Systemic Racism During COVID-19: Impact Investing & Philanthropy’s Role

Lynne Hoey
Candide Group
Published in
8 min readApr 24, 2020


Since the 2016 election, there has been a pivot in philanthropy and impact investing towards equity to the point that the term “racial equity” has become something of a new buzz phrase. Many of my financial activist friends and allies have been asked repeatedly (and sadly, often without compensation for their time) to share their personal and professional stories in working in racial and social justice; specifically, what it takes to implement real change. Over the last several days, cities have reported data evidencing racial injustice within the healthcare system, as Black and Native people die from COVID-19 in disproportionate numbers compared to their white counterparts. As Managing Director of Olamina Fund — Candide Group’s $40m loan fund designed to address historic capital barriers in marginalized communities — these facts are appalling yet unsurprising. The inequity of coronavirus’s impact mirrors the inequity we’ve long witnessed in the financial and health systems. For impact investors and those in philanthropy who have been wrestling with the question of how to do racial justice work, now is your moment to act.

Racism by the numbers.

COVID-19 is compounding the impact of societal racism as each system — be it healthcare or economic — reaches its breaking point. These systems were not designed to benefit all Americans. They were set up to benefit a small segment of Americans; i.e., white, male, and wealthy. I would argue that not only were the systems designed to be exclusionary, but they were also set up to intentionally extract resources and then disinvest in the communities where people have always been deemed expendable.

If we look at the Deep South, our Olamina Fund partner Hope Credit Union asserts that there are 72 counties without a single ICU bed in its region. Those counties are home to more than 1 million Black people. These are also counties where the racial wealth gap is magnified. In short, if Black people lose their jobs or get sick, they are unlikely to have the financial resources to manage through COVID-19. They have less access to healthy food that can raise immunity. They have less access to stable housing that allows them to access shelter in place. They disproportionately make up those who we now have deemed essential workers. These are the same people who, before COVID-19, our government did not deem worthy enough to mandate a living wage yet is now saying our society can’t survive without.

As for Native Americans, there are 37 ICU beds to serve 2.5 million people in Indian Country.

Thirty-seven beds.

The lack of investment in infrastructure like housing has led to overcrowding, which compounds the impacts of COVID-19. The scale of racism in American capitalism isn’t overwhelming, it’s a crime against humanity.

Leaning into our responsibilities and interrogating accumulation.

Progressive philanthropy and impact investing have been held up as a way to equalize the system — to do well by doing good. Yet, we don’t openly talk about how 95% of foundation endowments are invested, or what is an appropriate rate of return to investors when investing in racial justice. Instead, we separate the investing function from the grant-making function and tell ourselves that high return, mission-misaligned investing is necessary to sustain the 5% of assets that are for mission-aligned grant-making. We tell ourselves that we must preserve the return of the capital holder to attract investment. But we rarely talk about how that 95% was acquired or the extractive nature of the market economy that enabled that wealth to accumulate in the first place. How this plays out in a global pandemic is that foundations and impact investors are being celebrated for moving resources quickly and streamlining their processes. This should be celebrated. This should be the standard. This should be normal.

As impact investors, Candide Group founded the Olamina Fund as a way to lean deeply into our values: directing family, foundation, and individual capital both unapologetically away from the extractive global economy and also concretely into communities, where systemic change has been foregone for too long. The lending and relationship-building work of the Olamina Fund explicitly names and seeks to address racism in the financial system. In response to this new crisis, Olamina, like many others, has developed a strategy to take on this pandemic by listening deeply to the needs of our partners. We are offering up to six months of interest deferment periods for new and existing Borrowers. We are placing our excess liquidity with depository institutions in the most impacted communities that struggle to raise funding at the best of times, let alone mid-global pandemic. We are working with foundations and impact investors to capitalize on CDFIs that are non-depository institutions so that they can make loans under the SBA Payroll Protection Program. We are calling on CDFIs who are SBA lenders to use their infrastructure to support customers of those CDFIs who can’t access that program. Lastly, we supported the many CDFIs and voices that asked for a carve-out within CARES 2 for providing liquidity to CDFIs and making the SBA program accessible to all. There is a carve-out now. It’s not perfect as many smaller CDFIs in Black and Native communities will still be excluded from the program and it is a start.

But we know these pivots alone are not enough, especially not at this moment. We are calling for a fundamental shift in who we center, and how we center resources.

The widespread need for this shift in thinking was made abundantly clear recently when the Federal government announced its plan for $350BN in forgivable loans through the SBA. While immediate relief to small businesses is very welcomed, it sadly comes with issues of access. Community Development Financial Institutions (CDFIs) are often the first financial organizations to rush to the aid of the community in a crisis, however, there was no allocation of funds in the stimulus to provide liquidity to these organizations to meet the demand. The CARES Act did not address the lack of CDFIs that are eligible lenders under the SBA. It did not address the lack of infrastructure on tribal lands, such as broadband, that can make applying for these loans impossible. It did not make allowances for small business owners with ITIN numbers only. It did not center the most vulnerable communities when thinking through this policy, which is resulting in many CDFIs scrambling to put liquidity facilities in place with major banking institutions, and only where those relationships already exist. As most major banks don’t have a footprint in the regions that serve predominantly Black and Native populations, this policy is doubling down on the structural racism within the financial system.

How we move forward.

As insurmountable as this all seems, there is a way forward if the commitments to racial justice made by many foundations and impact investors move from words to action. No one knows how society will be rearranged on the other side of COVID-19, with many stating that we can not go back to normal. Amongst my white friends, there is a collective awakening that the system will not save them and that their whiteness without wealth has limitations. I have heard people openly say that they are now beginning to understand what it feels like to be expendable by their own country. As infuriating as this may be — given the masses who have lived this reality their entire lives — it does provide white allies an opportunity to engage with their fellow white people from a place of understanding systemic inequities, that until now, their privilege allowed them to intentionally ignore.

About three years ago, I went on my journey around my white privilege and how I participate in systemic racism by engaging in our systems daily. It was and continues to be difficult work. It is a constant practice of self-reflection and de-centering myself and lifting other voices, whether it’s advocating for investments into Native and Black-led institutions, committing time each week to studying and implementing anti-racism practices, or using my voice to speak truth to power. Even in the scenario of a collective awakening, it will be truly difficult to sustain centering racial justice, as many organizations that hold an abundance of resources are still white-led and not actively examining the existing structures within those organizations that uphold white supremacy. It’s time for an internal examination to match the external commitment. At Olamina and Candide, we have explicitly built these commitments into our strategic plan.

Here are some ways we encourage others in the space to move forward:

  1. For all our foundation friends that center racial equity, it’s time to break down the silos internally between grant-making and investing. Had endowments been invested at a local level, community organizations would likely have more liquidity to support the demand for PPP loans.
  2. Listen to the feedback from grantees and investees about the evaluation process. Many of these communities have been operating with a pandemic level of resources for many years and are incredibly efficient at producing outsized impact with limited resources. Now is the time to trust their leadership.
  3. The time that is saved by streamlining the evaluation process can be used to critically examine the conscious and unconscious bias within the decision-making structure. We have all been conditioned towards racism and we all suffer from it. Intentionally shedding a light on it and making an explicit commitment to change backed up by action is not only transformational but inspirational.
  4. If your organization does not have a commitment to supporting Native organizations, it needs to. Time and time again, I have heard from the Native American community that they are invisible. As we stand on indigenous land, we have an ongoing responsibility to use our power and privilege to make them visible.
  5. Many organizations have heavy-hitters on their boards that can leverage their connections towards justice. Who on your board can use their power, privilege, and personal influence to affect policy changes at a national level? Without a meaningful political change to accompany our mission-aligned giving/investing, we risk losing many of the progressive wins that advocates secured for all of us.
  6. Be kind to one another. Now is the time to mirror the sentiments of the just world we are fighting to build. Give your staff permission to show up as their full selves without judgment or reproach. Center voices of those with lived experience, and take action accordingly.

We are in the midst of a once in a multi-lifetime event. Who we support today and how we support them will determine who we are post-COVID. Do we want to be a society that upheld the capitalist structure that is failing so many, or do we want to be a society that values the collective and centers interdependence? The choice really is ours and it will require courage, discomfort, and vulnerability. Now is our moment.

Thanks to Leslie Lindo, Nwamaka Agbo, and Jasmine Rashid for their contributions to this piece. Full disclosures related to this work can be found here. This post does not constitute investment, tax, or legal advice, and the author is not responsible for any actions taken based on the information provided herein.



Lynne Hoey
Candide Group

Managing Director of Olamina Fund at Candide Group. Financial Activist. @CandideGroup