Meet an Endowment Champion

At Work…

What finally inspired you to start aligning your endowment with your mission? (From Rick Clark) I would point to three events that occurred within a few months of each other that finally gave us the “push” to really focus on this as a strategic imperative.

As I concluded my finance overview at a 2020 Board meeting, Judy Spangler made a comment that was like a lightning bolt stating something to the effect of, “All of this discussion about investments and investment return, but people in our community are suffering. When are we going to actually put our money to work in the community?” There were a few curse words in there that make it more memorable now.

Around that same time, a subset of the Board attended the annual Total Impact Summit, hosted by ImpactPHL. Laura Kind McKenna stood up during the Q&A at one of the main sessions and took to task the assembled investment and foundation folks in the room to get more money to work in the various communities they all served. Her passion and urgency really sparked the room and our thinking at the Alliance.

Our former Board Chair  helped me frame my goals as Chair. In truth, the MAI goal languished a bit, because we had to pivot to a CEO search. But my goal was picked up and launched by my successor, who, together with our amazing CEO, brought the whole thing to life!!

What have been the biggest obstacles at your foundation for mission alignment? (Also from Rick) Two things: deal flow and patience. In small Coatesville, there are seemingly endless grant-making opportunities, but when talking about making investments for “Mission,” the universe shrinks significantly.

Patience. Once you make the commitment to “go Mission-Aligned” you can experience frustration at the pace at which you are able to deploy capital in this manner.  We alleviated this frustration to some degree by ensuring that nearly 100% of our public securities markets investments managed by our outsource CIO have an ESG/SRI filter on them that is consistent with the broader ideals found in our mission.

How far along is your foundation in this journey? New initiatives require a kind of comfort in not knowing the ultimate destination. When we begin a journey with a set destination, we are more apt to miss the more interesting trails along the way. It’s important, maybe more important, to be as curious about where the rest stops are than the destination itself.

What’s next in your mission alignment? Building a Community Development Financial Institute (CDFI). Said another way, our next step is building “process.” Everyone seems to be laser focused on “impact” and defining impact, but who actually supports that process is grinding to a halt. Our CDFI will fill that need and handle the boring stuff. Everybody wants to hit a home run getting an early equity investment in a 10x company, but folks who have been economically disinherited from the processes need micro to mid-sized loans. They won’t pass the due diligence threshold – or don’t need massive capital. They need a loan.

What about perpetuity or spending/investing down? Our board has some folks on both sides of this idea, so I’m going to speak from my own perspective. I don’t think this can, or should, be a universal approach. Look, if I’m in charge of a foundation that has over a billion dollars in assets, then I’m leaning much more on spend down. Especially if I’m in a resourced community where we can talk to employers about the damage of holding assets in a DAF for years from now without requirements to spend any in the interim. I’ve always said, instead of celebrating giving back we should increase how we celebrate those who don’t take too much to begin with.

But our work is not in a community that is rich with other resources and large local businesses. Spending down the endowed resources that provide band-aids and bridges to the results of structural inequities could leave a community without the systemic solutions needed to end those inequities.

What’s a favorite mission aligned investment of yours? A gentleman in our community has a smoothie truck called Blendz and Thangz. We found out that he had to pay $100 any day that he had an event to rent the generator for the truck. So each time he had an event he was eating his profit in the rental but he couldn’t afford buying the generator. So we asked what it would cost and found out a brand new generator would be $5,000.

He told us that he found one for about $2,500 which he could afford and was going with that. I said we could give him the loan to bridge that gap and structure it with a fee repayment instead of an interest-bearing loan. That way, when he did an event he could pay us the $100 + a monthly fee of $20 instead of interest and after 25 events he will be permanently free to grow his business. This kind of creative financing structure isn’t typically going to happen at a bank, but the CDFI we are launching will be focused on thinking about what works for our community members are for whether it’s that size loan or the $250,000 grant we gave for a large infrastructure grant for a more complex and sophisticated business borrower.

Have you ventured into shareholder advocacy? How so?! We are beginning this conversation with our finance committee. We have strategically focused more on how we were choosing to avoid investing in problematic companies.

What’s the most convincing thing to get others on board? Stories. Data proves the point but stories prove the purpose.

After Work…

Guilty pleasure: TV. Specifically, any and all Star Trek from The Original Series to the new stuff. Just anything ST. Well, I don’t really rewatch the movies because generally they are all trash…even the “good ones.” But really any TV shows, especially where they go right on and deal with the ways humans treat each other unacceptably and reveal it just doesn’t need to be that way.

Kickback film: “Blazing Saddles”

Last series you binge-watched: “Ramy”

Favorite caffeine source: Don’t go for caffeine. But where I incidentally am most likely to get caffeine is chocolate.

Sweet or salty: Salty

Happy place: Wherever there is laughter.

A favorite novel: The Book of Flying by Keith Miller

Animal friends: Tribble the Cat and Billy Ray the Dog

Childhood ambition: Be the first pacifist President of the USA

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