Gender Smart | December 5, 2017

Complicit: Where are impact investors as the tax bill redistributes wealth upward?

The team at


Talk about a meme whose time has come. “Complicit” is the word of the year, according to, which made the selection even before the last few holdouts among Senate Republicans traded their votes for the tax cut for vague promises about health care, Dreamers and deficits.

In her opening remarks at last week’s High Water Women Investing for Impact Symposium, Anna Snider of Merrill Lynch put the word up on the big screen. The conference gathered women finance professionals in New York while in Washington the mostly male Republican senators (say it ain’t so, Susan and John) were scribbling their last-minute amendments.

It wasn’t hard to notice that the impact-oriented advisors and money managers in the room were patting themselves on the back for moving millions, while Congress was moving trillions, mostly in the other direction.

Yet the elephant in the room went unremarked as Valerie Rockefeller, as chair of the Rockefeller Brothers Fund, described how she has helped move that foundation’s $870 million endowment away from fossil fuels, and Dana Bezarra, the incoming head of the Heron Foundation, made the case for why Heron points 100% of its $270 million in assets toward the foundation’s mission of helping people help themselves out of poverty.

At the very same time, the Joint Committee on Taxation and the Congressional Budget Office was estimating that, by 2027, people making between $40,000 and $50,000 would pay $5.3 billion more in taxes, while those earning $1 million or more would pay $5.8 billion less.

That doesn’t exactly count as inclusive prosperity. In so many ways, from Arctic drilling to universal health care to income inequality, the tax bill is anathema to what could be called “the impact agenda.”

Tax Hacks: Turning tax reform toward inclusive, sustainable prosperity (podcast)

Yet the tax bill went virtually unmentioned throughout the day.

Certainly someone would connect the dots, I thought, with the political disaster unfolding in the Capitol. Sara Brand of True Wealth Ventures kicked off the afternoon with a talk titled, “Women Investors are the Solution to the World’s Problems!” That may be true, but the tax code is literally the code, the algorithm, that will steer capital for a generation.

I was surprised that it wasn’t Topic A throughout the day — not even with former Massachusetts Gov. Deval Patrick, now a Bain Capital fund manager and sometimes-mentioned 2020 presidential possibility. Patrick was interviewed by Imogen Rose-Smith who, as a regular on ImpactAlpha’s Returns on Investment podcast, often makes the point that impact investors need to engage public policy. Imogen didn’t press Patrick on the obvious point that Bain’s $390 million Double Impact Fund won’t have much impact, let alone double impact, compared to the tax bill’s long-term burdens.

My assigned role in the show was to moderate a late-afternoon plenary panel on “impact investing in the age of social activism.” I thought of it as a way to bridge the worlds of asset-allocation, risk-adjusted returns and even impact metrics with the social mobilization underway: #MeToo, #BlackLivesMatter and #WeAreStillIn.

2020 Vision

But even my impressive panel members wouldn’t engage “the present moment,” as I put it in my set-up. Jason Scott of Encourage Capital recounted the movement that encouraged asset managers like BlackRock to vote to require oil companies to assess their exposure to climate risk. Gitanjali Swamy, managing partner at IoTask, described a study she’s working on to document how sexual harassment hampers venture capital returns. Fran Seegull, executive director of the U.S. Impact Investing Alliance, touted the accelerating capital flows toward ESG (environment, social and governance) investing in the year since the presidencial election.

My final question invited the panelists to look forward to January 20, 2021 — Inauguration Day — and imagine what could happen in those three years. I expected a rousing call to action. Failing that, I should have given my own. I didn’t. Because I don’t want to be complicit, here it is:

We sent the dividers scurrying in the 2018 mid-terms. It’s amazing how fast we were able to drive a 21st century political realignment around the “impact agenda” of good jobs and rising incomes all across the country. The trillions that have been invested for pro-growth climate action and sustainable development, and the billions that have been mobilized for innovative solutions and bottom-up prosperity, have created a diverse and popular super-majority. Now, in 2021, we are moving ahead, together, to build a healthy, inclusive, regenerative future.

That’s a West Coast, blue-sky fantasy, you’re thinking? Of course.

But if that’s not the plan we’re on, what is? If not a revolution in finance, then what? If not long-term, responsible, and courageous investors, then who? If not now, when?

From ‘Condemn and Disband’ to ‘Invest and Transform’