Investing in Racial Equity – Digital Conversation Series
BY Casey hall
The series is a partnership between Net Impact and Robert F Kennedy Human Rights. (https://www.netimpact.org/programs/racial-equity). Here is my summary and reaction to the Feb 28th call, lead by Nadia Brigham (Brigham Consulting) & Ellis Carr (Capital Impact Partners).
Ellis described the turning point for his organization’s focus on aligning capital justice and equality. It was actually after Capital Impact Partner’s best year in terms of quantitative impact in 2018, that he
came to the realization that the work was doing good, but after taking a step back seeing that it wasn’t specifically targeted to the communities that were suffering. Ellis described this as “calling that to question in a moment of celebration.” I find this so admirable for an organization to be humble and open about flaws. It reminds me of a situation at a healthcare nonprofit I learned of recently called the Camden Coalition for Healthcare Providers in Camden, New Jersey. After years of great press about pioneering their core care coordination program, a recent MIT study returned somewhat disappointing results on it’s effectiveness. But the Coalition has owned the results, learned from it, adjusted it’s mission going forward, and even blogged about it (https://camdenhealth.org/the-camden-core-model-rct-shows-us-a-path-forward-for-complex-care/). But back to Capital Impact Partners: to address the gap in racial equity that they realized they hadn’t been addressing, they started an Equitable Development Program. In Detroit, their portfolio of real estate developers were not people of color or from the area, but the developers they had been partnering with had capacity and expertise. So the work was affecting Detroit at-large, but not impacting community and generational wealth. Perception of inexperience and lack of capital lead was leading the colored communities to not being funded. So the program took inventory of the assets (the developers themselves) that already existed in the colored community and partnered with them to provide partnership, mentorship, and capital. Real estate development is a significant driver of wealth in this country and Nadia points out that the United States has historically left colored communities out of real estate, ownership, capital, etc. It’s important to call this out, look at your portfolio and reallocate assets to address it. To tackle racial equity, it’s important to learn the history in order to create a plan to combat it.. Federal policies have historically excluded African-Americans and led to them being considered an at-risk group to take on investments. It’s important to form a common language around the issue. A significant systems-level challenges is that capital that mostly comes from large banks and is given considering traditional credit criteria tends to exclude colored communities. Banks Community Reinvestment act requires banks to invest in places they have a footprint, but conditions can sometimes keep it from colored communities. Capital Impact Partners created a Fixed-income investment vehicle that gives individuals opportunities to invest in and support their racial equity programs. They are S&P rated as an “A.” Super cool concept in my opinion! Check this out for more info: https://www.capitalimpact.org/wp-content/uploads/2019/08/Capital_Impact_Partners_Investment_Note__FS_Public.pdf. These are amazing opportunities for people like you and I. I know Calvert Impact Capital offers similar Community Investment Notes. Any similar Notes that anyone has experience investing in? Comment on it. I’m going to look into how easy it is to invest in these as an individual and research some options.