Less than 100 per cent is not enough

Sonja Swift

‘Only when the last tree has died, and the last river been poisoned, and the last fish caught will we realize we cannot eat money.’ Cree Indian proverb

My generation and those to come are inheriting a precarious future. Peers of mine, all young trustees of the Next Gen Fellowship in Mission Investing,[1] are also inheriting the responsibility of stewardship for money set aside for social good. Our goal is to have 100 per cent mission-driven endowments because anything less is ultimately a contradiction.

When I asked my peers how philanthropy must change to address the challenges of our times, the replies all centred around one thing. As Justin Rockefeller puts it: ‘Foundations need to put their money where their mouths are in relation to social and environmental change by shifting their focus from the 5 per cent – grants – to what they do with the much louder and larger 95 per cent: their endowments.’

In other words, conscious investing, not just grantmaking, must become integral to philanthropy. Lindsey Franklin shares a perspective common to our generation: ‘The amount of grantmaking dollars we have is no match for the scale of the problem.’ As Richard Graves points out, foundations and university endowments are the institutions designed to exist longest in society. Ironically, ‘while the concept of an endowment is to sustain into perpetuity, people don’t invest like there is a future.’

With the rapid changes the earth is undergoing, we know there is no option but to take corrective action now and yet we are often stifled in doing so. The worldwide Occupy protests signal the fact that young people face an uncertain future which they have few opportunities to help change, and those of us navigating the field of philanthropy have noticed the same constraint. There are few young trustees in leadership roles and the older generation is not quick to pass on real decision-making power. They may be passing on money to their children but they are not passing on the commons: clean drinking water, fertile topsoil or plentiful marine life. Instead, fracking for oil is currently exempt from the Clean Water Act,[2] we are losing 5 to 6 million hectares of topsoil annually[3] and if global climate change is not quickly reversed the oceans are at risk of dying.[4]

Growing up with Google Earth

Our generation has a culture more globally connected than ever before. ‘When you grow up with Google Earth it is harder to feel separated from the rest of the world. Environmental problems and other countries don’t feel so far away,’ remarks Graves. Young people are more interested in collaborating than maintaining control. We believe grantmaking and mission investing strategies should be integrated. This is a fundamentally different approach to that of traditional philanthropy. As we are inheriting the results of traditional philanthropy, if the older generation is not responsive now it is going to be harder for us to be strategic later on.

No time for dabbling at the edges

Traditional philanthropy, with its 5 per cent payout, is clearly not sufficient, nor is mere dabbling in mission investing. The systems-wide restructuring that is required will not happen unless at scale. Mission investing must get beyond niche boutique firms. To give an example of how making this transition relates to philanthropy, Franklin explains: ‘Grant money can help support early stage entrepreneurs. Impact dollars could then go to the growth and scaling.’

Foundations are taking an important step towards aligning mission with values in moving cash from corporate to community banks but it is just that – a first small step. They can play the unique role of building up innovative triple bottom line business models so pension funds and public capital can take these alternatives to scale. Philanthropy can also set the precedent whereby, for example, decentralized community-operated wind farms are prioritized over centralized corporate operations. ‘Eventually the goal would be that this is called investing, not “resilient” or “impact” investing, just investing,’ states Rockefeller. The goal we share is a coherent approach under which our future is not compromised to make an extra buck. It has become impossible to pretend the earth’s resources are infinite. Everywhere one looks they are being exhausted. There is no more time for compromises and greenwash solutions.

Towards an economy that serves society and the ecosystem, not vice versa

The mentality of Wall Street is adolescent. The economy has been cut from the root of all wealth: a healthy earth. This is why our enthusiasm for mission investing is less concerned with economics and more with how economic restructuring can create real solutions. ‘A really good investment is one where the way a company delivers the social good is really aligned [with the social good]. It’s not what they do; it’s how they do it,’ explains Richard Graves. Take the example of Pepsi, a company premised on corn syrup, obesity and plastic, which has a socially conscious board of directors that supports higher wages and union contracts. Investing in Pepsi, and mega companies like it, is not resilience investing. Mission investing must take on a systems-level approach where social good is not a hastily added veneer, but integrated into each step along the way.

Two companies that represent resilient investments in my eyes are Native American Natural Foods (NANF) and Guayaki Yerba Mate. NANF produces buffalo-based health food products and Guayaki markets organic yerba mate. NANF is a Lakota-run business founded on the Pine Ridge Indian Reservation in South Dakota, while Guayaki partners with farming communities in the Atlantic rainforests of Paraguay, Argentina and southern Brazil. Yerba mate is a native rainforest crop and traditionally revered as a sacred plant, so harvesting mate goes hand in hand with reforestation. The last time the Lakota people truly had a functioning economy, it was based on the buffalo, when the health of the people, the buffalo and the prairie were one. Today, NANF is trying to recreate a modern buffalo-based economy. Both business models were inspired by and depend upon healthy landscapes and communities. These are examples where the integrity of ways of life, ecosystems and a new economy meet.

Alternative investing that accounts for more than the bottom line is nothing new but ‘it feels like younger people are an influx of inspiration giving fuel to old ideas’, as Lindsay Franklin comments. Turning the critique from capitalism itself to how capitalism is functioning opens up doors to more tangible economic change. ‘There is incredible synergy in challenging how the economic system works rather than challenging it in and of itself,’ stated Richard Graves. For many, this is a chance to let go of shame attached to companies that built their wealth on extraction and exploitation, wherein lie the root of most of the earth’s cultural and ecological devastation. Owning up to the corporations we own, as stockholders, and admitting our responsibility is a way to honour our legacies. In this way it is empowering.

Applying the concept of resilience to investing carries with it the notion of stewardship. If foundations actually believe that the next ten years are critical for addressing climate change and protecting the security of the earth then, as Graves concludes, we’d be doing two things: ‘Investing in groundbreaking climate solutions or spending down. We need both.’ Young people are inheriting the consequences of an economy that does not take future generations into account. Call us radical but I’d say our agenda is altogether sane. We want to take responsibility as stockholders instead of remaining submissive and perpetuating a financial system premised on fear, scarcity and finite resources. We need the older generation to hear us, trust us and work with us. It is high time to live and act coherently as stewards.

Healing our families, our communities, our planet and ourselves

Call it what you like, mission, impact or resilience investing is about transforming our economic system so it becomes more socially just and more respectful of ecological limits. It is about creating a more resilient economy by creating a more resilient world. The vision I hold personally is that this is a chance to heal our relationship with money by becoming true stewards of monetary wealth. Stewardship is about considering the whole of life and our whole response to it. To do so, one must have enough integrity to distinguish between what is life-giving and what is compromising of the future. Whether intentionally or not, our ancestors made money often to the detriment of communities and ecosystems. It is our responsibility, as trustees young and old, to use it now for healing: healing our families, our communities, our planet and ourselves.

Please listen to us. We are open to change because we know there is no other option. From our vantage point, it is apparent that a more brave and holistic approach is needed to create a future resilient enough to last.

1 A one-year intensive peer-to-peer learning programme for trustees and individual donors seeking to align their philanthropic mission with the management of their assets, organized by Confluence Philanthropy and co-sponsored by Resource Generation.

2 http://www.cleanwater.org/page/fracking-laws-and-loopholes

3 http://www.wri.org/publication/content/8426

4 http://www.bbc.co.uk/news/science-environment-13796479

Sonja Swift is an organizer in philanthropy/mission investing. Email sonjaswift@gmail.com

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