Total Impact Summit 2022 Convenes 300+ Local & National Impact Stakeholders
OVERVIEW: TOTAL IMPACT SUMMIT 2022
Total Impact Summit 2022 convened 300+ thought leaders and practitioners from across the United States on May 16–17, 2022 in Philadelphia. The two-day event featured 75+ speakers across 25+ sessions, connections, conversations, insights, and best practices at the forefront of a growing impact investing field. The summit was hosted by ImpactPHL, in partnership with SOCAP Global and with the support of dozens of partners.
>See speakers, agenda, and partners at impactphl.org/ti22.
>Read on for an event recap, written by Heather Van Dusen.
COVID, Climate Change, and Racial Justice Highlight the Growing Need to Align Financial Assets with Values and “Shift From Rescue to Resilience”
On May 16–17, 2022, ImpactPHL convened 300+ investors, foundations, family offices, asset managers, and thought leaders at Total Impact Summit, for two days of reflection, connection, and discussion of concrete next steps to accelerate the growing impact investing community in Greater Philadelphia and beyond. The content themes of climate and health innovations, impact and regenerative investing, investing in place, racial and economic justice, reimagining new economies, and highlighting current investable opportunities led to conversations highlighting how far we’ve come vs. how far we’ve yet to go; the tension between a ‘just do it’ approach vs a ‘take the time to do this right, and therefore slowly’; and how the roles of asset managers and other financial intermediaries must shift from a practiced neutrality to one of proactive engagement.
The core theme heard throughout was the need to keep expanding the movement and using the power of finance to address the racial, economic, climate, and other systemic problems that “business as usual’ capitalism has created — and how driving capital beyond ‘traditional’ investments and directly into our local communities is a critical step. Amy Cortese from ImpactAlpha opened Day 2 with an observation that we tend to worry about local economies only after a crisis, like the 2008 recession and during the pandemic, but then we forget about it…until the next crisis. “In order to build resilient local communities, we need to shift our mindset from “rescue” to “resilient.” This is how to avoid crisis mode altogether,” she said, underscoring the need to include place as a criteria for how we evaluate and prioritize our investing decisions.
Together in person for the first time after a pandemic and a national uprising around racial justice, the Summit highlighted ImpactPHL’s commitment to racial equity and the concrete work being done as a result of collaboration in the local ecosystem. Half of the speakers were BIPOC and more than half were women, in an industry that is overwhelmingly run by white men. In fact, 98% of all asset managers are white men, a stat that came up several times throughout the two days, yet Lisa Hayles of Trillium Asset Management pointed out that this was the first time she was on an all-Black panel in her career. That panel, a conversation on divestment vs advocacy with Hayles and Yusuf George of Engine No 1 debated how to best engage the biggest companies and funds, as George argued that ‘divestment is disengagement’ and encouraged investors to actively leverage their position as shareholders. Hayles noted that while Trillium has led significant changes at some of the largest companies through their shareholder advocacy work, they have also chosen to divest when companies’ core products run counter to their clients’ values.
Highlighting Different Approaches
Time and again panelists reflected that we don’t need to tweak the current system; we need fundamentally different approaches so that we can reach fundamentally different outcomes. Jackie Khor of Social Finance, who helped coin the term ‘impact investing’ back in 2007, suggested that people who usually consider themselves as ‘gatekeepers’ to capital should instead shift their perspective to being facilitators and curators of capital, to create intentionality with investments such that they include social priorities in addition to financial returns. During a well-attended panel focused on the overwhelming data supporting the call towards DEI investing, Erika Seth Davis of Rhia Ventures recommended the Due Diligence 2.0 framework that enables investors to evaluate investment opportunities using different criteria altogether, eschewing the ‘standard’ slate that simply perpetuates the status quo. She makes a compelling case on the move: “Far from less rigorous, Due Diligence 2.0 is actually more rigorous because it forces you to examine your own process and assumptions.”
First Step Staffing was featured as an example of collaboration and how intentional investments can catalyze significant social outcomes in a local economy. The staffing agency specializes in employing formerly homeless and/or incarcerated and has paid out more than $62 million in W-2 wages since 2018, when it established itself in the Philly market. But none of it would have been possible without investors thinking about more than financial returns.
First Step Staffing received some initial grants from the Barra and Fels Foundations, PRIs from the Scattergood and Patricia Kind Foundations, and then investments from local CDFIs and a number of local impact investors from Investors Circle. One of their early investments was from Untours Foundation, a result of their board president seeing First Step Staffing’s presentation at the 2018 Total Impact Summit. First Step Staffing’s update at Total Impact Summit highlighted what’s possible when investors seek impact with their investments and was the perfect segue to the Impact Investment Showcases, which highlighted current investable opportunities that have impact in the Philadelphia region (listed below). What outcomes might we hear about at a future Total Impact Summit?
We’ve Come So Far — and Yet Have So Far to Go
The Total Impact Summit kicked off with a tribute to Harry Halloran, a thought leader and catalytic funder of B Lab, ImpactPHL, SOCAP, and more, providing a heart-warming reminder that we’ve come a long way as an impact investing community. It’s crucial to highlight this progress as we then dove into the mountain of work still ahead of us during a thought-provoking panel featuring Della Clark of the Enterprise Center, Morgan Simon of Candide Group, Anna Snider of Merrill Lynch, and facilitated by Jay Coen Gilbert of Imperative 21. It served as a stark reminder that too often people think in terms of tweaking the status quo, instead of questioning its foundational assumptions. Simon called out that so many of the current assumed factors for whether a company or fund is investable (are the partners working full-time yet, have they managed a fund before, what does their credit look like) come from a system that advantages entrepreneurs and fund managers from white, wealthy backgrounds. Coen Gilbert was pleased to announce that BlackRock’s new proxy voting guidance is supportive of benefit corporation governance, yet balanced that with the reality that 92% of equity wealth in the US is owned by white households, meaning that even if the impact investing space succeeds and we create wealth for ‘the shareholders’ through impactful investments, we will inherently increase the racial wealth gap. Clark called out that ‘you can’t program your way out of low wealth’ and expressed frustration at the continual idea of funding workforce development programs rather than direct investment in entrepreneurship and in communities.
Snider reminded us that while many in the impact space tire of making the business case, the vast majority of the financial system still needs to hear that case and to be able to rely on it when they’re trying to make change happen in the systems where they operate. Thankfully the business case is there, in spades. During a later session Patience Marime-Ball, author of the new book The XX Edge, shared that involving women in investment decisions isn’t just the right thing to do, but the smart thing to do because gender-inclusive teams are 21% more likely to outperform single-gender teams in profitability. Throughout the two days there was almost continual sharing of similar stats, stories, and frustrations showing that while the impact investing space is growing and making real changes, it still remains on the margins of ‘mainstream’ finance. And despite the data, evidence, and research showing a desperate need for change, “mainstream finance” continues to follow its traditional practices.
Just Do It vs Do It Right
One of the most difficult questions to answer is how to move forward quickly and at scale while making sure that the process is itself positive — and at least does not inflict additional harm. One panel explored the latter exclusively, as Sylvester Mobley of Plain Sight Capital, Emile Washington of 10Seven, and Aaron Walker of Camelback Ventures showed how ‘standard’ financial due diligence can actually create financial and emotional trauma.
This tension came up again and again in the impact metrics panel led by Shivam Desai of BlueMark and Lindsay Smalling of 60 Decibels. They’ve heard so many times from clients that investors or funders demand that practitioners ‘just start measuring their impact’ as if it were simple. Yet how do you measure impact in a way that’s useful, comparable, and still captures the unique value-add of a nonprofit in Kenya vs a for-profit in California? Who is going to be doing this impact measurement, finding the data, tracking it, and how are they getting paid? How does that impact financial measurement and reporting, if at all? Desai pointed to frameworks like the Operating Principles for Impact Management and the B Impact Assessment as available tools, but cautioned that not all frameworks are relevant to every enterprise. He and Smalling decried the lack of frameworks at all for most project- or real asset-based work. A key takeaway here is that impact measurement is work, and therefore needs resources behind it. Funders or investors who demand or expect it should also expect to see budget lines for those resources so that the very act of measurement doesn’t take away resources from the actual programs or enterprises that are making the impact.
Perhaps the poster child for this question, The Alliance for Health Equity, shared how they’ve handled this as they had their ‘aha’ moment at the Total Impact Summit in 2018 and have been on their journey towards mission-aligned investing ever since. That one revelatory moment that was originally focused ‘just’ on the investing piece led to a 360-degree strategic planning process that has spurred a full organizational rebranding (they had previously been the Brandywine Health Foundation), the development of a mission-aligned investing policy, an in-depth board education process, a $1MM impact investing carve-out from their endowment, a commitment to increasing that carve-out significantly until it becomes their default approach, and more. Their story highlighted the importance of peers and support along the way as they cited the need for the conversations at Total Impact and their mission-aligned investing cohort at the Philanthropy Network. President and CEO Vanessa Briggs closed with the thought that while it can be frustrating to go slowly, that she understands all the questions on why it’s been four years and they’re still ‘only’ working on ‘just’ the $1MM carve-out, that it’s been crucial for the Alliance to ensure they’re implementing lasting, foundational changes in how they approach their investments and the communities they serve.
Take a Stand — Or Lose Your Clients
Many investment advisors and other service providers have seen themselves as neutral, even definitionally so — that an advisor must remain neutral on something like values investing so that they can provide impartial advice to their clients. Eric Stephenson and Rahima Jamal from Align Capital, Brett Wayman from Envestnet, and Monique Aiken from the Investment Integration Project smashed that idea into pieces during two panels on how the broader financial services ecosystem is changing and how firms of all kinds must proactively integrate ESG, values-based, and impact investing into their platforms — or risk losing their clients to those who will. They referenced Morningstar research that suggests that there’s a difference between what investors value from their advisors and what advisors believe investors value, and the ‘great wealth transfer’ to Millennials and specifically millennial women, who are almost infinitely more likely to want to align their investments with their personal values. In fact, Ernst & Young has reported that as many as 70% of women and millennial/Gen Z investors will likely fire their family’s advisors as trillions in wealth transfer come their way over the next decade.
Stephenson, Jamal, Wayman, and Aiken all emphasized that taking this proactive approach, along with internal evaluations of their own values and conversations with clients about theirs, will build deeper, more meaningful relationships that will lead to both financial and social returns. In a decade it will no longer be enough to be able to research impact investing trends, benefit corporation governance, or impact measurement tracking systems that integrate with financial accounting systems only when a client asks for it; these will be core competencies necessary to retain clients, let alone earn them.
What’s Next?
More than anything else, the goal of the Total Impact Summit and ImpactPHL’s work more broadly is to empower investors and others who control capital to take the next concrete steps towards a more inclusive, sustainable, and resilient economy. There’s a lot to celebrate, a lot of work to be done, and no time for neutrality. We can do the work right if we do it together. Invest, learn, connect in your community — and finance the world we want to live in!
TOTAL IMPACT SUMMIT 2022 — A SNAPSHOT
PHOTOS
View moments from Day 1 & Day 2 of the Total Impact Summit 2022.
MEDIA
See coverage of the summit by national and local media outlets.
Overheard at Total Impact: Diversify decision-making and shift power to communities
Total Impact Summit: 5 takeaways for impact investors
