic needs. Housing not only protects us from the elements but provides security and stability that's so important to our physical, emotional, and mental health. Yet even in the world's most developed markets, housing affordability is approaching crisis levels.
For nearly 40 years now - with the exception of a few dramatic market corrections (e.g. in the early 1980s and 2008) - housing prices have soared, far exceeding the asset class's long-term expected returns. For instance, according to The S&P CoreLogic Case-Shiller 20-City Composite Home Price NSA Index, real estate has doubled since 1980. Meanwhile, in Canada, home prices have nearly quadrupled over the same period. The problem is particularly acute in cities like Toronto, Munich, Hong Kong, Frankfurt, Amsterdam, Vancouver, Paris, and Zurich which all top the charts of the UBS Global Real Estate Bubble Index 2020.
As the global pandemic has taken hold, housing prices have only continued to surge in many markets across the globe, furthering the already staggering wealth gap between the rich and poor. Today's guests Garth Davis and Andy Broderick are Managing Partners at New Market Funds based in Vancouver, British Columbia, where they structure high-impact investments that provide affordable housing in vulnerable communities across Canada.
During the episode Garth, Andy, and I discuss just how bad housing affordability is getting, some of the additional barriers vulnerable communities face in accessing affordable housing, the economics of affordable housing, the importance of community-based non-profit partners, and the various ways New Market Funds is tackling the problem. And be sure to stay tuned to the very end when Andy and Garth discuss the opportunities and challenges for the industry over the next decade.
Resources from this episode:
New Market Funds line up:
- Affordable Housing Equity
- Community Real Estate Development
- Community Lending
- Co-operative Enterprise Investment
*** Enter to win a $500 impact investing prize-pack! Entry is free. The deadline is Sept 4th, 2021. Visit www.davidoleary.ca/giveaway to enter!
33 - Challenging the Nobel-prize winning theory that stands in the way of impact investing
In 1952, Harry Markowitz published a now-famous article where he proposed that investors should optimize portfolio expected return relative to volatility. Markowitz helped investors realize that by owning a diverse basket of investments, they could significantly reduce their risk without suffering a commensurate reduction in their expected return. This insight marked the birth of Modern Portfolio Theory (MPT) and, by the late 1960s would come to change how investors across the globe thought about investing. The trouble is, some of the assumptions underpinning MPT are keeping more investors from embracing ESG and impact investing.
Today's guest Jon Lukomnik joins us to discuss his new book Moving Beyond Modern Portfolio Theory: Investing That Matters. In the book, which is co-authored by James Hawley, Lukomnik and Hawley give a thorough accounting of how many of the assumptions underlying MPT are unrealistic or mistaken. For instance, MPT dictates that investors can mitigate systematic risks (the risks inherent in specific investment) through diversification but cannot influence large systemic risks (threats to the entire system) such as climate change or massive geopolitical instability. Lukomnik and Hawley argue that investors can and do affect systemic risks. For evidence, one need look no further than the 2008 financial crisis where investors fueled the rise of Mortgage-Backed Securities and other collateralized securities that eventually threatened to topple the global financial system. Similarly, MPT is wrong to assert that investors cannot mitigate systemic environmental or social risks like climate change. They can. But doing so requires investors to utilize tactics that aren't part of their traditional toolbox (e.g. shareholder engagement, policy & advocacy, etc.).
Jon is well-positioned to write this book. He is currently Managing Director of Sinclair Capital, a consultancy to institutional investors and formerly was a senior city official running New York City’s pension funds where he oversaw $80 billion in assets. He also co-founded the International Corporate Governance Network (ICGN), which now represents investors from 43 countries, overseeing some $42 trillion in assets. Jon has been a board member of public, private and not-for-profit companies. He is a three-time recipient of the NACD’s Directorship 100 award for being one of the 100 most influential people in US corporate governance. He has also been honoured by the ICGN, Ethisphere, Global Proxy Watch and others.
In this episode of the podcast, Jon and I discuss the major arguments from his book including; the importance of MPT; some of the flaws in its underlying assumptions; how the very success of MPT has further undermined the assumptions that underpin it; and why MPT apologists who argue that ESG and impact investing will underperform have it wrong. And be sure to stay tuned to the very end when Jon responds directly to a conversation from an investment podcast where the experts argue that ESG and Impact Investing is doomed to underperform.
ENTER OUR GIVEAWAY - for a chance to win an awesome impact investing gift pack that includes a $250 Patagonia gift card, a 60 mins impact investing coaching call with yours truly, and two great impact investing books (including Moving Beyond Modern Portfolio Theory). Visit www.davidoleary.ca/giveaway to enter to win.
Resources from this episode:
- Moving Beyond Modern Portfolio Theory: Investing That Matters by Jon Lukomnik & James Hawley
- Jon Lukomnik's firm Sinclair Capital
- Ep 124 of the Rational Reminder Podcast with Professor Lubos Pastor
32 - Art activism as a force for impact with Benjamin Von Wong
When we think about impact investing, art isn’t the first thing that comes to mind for most of us. Yet investors have used art to store and grow wealth for millennia. And few of us would deny the incredible power that art possesses to change hearts and minds and to motivate us into action. Who among us wasn’t touched deeply by Amanda Gorman’s spoken word poem, “The Hill We Climb” at Joe Biden’s inauguration earlier this year?
But few of us, artists included, consider carefully how we might use our artistic talents to create, or our capital to finance, art as a force for social and environmental impact. In this episode of the podcast, I sit down with art activist and changemaker Benjamin Von Wong.
Von Wong's work lies at the intersection of fantasy and photography and combines everyday objects with shocking statistics. His work has attracted the attention of corporations, like Starbucks, Dell, and Nike and has generated over 100 million views for causes like ocean plastics, electronic waste, and fashion pollution. Most recently, he was named one of Adweek's 11 content-branded masterminds. He is also the host of the Impact Everywhere Podcast.
During the episode, we discuss how Benjamin chooses causes to tackle, how he conceives of his installations, the logistics that goes into creating them, how he finances his projects, and how he thinks about impact measurement. And be sure to stay tuned to the very end where Benjamin touches on how he thinks about the new world of NFTs which are changing the economics for artists the world over.
Resources from this episode:
- You can reach Benjamin and view his amazing work at https://www.vonwong.com/ or inquire about commissioning him at https://unforgettablelabs.com/
- Von Wong’s art installations that we discuss during the episode:
- Benjamin’s Podcast: Impact Everywhere
- Follow Benjamin Von Wong on Facebook, Twitter, Instagram, Youtube, and LinkedIn.
31 - Impact investing through the eyes of an institutional money manager
I have spent well over two decades working in the investment management industry. For the vast majority of that time, ESG and responsible investing toiled in obscurity and dismissed as the pursuit of impractical idealists. However, in recent years we reached a tipping point and the industry is racing to get in on the action by overhauling its marketing and sometimes even its investment processes.
These days you would be hard-pressed to find an investment manager that isn’t claiming to be incorporating ESG considerations into its processes. And there are plenty of investment managers quick to claim to be doing impact investing.
The trouble is, there’s a big difference between making investments that have an impact (all investments have some impact) and doing legitimate impact investing. The reason so few large money managers are doing real impact investing is because it’s harder, more time-consuming, often offers less liquidity, and doesn’t have the necessary scale.
In this episode of the podcast, I sit down with Andrew Parry, Head of Sustainable Investing and Newton Investment Management out of London, U.K. With roughly $60 billion in assets under management, Newton is a boutique investment management business that is one of eight asset managers owned by BNY Mellon Investment Management. Under Andrew’s leadership, the firm has put responsible and impact investing at the heart of its philosophy and approach.
Andrew has spent his career in investment management across a variety of respected asset managers including Hermes, Lazard Brothers, and Julius Baer, and Baring Asset Management. Parry is also a member of the CFA UK’s Committee for Diversity & Inclusion.
During the episode, we discuss how Andrew sees ESG investing versus impact investing, how he weaves an SDG focus into the firm’s investment process and product creation, the change in demand for responsible investments in recent years, and why he views every business as a de facto social enterprise. We also get into the age-old debate of whether responsible investing leads to lower future returns. And be sure to stay tuned to the very end where Andrew discusses his outlook for the investment industry headed over the next decade
Resources from this episode:
- Newton Investment Management’s Website
- Newton’s Statement of Purpose
- Newton’s Responsible Investment Policies & Practices
- Follow Andrew on LinkedIn
Help make wishes come true for families in need! Become a co-owner of Geenees today for as little as $250 by visiting the Geenees FrontFundr crowdfunding page
30 - A deep dive into gender lens investing with a true OG of the movement
If impact investing requires us to address systemic inequalities, and it does, then you can’t claim to be an impact investor and ignore gender equality. Consider that women, girls and gender-diverse people represent half of the earth’s population and that in virtually every culture across the globe, for all of human history, they have been systematically oppressed. In this episode of the podcast, I sit down with Joy Anderson, the Founder and President of Criterion Institute and a true OG of gender lens investing.
Criterion Institute is a non-profit think tank that works with social change-makers to demystify finance and broaden perspectives on how to engage with and shift financial systems. The core mission of Criterion Institute is to expand the demographic of those who see themselves as able to use finance as a tool for social change. This is achieved by providing resources such as blueprints and toolkits to bring people to the table who normally would not feel welcome. Criterion Institute challenges the structural inequities that create barriers in the finance world, especially as it pertains to women.
Joy’s interest in social change and systems of power was formulated through her experiences in academia during her undergraduate studies and in her work as a high school teacher in the New York public school system. Joy has since worked in finance for 20 years and was listed in Fast Company’s 100 Most Creative People in Business in 2011. In founding Good Capital alongside Timothy Freundlich and Kevin Jones, Joy experienced first-hand the opportunities and challenges involved in impact investing.
During this episode, Joy and I discuss how highly complex jargon creates barriers in the finance industry; the importance of understanding context when moving money to create social good; and the link between increased political risk in investments and rates of gender-based violence. And be sure to stay tuned to the very end where Joy addresses the problem of keeping the finance field binary and the cultural shifts she hopes to see in the future.
Resources from this episode:
- Criterion Institute’s Website
- Criterion’s latest publication: Disrupting Fields: Addressing Power Dynamics in the Fields of Climate Finance and Gender Lens Investing
- Criterion’s Toolkit for Finance as a Strategy for Social Change
- Criterion's Blueprints for Social Change for Women's funds, Grassroots organizations, International Non-Governmental Organizations (INGOs), and Faith-based organizations
- Follow Criterion on LinkedIn and Twitter
- Follow Joy on Twitter and on LinkedIn
29 - The causes of wealth inequality that no one is talking about
This is a special edition of the podcast. It is a recording of live a conversation we had on Clubhouse about the ways in which wealth inequality happens that no one is talking about. It features two guests from previous episodes whose work has some loose intersection points. I was excited to bring them together to discuss this important topic. It was a long episode but well worth the listen!
Jon Shell is Managing Director & Partner at Social Capital Partners, a non-profit organization dedicated to scaling market-based solutions that address wealth inequality. Jon is a former McKinsey consultant and social entrepreneur. Jon was a guest on episode 25 where we discussed the work his firm, Social Capital Partners, is doing pioneering work in financing employee buyouts as a way to increase employee ownership and fight wealth inequality.
Delilah Rothenburg is Founder and Executive Director of The Predistribution Initiative, a multi-stakeholder effort to improve investment structures that share more wealth and influence with workers and communities, provide stronger incentives to invest responsibly, and ultimately address systemic risks including income inequality and climate change. Delilah has worked as a strategic advisor across ESG integration, impact strategy, and stakeholder engagement. Delilah was a guest on episode 27 of the podcast where we discussed the work she is doing with The Predistribution Initiative.
28 - A technology solution for solving the riddle of impact measurement and management
The emphasis of this podcast is the very first word: impact. We’re constantly exploring how organizations and individuals can invest more responsibly, in a way that makes a real difference for people, communities, and the environment.
That sounds simple enough. But when it comes time to measure the impact that an investment has made, that’s where most initiatives fall short. It’s difficult to understand what impact really means, especially with such a wide and diverse set of potential criteria. Some might even call it a riddle.
In this episode of the podcast, I sit down with Jenelle Sobey, the CEO and Co-Founder of Riddl. Riddl is an organization that helps companies and nonprofits of all sizes track, analyze, and share their social and environmental impact data.
One of their biggest goals is to show organizations the many different types of impact, and how they can reach the ones that matter most to their mission. They do this through in-depth software that allows companies to manage their goals, activities, and collaboration all in one place.
Jenelle’s interest in solving social problems started in childhood and led her to study political science in an attempt to solve problems through politics and government. But her work experiences - which range from Academia to Social Entrepreneurship - would lead her to the belief that technology could also be a key lever to drive social impact. It was this belief that ultimately led her to start Riddl with co-founders, Derek Hatchard and Jessica Peters.
During this episode, Jenelle and I discuss how the Riddl software works, what types of companies are currently using it, and the power of industry data in measuring impact. And be sure to stay tuned to the very end where Jenelle dives into the social return on investment calculator they’re in the process of developing!
Resources from this episode:
- Riddl website
- The Riddl podcast
- Follow Riddl on LinkedIn
- Follow Riddl on Twitter
- Follow Jenelle on Twitter
*** Episode Sponsor Info: Help make wishes come true for families in need! Become a co-owner of Geenees today for as little as $250 by visiting the Geenees FrontFundr crowdfunding page. ***
27 - Building better private equity structures and practices for a more equitable world
Private equity can be a wonderful thing. The combination of capital and expertise provided by private equity investors can help companies to grow and create jobs. This is particularly true for smaller and mid-sized companies which tend to be engines of job growth.
But at the same time, traditional private equity structures have contributed to wealth inequality. Not just for executives of the portfolio companies, but for their employees and the communities they operate in.
In this episode of the Impact Investing Podcast, I caught up with Delilah Rothenburg, Founder and Executive Director of The Predistribution Initiative. The Predistribution Initiative is a multi-stakeholder project designed to co-create improved investment structures, particularly for mainstream markets.
Their goal is to share more wealth with workers and communities, incentivize investment teams for environmental, social, and governance (or ESG) integration, and ultimately make sure that systemic risks - like income inequality and climate change - are addressed.
In our conversation, Delilah and I discuss the many challenges within traditional private equity structures, from outsized influence to unfair profit distribution and market instability. Plus, what investment professionals at all levels of the playing field can do to solve them. And be sure to stay tuned to the very end where we discuss how The Predistribution Initiative is exploring new solutions to these traditional private equity issues.
Resources from this episode:
26 - Behind the scenes with an impact fund startup investing in African SMEs
For decades, Sub-Saharan Africa has been a hotspot for foreign investment and international aid. It has also been subject to the kind of philanthropy that is often more destructive than helpful. As an impact investor, it’s imperative to understand what that type of philanthropy looks like and how to avoid it.
Africa has also been facing funding challenges in recent years. Even before the pandemic, the continent was seeing a decline in FDI. In fact, investment flows were expected to drop 25% by the end of 2020. Today, the majority of the available funding is streamlined to large corporations or small microenterprises, leaving a major gap for the companies in between.
So what does it mean to start an impact fund that makes a real impact for African communities? To find out, we sat down with David Harlley, Jonathan Wilson, and Kwabena Owusu-Adjei - the minds behind Third Way Capital. Launched in 2020, Third Way Capital is an early-stage impact fund investing in African small and medium-sized enterprises (SMEs). Their strategy is to invest in financial structures that make lasting change, alleviating some of the funding challenges that African SMEs and entrepreneurs face.
During this episode, we discuss what goes into starting an impact fund. Since David, Jonathan, and Kwabena have all lived or grown up in Africa, we talk about the importance of truly knowing the environment you’re investing in. Plus, how impact investors can identify opportunities and gaps, validate their impact with outcome-oriented measurements, and break the mould of traditional fund structures. And be sure to stay tuned to the very end where we discuss the specific kinds of companies Third Way Capital is looking to invest in.
Resources from this episode:
25 - Leveraging employee ownership to fight wealth inequality
Welcome to episode 25 of the Impact Investing Podcast.
The richest 26 people on earth own as much wealth as the poorest 3.8 billion. The wealthiest 10% control 84% of the world’s wealth. Meanwhile, 4.8 billion people fight for just 2% of the world’s wealth. Reducing wealth inequality is possibly the biggest moral imperative of our time. It also happens to be one of the largest threats to global peace and geopolitical stability.
My guest today is Jon Shell, Managing Director of Social Capital Partners (SCP). Social Capital Partners looks to bring market-based approaches to solving complex systemic social problems like wealth inequality. The organization has tackled a variety of problems through different approaches over the years. What stands out about Social Capital Partners is its commitment to impact. The organization has made numerous radical pivots in its approach over the years, as its staff experiment, test, and learn. For a full rundown of the organization’s fascinating history, listen to episode #01 of the podcast where I chat with SCP’s founder, Bill Young.
In this episode, Jon and I discuss the organization’s latest pivot and the publication of its newest public policy discussion paper titled: Building an employee ownership economy. During our chat, we dive into the importance of employee ownership as a channel for distributing wealth more equitably, the necessary conditions for employee ownership to thrive, and the differences between the Canadian and US environments. And be sure to stay tuned to the very end when we discuss the types of organizations that are well suited to utilizing the employee ownership trust.
Resources mentioned during the podcast
24 - The Purpose of Capital with Jed Emerson
Given the capitalistic societies most of us live in, we spend an inordinate amount of time focused on accumulating, growing, and deploying capital. You could fill a library with all the books dedicated to the what and how of capital. Yet, we devote shockingly little time to considering the why of capital. Much in the same way Simon Sinek asks all businesses to “start with why”, Jed Emerson would like us purveyors of capital to start with why.
In other words, we would be well served to stop and ask ourselves, what is the purpose of capital? With me today to tackle this question is Jed Emerson, one of the impact investment industry’s elder statesmen who literally wrote the book on this topic. In addition to his writing, Jed currently focuses on working with families exploring how to ensure a long-term legacy by managing their full net worth for impact. He also advises investment firms on the implications of an impact investing framework for their practice. He is an internationally recognized Thought Leader in impact investing, social entrepreneurship, and strategic philanthropy.
During the episode, Jed and I discuss his journey through the industry from his early days as a social worker to his current work as a writer and adviser. We also dig into the major themes in his book, The Purpose of Capital including the role of spirituality in impact investing, the role of Western dualism and our separation of self and other, and how Jed’s views have evolved over the years. And be sure to stay tuned to the very end where we talk about what Jed believes we’re getting wrong when it comes to impact measurement and management along with his outlook for the future of our industry.
Resources mentioned in this episode:
23 - Breaking the shareholder primacy paradigm with alterantive ownership models
Welcome to episode 23 of the Impact Investing Podcast.
The idea of discussing ownership and legal structuring of businesses may not sound super exciting at first blush. However, it’s a vitally important topic, especially for impact businesses. The issue founders must contend with is, how do they protect the purpose/values of their business as it grows and brings on new staff, clients, suppliers, and most importantly, investors? Investors are particularly problematic given the prevalence of the shareholder-primacy paradigm which dictates that company executives seek to maximize shareholder value above all else. How do we avoid the pitfalls of Capitalism’s relentless pressure for profit growth from distracting us from our core purpose?
That’s what today’s guest is here to explore with us today. Natalie Reitman-White is Ownership & Governance Design Advisor with Alternative Ownership Advisors. Natalie’s firm is a Stewardship Ownership consultancy that works with impact businesses to think about alternative legal structures that can embed a company’s purpose into its organization structure, governance, and financing.
During the episode, Natalie and I discuss the origins of Alternative Ownership Advisors and how it got its start when Natalie was running an organic food producer and had difficulty finding answers to her questions in pursuit of a more suitable legal structure. We then dive into the details of how Alternative Ownership Advisors helps business owners. We dive into the details of various legal structures, examples of businesses that have utilized them, and discuss how these models solved the challenges of protecting their purpose and values. And be sure to stay tuned to the very end where we talk about the types of businesses that are best-suited for considering an alternative ownership model like a perpetual ownership trust.
You can learn more about Alternative Ownership Advisors by visiting its website or its LinkedIn page. Also mentioned during the show were Natalie’s original sustainable food business Organically Grown and the website The Purpose Economy.
22 - Empowering indigenous innovators & communities
If there is a lesson to be learned for investors wishing to solve real social challenges, it’s that we need to do less talking and more listening. We need to make space for not only a diverse range of views and perspectives but particularly for those with lived experience. Perhaps nowhere is the need for listening and learning more pronounced than when it comes to tackling reconciliation and challenges faced by Indigenous communities.
The vast majority of investment capital is held by those with very little understanding and appreciation for Indigenous ways of knowing and being. And this is problematic because those differences have a profound impact on not only how to solve the challenges Indigenous communities face but, more profoundly, what “improvement” actually looks like. In other words, we can’t be true allies of any group of people if we don’t understand their challenges and desired outcomes.
That’s why putting capital in the hands of those who have been excluded from economic prosperity is so important and why the work that today’s guest today does is so important. Sara Wolfe is Director of the Indigenous Innovation Initiative with Grand Challenges Canada and her work is to provide both financial and non-financial support to drive innovation and social impact that is led by and/or created by Indigenous peoples.
In this episode, Sara and I discuss the broader mandate of Grand Challenges Canada, the birth of the Indigenous Innovation Initiative, the challenges Indigenous communities face, and the forms of financial support they provide to Indigenous entrepreneurs. We also discuss Sara’s fascinating journey that led her to where she is today, including her time spent working as a midwife. And be sure to stay tuned to the very end where we talk about the critical importance of the various forms of non-financial support she and her team provide.
21 - Harnessing the vast untapped potential of newcomers to Canada
Newcomers to even the most welcoming countries, face significant challenges. From language and cultural barriers to finding affordable housing, all the way to the mental health challenges of being alone in a strange new place. And supporting newcomers during this difficult transition is not only a moral imperative but makes compelling economic sense. The better and more quickly newcomers adjust to their new home, the happier, healthier, and more productive citizens they will be.
And while some of these barriers are difficult to solve, some are not. Nowhere is this more evident than the employment barriers faced by highly trained and educated newcomers. Who among us hasn’t been in a cab or an Uber driven by someone who was an engineer or other high-income earning professional back home. This can happen for a variety of reasons but one is that many newcomers cannot afford the necessary certifications/licensing necessary to find employment in their field of expertise.
My guest today is Claudia Hepburn, CEO of Windmill Microlending (formerly known as the Immigrant Access Fund). Windmill is a registered charity that provides loans of up to $15,000 to over 1000 newcomers to Canada each year who are unable to afford the licensing or certifications necessary to find employment in their field of expertise.
In this episode, Claudia and I discuss the challenges that newcomers to Canada face, the types of places and industries newcomers come from and work in, and how the organization’s efforts lead Windmill clients to see, on average, a tripling of their income and a 97% repayment rate. And be sure to stay tuned to the very end where we discuss how the organization utilizes both charitable dollars and impact investment capital to fund all of its amazing work.
20 - How the Equality Fund is using Impact Investing to Fuel Feminist Futures
Most people don’t automatically look to the public sector for the latest and greatest innovations. However, when it comes to the world of social finance, the public sector is, in many ways, leading the private sector. In our last episode, we explored the world of blended finance – where governments are finding innovative ways to use public funds to drive private sector capital into projects that achieve impact. Another prominent example will be discussed in today’s episode.
Today’s guests Beth Woroniuk, Policy Lead, and Bonnie Foley-Wong, Head of Investment Strategy at the Equality Fund join us to discuss the work they are doing to support grassroots women’s movements in the Global South to advance gender equality. What’s particularly interesting about the Equality Fund’s work is both the manner in which it is tackling Gender Equality but also its genesis. The Equality Fund was seeded in 2019 by a $300 million contribution from Global Affairs Canada, in a first of its kind initiative to stand up a new type of entity that could use the government contribution to achieve not only financial sustainability but also catalyze an even larger commitment of private sector investment capital and philanthropic capital.
During this episode, Beth, Bonnie, and I discuss the origin story of the Equality Fund, the problems it was conceived to solve, its granting versus investment efforts, and the unique governance structure needed to organize its audacious approach. We also discuss the organization’s fundraising strategy and how it plans to crowd in private sector investment capital. And be sure to stay tuned to the end where we discuss the practical challenges of actually deploying $300 million of capital quickly.
You can learn more about the Equality Fund at its website and you can donate to support their work by clicking here. You can also follow the organization on Twitter.
You can connect with Beth on Twitter and Bonnie on Twitter or LinkedIn.
19 - Fighting a $200 Billion per year predatory industry using microfinance
Microfinance is an intervention that we usually think of as being valuable in a developing world context. The world is full of hard-working people with an entrepreneurial spirit who lack access to the necessary financing to get a business off the ground. Lending to these entrepreneurs has a host of societal benefits that include creating jobs and incomes for families in their communities, a spike in local economic activity as these businesses purchase local goods and services, and generates tax revenues for local governments to afford additional public services.
So one of the last places you might think microfinance is necessary is in a nation like the US which sells itself on the American Dream; a land of opportunity where anyone can be successful if they work hard enough. But in this episode we speak with Andrew Posner, Founder & CEO of Capital Good Fund who joins us to discuss why even in the US, microfinance is necessary and how his non-profit organization uses microfinance and coaching to combat a $200 billion dollar a year predatory industry that consists of payday lenders, pawnshops, rent to own stores, and subprime lenders; each offering some form of consumer loans at high double or often triple-digit interest rates.
During the episode, Andy and I discuss the challenges low-income Americans face, how race factors in, the importance of coaching in addition to lending to their clients, how COVID has disproportionately affected low-income Americans, and how the Capital Good Fund has adapted its services as a result. Be sure to stay tuned to the very end where we discuss Andy's ambitious plans for the Capital Good Fund over the next 5 years and why the coming US election is so important to those plans.
18 - How Blended Finance is being used to massively scale the amount of capital for impact investments
For all the promise of Impact Investing, the amount of capital flowing into these investments still represents a tiny fraction of the overall pool of global investment capital. There is no single reason for this. However, a meaningful part of the equation boils down to the risk, or rather, the perceived risks of making impact investments. This is especially true when impact capital is financing investments in developing countries.
This is where Blended Finance comes in. In this episode, we're joined by Joan Larrea who is the CEO of a non-profit called Convergence. Convergence was established in 2016 to help support the burgeoning field of blended finance and facilitate more blended finance transactions.
Joan joins us to discuss how a variety of techniques can be used to de-risk impact investments, how that de-risking can attract much larger sums of investment capital, and what conditions make blended finance a viable solution for impact investment providers and investors. For the social finance nerds out there, we get into the specifics of four common blended finance transaction types: Concessional Capital, Guarantee / Risk Insurance, Technical Assistance Facility, and Results-Based Financing. Make sure to stay tuned to the very end when we discuss the trends Joan is seeing and her outlook for the future of this exciting new field.
17 - Around the world of impact investing with Rehana Nathoo
There are few people in the industry I enjoy chatting with more than Rehana Nathoo. As Founder and CEO of Spectrum Impact, and having worked across the philanthropic and impact investing landscape (including BNY Mellon, The Rockefeller Foundation, and The Case Foundation), Rehana's experiences and perspectives are endlessly fascinating. In this episode, we not only chat about Rehana's past work experiences and her most recent work with clients like Ellevest and The Equality Fund, but I also get Rehana's perspective on a range of topics such as: measuring impact, ESG vs SRI vs Impact Investing, the integration of granting and program-related investing, and some of the organizations Rehana thinks are doing really great work.
You can follow Rehana on Twitter or LinkedIn. You can access Spectrum Impact's Impact Investing Toolkit (discussed during the episode) here.
Also, don't forget to get your SoCap20 Virtual conference tickets now (happening this coming October). Normally ticket prices for SoCap are hundreds to thousands of dollars. Early bird tickets for this virtual conference are now just USD $149. The conference agenda is not being released until September. But you can view the conference themes and help curate conference content by voting for your favourite proposed sessions.
16 - Reinventing Commercial Banking for Good
Commercial banking isn’t exactly known for being a warm and fuzzy business. Financial institutions provide a wide range of banking services to businesses large and small. However, existing banks and financial services providers often employ very standardized approaches that don't serve all businesses equally well. This is particularly apparent in commercial lending where start-ups and early-stage businesses, especially those with non-traditional business models (i.e. social enterprises), have great trouble securing financing. In this episode of the podcast, Jay-Ann Gilfroy, CEO of Vancity Community Investment Bank (VCIB) joins us to discuss the challenges in traditional commercial finance and how VCIB is inventing a kind, more purpose-driven approach. During our conversation, we also discuss VCIB's recent acquisition of CoPower (be sure to listen to episode 11 from last year where I discuss CoPower's green bonds with Trish Nixon), and the launch of VCIB's newest impact investment, the Unity GIC.
Also, don't forget that the Responsible Investment Association's annual conference is coming up, June 8 - 12th. You can register at www.riaconference.ca.
15 - The best social return on investment? The case for delivering micro nutrients during the first 1,000 days of life
Jeff Baikowitz of Motherfood International and Melani O'Leary of World Vision Canada, join us today’s episode. Jeff is the Founder of Motherfood which has developed a particularly interesting model to bring great tasting, low cost, fortified foods to pregnant and lactating moms to address a hyper-critical period for babies and moms known as the first 1,000 days of life. Meanwhile, Melani O'Leary is a Nutrition Technical Specialist with World Vision Canada. In her work, Melani has responsibility for how World Vision Canada's programs are designed and implemented to improve nutrition outcomes for some of the world's most vulnerable people in regions like Latin America, The Middle East, Asia, and Africa. Jeff and Melani join us on the podcast to discuss the critical importance of the 1st 1,000 days of life and why it potentially represents the best social return on investment one can make, how Motherfood is tackling this issue by working in communities to design fortified foods palatable to local tastes, how it is creating opportunities for women to sell these foods local to improve distribution and provide them an income opportunity, and how World Vision is leveraging its expertise, local presence, and community relationships to expand this model.
14 - Pioneering high-impact investments that create opportunity for the world's most vulnerable people
I decided to flip the script for this episode and give listeners a glimpse into what I'm passionate about and the work that I do. My friend and colleague Anne-Marie Vettorel takes over as host. During this episode, we discuss my origin story, my early career in the investment industry, some embarrassing confessions (warning: you may learn more about me than you want to know) before we diving deeper into my work as Founder of Kind Wealth and as Managing Director of Origin Capital. This is an expansive conversation that covers a wide range of topics all the way from how and why the financial advice industry in North America is broken to the challenges of measuring impact while working in the least developed countries. We cover a lot of ground in a short period of time, so buckle up!
If you’re interested in learning more about Kind Wealth, you can check out the website or follow us on Twitter, Facebook, or Instagram.
If you're interested in learning more about Origin Capital, subscribe to the Good Money podcast! Or check out our website and sign up for our newsletter, or follow us on Twitter or LinkedIn.
13 - Revitalizing the Indigenous economy by investing in Indigenous entrepreneurs
Jeffrey Cyr of Raven Indigenous Capital Partners (RCIP) joins us for today’s episode. Jeff is Managing Partner at RCIP; Canada’s first Indigenous financial intermediary. Its mission is to empower Indigenous entrepreneurs with the capital and expertise they need to succeed. Jeff joins us on the podcast to discuss how RCIP is making transformative investments that can generate positive financial returns while revitalizing Canada’s Indigenous economy. During the podcast, we discuss a wide range of topics including the firm’s quest to raise $5 million for its newly launched demonstration impact fund, why an Indigenous lens is needed, and how Indigenous ways of knowing and being tend to make Indigenous impact investing inherently more sustainable.
During the episode, we referenced the book Decolonizing Wealth by Edgar Villanueva.
Episode Sponsor: This episode was sponsored by the Certified Professional Impact Analyst (CPIA) certification at Queens University. If you’re serious about upping your impact measurement & management skills visit www.cpia.queensu.ca.
12 - Serving high net worth individuals, foundations, and institutions
Upkar Arora of Rally Assets joins us for today’s episode. Upkar is Chief Executive Officer at Rally Assets; A full-service impact investing firm helping investors align their investments with their values. Rally is a new brand but has a rich history in the impact investment space in Canada under previous ownership under the name Purpose Capital. The firm’s new owner, Upkar Arora, joins us on the podcast to discuss how he’s transitioning Rally Assets from a consulting service provider to a full-service impact investing firm that is now able to fully manage client assets. During the podcast, we discuss a wide range of topics including Rally’s principle of “progress not perfection”, the journey to becoming a full-service provider, and how Rally Assets measures its impact. And be sure to stay tuned until the end where we hold a mirror up to our industry and discuss potential unintended negative consequences of impact investing.
11 - How to profit off the transition to a low carbon economy
Trish Nixon of CoPower Inc. joins us for today’s episode. Trish is Managing Director and Head of Capital at CoPower Inc.; an online platform allowing Canadians to access impact investments that will help accelerate the transition to a low carbon economy. Sadly the impact investment space right now is predominantly populated by private investments which are accessible only to wealthy Canadians. What’s particularly exciting about CoPower is that they an early leader in democratizing access to impact investments in Canada. During the podcast, we discuss a wide range of topics including how CoPower got its start, how its Green Bonds work, what’s holding impact investments back from reaching a mass retail audience, and the dirty secret in Canadians’ investment portfolios.
If you’re interested in learning more about Trish, you can follow her on Twitter. Learn more about CoPower’s Green Bonds here. And if you’re interested in CoPower report we discuss at the end of the podcast, it’s called “The dirty secret in your investment portfolio”.
10 - Challenging traditional philanthropy
Sharon Avery of Toronto Foundation joins us for today’s episode. Sharon is President & CEO of Toronto Foundation (TF); one of the 191 community foundations across Canada which holds nearly $500 million in assets. As a community foundation, Toronto Foundation is a charity but not a cause. It exists to contribute time, leadership, and money to support communities and causes across the city to make Toronto a better place for everyone. Toronto Foundation has made early forays into impact investing in affordable housing projects and recently just launched its first social investment fund. During the podcast, we discuss a wide range of topics such as how Sharon wants to redefine Philanthropy, the value of diversity and lived experience, TF’s ground-breaking Social Capital report, and it's brand new social investment fund.
If you’re interested in what Sharon has to say, you can follow her on Twitter. You can view the Vital Signs reports for any of the community foundations here and you can access Toronto Foundations Social Capital Study here.
Episode Sponsor: World Vision Canada
The Social Innovation Challenge, by World Vision Canada, is being held Wednesday June 19th at 6pm at Art Scape Daniels Launch Pad at 130 Queens Quay East, Toronto, Ontario. Learn more here. To join the event, register here.
9 - Canada's New $800 Million Social Finance Fund
8 - Making investments that align with your values
Tim Nash of Good Investing joins us for today’s episode. Tim is Founder at Good Investing; a fee-only service helping Canadians invest their own money online in a sustainable manner. Tim is also a blogger who runs The Sustainable Economist. In this episode, we discuss how Tim coaches clients to take control of their investments and align them with their values. During the course of the conversation, we discuss some fascinating topics such as whether you need to sacrifice performance to make socially responsible investments, Universal Basic Income, and the environmental and social impacts of lab-grown meat.
7 - SDG Kicks: Creating decent work and economic growth through shoe manufacturing
You can find Oliberté at www.oliberte.com and you can follow Tal on Twitter or LinkedIn.
6 - Starting an impact fund: The journey to raise and invest $10 million
In this episode, David is joined by Mike Winterfield. Mike is Founder and CEO of Active Impact Investments; an impact investment fund that invests in early stage, for-profit, businesses looking to make some sort of environmental or social impact.
On the podcast we discuss the exciting journey Mike is on as he is quickly approaching his goal to raise and invest $10 million for the firm’s first impact fund. Mike was previously President of Randstad Professionals, a division of Randstad Canada, a leading recruitment and HR services firm with annual revenues in excess of $300 million. Mike also was COO and later President of Traction on Demand, a developer of cloud-based technology solutions.
During the episode we discuss Mike’s awakening moment, how his bad dreams have played into an abrupt career transition toward impact, the trials and tribulations of starting an impact fund, and the fund’s first two investments: GoJava (which provides coffee for offices where they recycle all the coffee pods) and Keela (which provides software solutions that drive efficiencies for small and medium size non-profits).
5 - Following the Birth of Social Impact Bonds
4 - How a Moneyball approach to venture capital may change the world
3 - Finding growth opportunities in Latin America while impacting SDGs
2 - An agency helping brands purpose with profit
1 - How Bill Young's painful failures ultimately magnified his impact
This is a longer episode but it's worth listening to every minute!
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