Nonprofit Sector

The Stakes are High. But So is Your Power. Get Out There and Make Some Waves!

October 25, 2018
A blue lake with slight ripples in the foreground and mountains in the distance

From keynote remarks prepared to open the Net Impact Conference in Phoenix, Oct. 25, 2018.

I often joke that the one thing that we have in common as impact investors is that we can’t explain to our families what we do for a living when we go home for Thanksgiving, which is why I’m so excited to be here with you. I can’t bring you all home next month, but for today it’s great to know that when I tell you I lead “Nonprofit Finance Fund” you will say, “That sounds awesome, tell me more” rather than, “That makes no sense. You can’t possibly mix finance and social mission.”

And, to be honest, 20 years ago I was one of those skeptics. I graduated college convinced that making money was a distraction and anyone who pursued a career in finance had sold out to The Man. I believed that the only purpose of business was to make money and the only way to address social problems was to work in the nonprofit sector or government.

So I returned to South Africa, where I grew up, and worked at the South African Human Rights Commission. This was 1996 – two years after liberation and months after a new constitution had taken effect. On paper, we were the freest people the world had ever known.

But in one horrible case the Human Rights Commission investigated, a white farmer had tortured a Black laborer on his farm by stripping him naked, covering him in toxic paint, and leaving him to die on the roadside. And I realized that even if we were free on paper, people without economic power could not realize those freedoms. In that rural South African community, the white farmers controlled access to jobs, to the stores where people bought their food, and the trucks and buses they needed to travel. Whatever my misgivings about greedy capitalists, I knew I needed to learn how the business world worked so that I could be effective in addressing injustices like the one in that rural community in South Africa.

After getting a degree in development economics, I went to McKinsey in order to learn how big business thinks and talks. (Well, that sounded more convincing to the recruiters than, “I need your signing bonus to pay for my wedding.”)

What I found when I got there blew me away. The vastness of the business world astounded me. It was like a bottomless lake of beautiful fresh water extending beyond the horizon. And not just the financial capital but the energy and creativity of millions of talented people.

And yet that immense resource was being squandered as people chased after profit without addressing pressing social issues. It’s as if all that energy and activity in the vast lake was churning below the surface but leaving the surface flat and inert. Almost none of the water was getting to the people on the thirsty shores where it could transform the lives of so many.

We launched the impact investing movement 10 years ago to change that. We know that for-profit investing can be a morally legitimate and economically effective way to address social challenges. We did not discover this. Many people had worked for decades investing in affordable housing, micro-finance, green energy. But by coining the term “impact investing,” we invited all these people to see themselves as part of the same movement to get the resources of the private sector to flow to where they can solve problems that matter.

Antony Bugg-Levine presenting at the 2018 Net Impact Conference. He is standing right of center in front of a textured green background.

You are part of this new movement. That’s why you’re here. So I want to share three rules I’ve learned over the last 10 years about what it takes to unlock resources for impact, to start a ripple in that vast lake.

Rule #1: “Lead from your seat” You do not need to wait until you have the perfect impact investing job to make a meaningful contribution. Zaneta Koplewicz didn’t. She was a 26-year old junior employee working at BlackRock, the largest institutional asset manager in the world, when she helped start an internal working group to promote impact investing there. And six years later, BlackRock has launched an impact investing unit, developed new impact investing products for clients, and its CEO sent a public letter this year to every Fortune 500 CEO demanding they explain what they’re doing to make the world a better place.

Rule #2: “Be tough minded and tender hearted” That’s a quote from a sermon Dr. Martin Luther King gave in Birmingham, Alabama 60 years ago that my friend Donnel Baird of BlocPower turned me onto. What does it mean to be tough minded? Dr. King explained that tough minded people “reject easy answers and half baked solutions.” Impact investors are born when we reject the easy answers and half-baked solutions of those who tell us that the only purpose of investing should be to make money. But increasingly, we must also stand guard against the easy answers and half-baked solutions of those who claim that impact investing is easy, that there is no trade-off between profit and purpose, that investors can solve all the world’s problems and don’t need to work as allies to governments and the non-profit sector.

And what does it mean to be tender hearted? Dr. King explains that it’s simple: it’s to “treat people as people." How many times have you watched at work as people have become something other than people? A unit of revenue on the pro forma income statement? An “FTE” on the expense line in the budget? A customer acquisition target that will get your boss a bonus or the next round of VC funding. Resist those abstractions. Treat people as people.

You may be surprised to find out who some of the most tough minded investors in America are today: the women who run the pension funds for sisters religious – yes, nuns! Starting in the 1970s, they rejected the easy answers and half-baked solutions of investment fund managers who told them it would be reckless to match their investments to their values. And they decided that they should be making investments that uplift the people that all investments affect. So they began making anchor investments in community loan funds. In hundreds of communities around the world, marginalized people are now getting better healthcare, housing, and employment opportunities because of the energy these investments have unlocked.

Rule #3: Balance outrage and optimism Think about your heroes. What do they have in common? For me, people like Dr. King, Nelson Mandela, my grandmother Lydia Levine, shared one trait: They balanced outrage at injustice with optimism that things could get better. There is certainly no shortage of reasons to be outraged these days: racial oppression is becoming more flagrant, climate change is accelerating, sexism is digging in, inequality is getting worse while the influence of the rich on our politics is growing. If you are not outraged, you are too complacent or too naive to be helpful.

But outrage without optimism is paralyzing. If you’re going to make a ripple and move those resources, you have to hold on to hope. There is so much to be hopeful about. And this room shows why. Because we really do have enough resources, money, and talent to solve our social and environmental challenges. We just have to support each other.

Keisha Cash is outraged by the racial wealth gap in this country, the fact that the median African American family has $1,600 in wealth and the median white family more than $100,000. That a recent study in Boston found the median income of a white family is $247,000 while the median income of a Black family is $8. Not $8,000. Eight. And that almost all venture capital investment goes to white, male founders.

But she is also optimistic that getting money into the hands of talented Black entrepreneurs can begin to reverse these inequalities. So she took the risk after business school of starting an investment fund to find and support Black entrepreneurs. She figured out how to get the resources from that lake onto the dry shores that need them.

I am outraged that a country as rich as ours lets so many people suffer unnecessarily. That those who control the fresh water of the lake hoard it. That we are increasingly giving in to the idea that we do not have an obligation to take care of each other. That we are becoming defined by our indifference.

But I am optimistic because I know how many talented and passionate and committed people are doing something about it. Everywhere Nonprofit Finance Fund works, I have the privilege of meeting and learning from them.

One client’s story has particularly inspired me recently. They are a network of nonprofits building a national movement to provide healthy, medically tailored meals to poor people suffering from chronic health conditions. That sounds simple but it’s a quiet revolution of hope that comes from a dark place of despair. In the 1980s, as the horror of the AIDS crisis descended, individuals and then small groups of people across the country refused to let their brothers die hungry and alone. And they found that delivering healthy meals and love measurably improved people’s health. Thirty years later they have taken this insight beyond the AIDS community and now serve people suffering from a range of diseases. And they have proven that expanding this work actually saves money when you factor in the health systems savings. So they’re connecting with health insurance companies and hospitals in creative partnerships to expand this service. One of the leaders of the movement told me: “The best way we can honor our fallen brothers is to bring this beautiful thing that came from their suffering to as many people as we can.”

With leaders like that in every community, how can we not be hopeful?

But here’s the thing about these Rules:

  • If a 26-year-old at the largest investment firm in the world can lead from her seat and start a ripple of capital flowing toward impact, then what’s stopping you?
  • If the nuns, with pension assets far smaller than yours, can be tough minded and tender hearted enough to create ripples of hope with their investments, then what’s stopping you?
  • And if Keisha Cash, a young African American woman without family connections or wealth to fall back on, and the leaders of a community destroyed by AIDS, can stay optimistic and make a ripple of hope, then what’s stopping you?

The stakes are high. But so is your power.

Because, as Robert Kennedy told a group of young activists not unlike you almost 60 years ago, in South Africa, where this journey began for me: tiny ripples of hope, crossing each other from a million different centers of energy and daring, build a current which can sweep down the mightiest walls of oppression and injustice.

So, let’s get out there and make some waves!