Impact Investors and Philanthropists Perpetuate Systemic Racism: The Time To Change Has Come
In a groundbreaking forum on August 6th, 2020, Black leaders and Black entrepreneurs were invited to take the stage where more than 200 predominantly white impact investors and changemakers came to listen and learn about “How the system isn’t broken. It is working for those it was designed for”. Key to this is examining the role and flow of money in economic injustice, a key component of structural racism. The system has an intentional design to keep marginalized communities down and extract from them, explained Rodney Foxworth, CEO of Common Future.
So groundbreaking that in the words of attendees “I just witnessed a historic shift in people’s minds and learned what key things we need to understand in order to get into a deal with a talented Black founder and create a working relationship that can take us all to a successful outcome.” “I was educated and inspired about Black entrepreneurs operating in the food space AND of the ways that funders are disrupting investment in such endeavors.”
As a keynote speaker, Rodney discussed how his work at Common Future is about creating new systems as an alternative by “shifting of power in a way that builds power and wealth for the community as opposed to the wealth holder”. This helps restore, repair, and ensure economic self-determination for marginalized communities that have been extracted from or disregarded for far too long. Rodney stressed that impact investors and philanthropists need to understand marginalized communities such as Baltimore which appear to be dilapidated despite so much brilliance in the community, it has more to do with the system of Anti-Blackness which is a “power gap” that prevents talented entrepreneurs from accessing capital and resources, not an intellectual gap or a talent gap. Funders need to learn to trust the lived experiences of these communities and shift power and capital over to them to decide how best to invest and decide on the solutions needed, something impact investing and philanthropy haven’t done much of. It is time to take action to change these power dynamics of money and invest holistically to enable marginalized communities to thrive.
Kelley Carlise, CEO of Acta Non-Verba, the other keynote speaker, spoke about how even philanthropy continues to perpetuate the system of extraction from marginalized communities in the way they engage with community endeavors they wish to empower. For example, she said that impact metric reporting takes so much time and money, that she often wonders if she is better off not taking the money. Kelly also notes the impact metrics funders with no connection or lived experience with the community come up with, don’t set the community up for success. Her organization instead determines their metrics of success based on the lived experience of their beneficiaries to be more just and empowering. Rodney commented that this type of extractive impact metric reporting is part of that system of extraction and power.
Tanya Holland, CEO of Brown Sugar Kitchen and Kai Nortey, CEO of Kube Nice Cream spoke about how investors and partners try to extract intellectual property from them and often expect their businesses to be profitable already before considering funding them, which is unlike the case for their non-Black counterparts. They also explain that investors discourage them from being involved in the part of the business that gives them the most control and ownership of their own business, which is why Kai says it is imperative for Black founders to have a securities or business attorney early on in their business to look out for their ownership and business interests. Both Kai and Chef Chew, CEO of Better Chew talked about how venture capitalists and impact investors are more interested in building a business to exit from rather than helping them build a business to grow and benefit the greater community that loves and needs their products. Both entrepreneurs have been lucky however to find investors who are willing to invest in their vision but they need access to more capital to expand their successful businesses. Chef Chew explained that given his father was a sharecropper, he understands how current capital systems can be very exploitive and extractive. Rodney, Chef Chew, and Tanya reminded us that the system continues to be extractive of marginalized communities even today.
The forum ended with a panel of restorative funders, giving us hope that there is progress. We heard from Leslie Lindo, Portfolio Manager of the Olamina Fund at Candide Group, where she underscored how her organization works to ensure that capital is used to help build wealth for the entrepreneur and the community they serve as opposed to just for the investor. They ensure the terms of investing are not extractive by shifting expectations of exit and returns and they also evaluate impact alignment of investors so as to prevent more harm and trauma to the community they are looking to serve. Tiffany Brown at Chordata Capital, which funds mainly Community Development Finance Institutions (CDFIs) and loan funds also stressed the need for enlightened investors. Chordata capital takes their funders through a 9-month program to understand the historical development of wealth accumulation and how to repair the damage done to marginalized communities — for example, to look at 7 to 10-year notes instead of short term gains and to lift up the work of other social justice organizations such as RunWay Project and Seed Commons. Jenna Nicholas, CEO of Impact Experience and Partner to Illumen Capital, which is a fund of funds working with investment managers, also underscored the need for long term racial justice work. Illumen Capital ensures a 10-year commitment from the fund managers they work with to overcome racial bias reduction. The Illumen Capital / Impact Experience program helps fund managers go back into history to understand the system of slavery and its modern versions of mass incarceration and police brutality for instance, and also work to build solutions that are guided by the voices of the people most affected on the frontline to ensure racial justice.
The end of the forum panels was followed by a 15-minute breakout session to give attendees an opportunity to ask questions and make comments. It was then followed by a virtual tasting session of food from black-owned businesses — — wine tasting led by founders Alicia Kidd and Mari Kemp of CocoNoir Wineshop and Bar and chocolate tasting by Philip Ashley of PhilipAshley Chocolates. During the tasting Philip also shared the unconscious biases and challenges he faces as a Black man in the chocolate industry.
This unique event was organized by JEDI Collaborative (JEDI standing for Justice, Equity, Diversity, and Inclusion) and Food Funded. It was an attempt to listen to Black leaders’ perspectives before trying to be the “woke white saviors” for Black Lives Matter. Out of the twelve speakers, only two were white, setting the stage for deeper insights from lived experiences.
I had the unique opportunity of being one of three persons of color on the joint organizing committee with Food Funded, myself representing the JEDI Collaborative Investor Task Force (where I am the only person of color). The idea of this event came out of our discussions during the Task Force about how we should respond to Black Lives Matter and we decided it was time to hand the platform back to Black leaders and entrepreneurs to share their own stories, insights, and solutions. This learning and listening event hopes to support the effort of Black leaders and entrepreneurs better.
Verna Myers, Diversity expert says “Diversity is being asked to the party, and inclusion is being asked to dance”. I would add “Equity is being taught to dance and Justice is being asked to lead.” Including “justice” to Diversity Equity & Inclusion (DEI) conversation is hard as it involves recognizing that one dance has been imposed as the winning dance and to be fair it involves relinquishing power and also allowing new dances where others can succeed better to be introduced. But why JEDI? Because Justice, Equity, Diversity, & Inclusion is the right thing to do and it livens up the party for all. Until we understand and have faith that restorative or reparative finance is not only the right thing to do but also benefits everyone, we will not make progress.
The question to ask now is what comes next after having learned from amazing black leaders? What is the call to action? Do reach out to me at laina@angelsofimpact.com to let me know about steps you are taking for restorative finance for racial justice, what has inspired you, and also keep an eye out for the upcoming Food Funded event to get food entrepreneurs funded https://foodfunded.us Do also support Kube Nice Cream’s crowdfunding campaign @ https://kubenicecream.causevox.com/
To watch the full videos of the event the article is based on, check out this link https://foodfunded.us/jedi/
Laina Greene is co-founder of Angels of Impact, an angel investment network focused on investing in community-based enterprises focused on poverty alleviation, gender equality, and responsible production and consumption. This includes community enterprises in ethical handmade products, sustainable agriculture, and tech for good- find out more at www.angelsofimpact.com and www.linkedin.com/in/Laina
