Geographies | March 11, 2019

Investing for racial equity: highlights from Confluence Philanthropy’s practitioners’ gathering

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, March 11 – Communities of color—particularly African and Native Americans—are notoriously underserved and undercapitalized. Exacerbating the problem is the lack of diversity in the firms and senior management deciding where investment money goes: just over 1% of $70 trillion-worth of assets under management is controlled by women and people of color; nearly 25% of the U.S. population is non-white and nearly 51% is female.

Foundations, family offices, individual donors and investment advisors representing $3.5 trillion in managed capital and $70 billion in philanthropic assets gathered at the annual meeting of Confluence Philanthropy in Brooklyn last week. ImpactAlpha dropped into to hear how the network is trying to use impact investing to drive racial equity. Some highlights:

  • Embedded bias. Akasha Absher of investment advisory firm Syntrinsic Investment Counsel said that for the majority of her career in fixed-income trading she did not have any black acquaintances or colleagues in finance. “I purposely went out of my way not to congregate with black people,” she said. “if too many black people are together, other people get scared,” she said. She said the blending of networks is critical for change. “Without that network support, no one is going to grow.”
  • Uncomfortable questions. When General Service Foundation’s Dimple Abichandani hears that her foundation is investing in distressed debt, she says she asks, “Who’s in distress?” If the borrowers being pressured are in communities of color, she says, she challenges the foundation to advance racial and gender justice through its investing.
  • Reparations. Some investors are starting to grapple with how private capital can help atone for historical racial inequality. “African Americans and indigenous communities don’t benefit from the wealth that their ancestors created and died for,” said Veris Partners’ Patricia Farrar-Rivas. Read more in our Agents of Impact special report.