NYC Impact Investing Trip 2018
Sean Kingston’s “Fire Burning” blares through the radio as our Honda Pilot traces its way up US-29 North towards New York City. In the backseat, the music is accompanied by the staccato clacks of laptop keys from Mohammad Malik and Kajol. Kajol is dutifully working on the education sector’s final company presentation while Mohammed reviews investment briefs. Work is a gas that will fill whatever space you let it. People here live and breathe impact investing. That two word topic is the focus of this weekend’s trip. Before we go any further, let’s break down what that means.
Impact investing, in short, is investing in businesses that “do well by doing good,” or, to borrow a definition from the Global Impact Investing Network (GIIN), impact investments are “investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return.”
So where do I come into this? My name is Chandler. I’m a 2nd year at the University of Virginia and a member of Profit with Purpose (PwP), an impact investing club with a specific focus on Venture Capital. PwP’s mission is simple — “to educate, connect, and empower” its members and provide them with a foundation in the impact investing space. This weekend trip to New York City is a fusion of those three goals. Through exposure to companies working in this field, we hope to see how different sectors approach impact investing differently, to stay current on real-world developments in the field, and to build relationships with people in this space who most of us hope to emulate.
Our itinerary is jam-packed. We’ll be touring five companies located all over the city: Blue Ridge Labs, BlackRock, Human Ventures, Rockefeller Foundation, and Republic. Without further ado, let’s dive deeper into three of these companies and see where they fit into this space.
Blue Ridge Labs
After 5 hours of sleep in our Bed-Stuy airBnB, we’re out the door into the crisp morning air. We dart under the city via the infamously unreliable New York metro system, review our company briefings one last time, and grab a last-minute bagel for sustenance before meeting with our first company — Blue Ridge Labs.
Our contact here is KT Gillett, Blue Ridge Lab’s Associate Manager and one of the “three legs of the tripod” for this lean three person organization. Blue Ridge Labs is nested within Robin Hood, New York City’s largest poverty-fighting foundation. (Fun fact: Unlike most foundations, Robin Hood spends 100% of its funds every year, vastly more than the 5% minimum that is legally required.)
Blue Ridge merges technologists with communities who work together to explore and build new solutions for New Yorkers. More specifically, Blue Ridge provides “space, funding, and resources to help launch and grow tech platforms that address economic inequality in NYC.” In practice, their approach is two-fold: a paid fellowship for mid-career individuals from diverse backgrounds to form ventures around a chosen issue area and a six-month Catalyst incubator for teams with a prototype that need support to scale their impact.
This model has already proved successful. To demonstrate, KT brings in couple of her favorite founders — Tammy Quan from Cognitive Toybox and Rachel Goor from Nesterly. First, Tammy walks us through Cognitive Toolbox, a game-based educational app to account for the immense early education word gap¹ between families of different income backgrounds. She tells us about the potential for “digital interventions” — for apps and other digital tools to help fill in the gaps and inadequacies of existing systems. Her knowledge on the subject is immense and her passion is palpable.
Her face lights up as she whips out an iPad for a demo of the app’s potential for teaching children about shape-based knowledge acquisition. Through assessment games, automated reports, and recommendations, the app provides a platform for early education intervention and, ideally, enhanced life outcomes for its users.
Up next, we hear from Rachel Goor as she guides us through Nesterly, a digital partnership platform for connecting older adults in need of companionship and household labor with younger users looking for affordable housing.
Both of these founders are prime examples of how businesses can be structured to solve societal problems while maintaining profitability. Before we have time to process all of the amazing things that we saw at Blue Ridge, we’re zooming to our lunch meeting at BlackRock, another 45-minute train ride into Manhattan.
BlackRock
The very name has heft to it. Solidity. As we walked up to its Manhattan Office, a monument to Capitalism stretching towards the heavens, it was hard to not feel like this was some imposing force. With over $6.5T in managed assets, BlackRock is the world’s largest asset manager. Essentially, BlackRock manages money for other entities — pension funds, university endowments, etc. — and invests that money into places where it can make more money for its clients. This is a gross oversimplification, but it is helpful in understanding the basics.
To put BlackRock in context within the impact investing landscape, I’ll start with a quote from Larry Fink (BlackRock’s founder and current chief executive) in a January 2018 letter to the CEOs of the companies in which BlackRock invests. He encourages them to consider the social implications of their business decisions and to focus on their long term-plans. “Indeed, the public expectations of your company has never been greater,” he wrote, continuing:
Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate.
People are paying attention because the company controls an enormous amount of investment — according to Bloomberg, it controls one out of every three dollars investors send to fund companies in America.² At the meeting, we learn more about the back-end of BlackRock’s Sustainable Investing division along with their approach to shareholder advocacy. Additionally, BlackRock is hugely influential in creation of ETF’s (exchange-traded fund) with a specific focus on environmental, social and governmental objectives (ESG) in line with the United Nation’s Sustainable Development Goals.³
One thing that I was amazed by at BlackRock is the diversity of the backgrounds of people we meet with. From former English majors to people with backgrounds in pension fund management toone woman who had spent decades working for the Asian Development Bank, there is no one right path to working in impact investing. As Eric Shostal, BlackRock’s VP of Investment Stewardship, told us — “As long as you’re learning something new, you’re alright.”
Rockefeller Foundation
As Rockefeller is a foundation and not a for-profit company, its priorities and projects are entirely different from those of BlackRock or Blue Ridge Labs. With an endowment of over $3.7B, Rockefeller Foundation is isolated from many of the fundraising challenges facing smaller foundations and non-profits. Additionally, with a federal requirement to spend at least 5% of this endowment every year, Rockefeller has ~$185 million to spend annually on nearly any project it deems to fit into its mission “to promote the well-being of humanity throughout the world.”
Its main areas of concentration are Health, Food, Power, and Innovation but there is a wide variety of projects that fit within this scope. In 2007, Rockefeller Foundation coined the term “Impact Investing,” putting a name to investments made with the intention of generating both financial return and social and/or environmental impact. Rockefeller’s unique position within the landscape allows it to be on the cutting edge and invest in projects that are impactful yet don’t face the same strict profitability requirements as most VC‘s have.
From its “100 Resilient Cities” initiative to its financing for 20,000 NYC public high school students to attend Hamilton on Broadway along with a companion curriculum to teach about forgotten histories which are left out of the standard historical canon, the people at Rockefeller seem like they had the coolest jobs in the world. With essentially a blank check, a broad, but empowering mission statement, impact-based work, room for creativity, and lack of strict shareholders to be accountable to, working at Rockefeller would be a dream.
Conclusion
After a whirlwind day, we’re left exhausted and inspired. Earlier on our way out of Blue Ridge Labs, Claire, a first-year on the trip, walked up to me. She was beaming — “oh wow, that was so cool! They wouldn’t even have to pay me — I’d pay them just to work there. I just had no idea that companies like this even existed. That is what I want to do with my life.”
You don’t know the life-changing moments will come before they do. In this moment, Claire’s path was changed. Through this trip, each one of us had a small revelation like this. My biggest change came in mindset. For the first time in a while, I have felt hopeful. Hopeful that there are people like Eric from BlackRock or KT from Blue Ridge Labs or Andrea from Rockefeller Foundation who work day in and day out to define and expand this niche of impact investing into a means of addressing some of the many problems in this world.
In the words of Mohammad, one of PwP’s founders, “We traveled to NYC to build relationships with practitioners, see impact investing first hand, and bond within our own community.” And on all three counts, I’d say we succeeded.
If you want to learn more about the club, you can find more information at our site here or feel free to reach out.
