 With similar tactics but a different objective, we'll hear next a talk about achieving racial equity oriented results through impact investing. Sharon Alpert and Nathan Cummings of the Nathan Cummings Foundation and Fred Blackwell of the San Francisco Foundation have been thinking about and doing this work well before it was cool. As pioneers in the field they were introduced by a common mentor, Carl Anthony, and he did office colleagues at a Philadelphia Equity Summit many years ago. Talking with Fred and Sharon backstage, I could hear an immediacy and readiness for their work. We each agreed that growing up in Jewish or Black households where justice was a mandate, we have always known that there was a need and a way to create an economy that works for more of us, if not all. These two pioneers share an obvious respect and admiration for one another, and it's a privilege to hear them chat together about their work and leadership this morning. Please welcome to the stage Sharon Alpert and Fred Blackwell. Good morning everyone. It is so great to be with all of you today and to get to focus on these really important conversations. It's watching backstage, the focus on gender lens investing, now focusing on racial equity on the main stage is pretty incredible here at SoCAP. As you just heard I'm Sharon Alpert. I am the president of the Nathan Cummings Foundation based in New York. We are a multi-generational family foundation that is focused on building a more just, vibrant, sustainable, and democratic society. And we aim to transform the systems and the mindsets to lead to a more sustainable and equitable future for all people, particularly women of people of color. Social justice runs deep in our mission and in our DNA. And over the last 27 years the foundation has awarded nearly $500 million in grants to build social movements, support organizations, and individuals who are pursuing justice for people and the planet. So I'm really, really thrilled to be here today with my longtime colleague Fred Blackwell at the San Francisco Foundation. And I can't wait for you to all hear about the work that he is doing. I want to thank Mission Investors Exchange and SoCAP for putting this really important track together on racial equity and impact investing. And I encourage you all to follow this track and see our colleagues who are speaking throughout the conference. So without further ado I'm going to turn it over the first question to you, Fred. What excited you about Mission Investors Exchange invitation to be part of a conversation about moving to action on racial equity and inclusion? There are a variety of things and definitely want to share them but first just wanted to also thank SoCAP and the Mission Investors Exchange for putting this together. I was saying on the call when we were preparing for this that it's actually kind of weird that we've been working together for so long and haven't been on the stage together. So I just wanted to thank everybody for making this happen. There are really two or three reasons that I was excited about doing this when the invitation came. The first reason is because we at the foundation a few years ago decided to really just push all of our chips into the middle of the table around achieving a greater degree of racial and economic inclusion and equity at a regional level of scale here in the Bay Area. Can you hear me now? Good. Thank you. And so it always excites me to be able to talk about that. That work is very important to us in here in the Bay Area. We decided to have that kind of focus because what we saw was that we had all this kind of economic growth and opportunity occurring here in the Bay Area but that access to it was pretty limited. And for many people it was limited based on where they live or what their family's economic status might be or something as simple as their race and their ethnicity. And so we thought it was really important for us as the Community Foundation serving the Bay Area to be responsive to that dynamic. And so for that reason it was very exciting to be able to come here and talk about that work. But the other thing that was exciting was to be able to talk about the work that we're doing in relationship to impact investing. And the reason there for me is that, you know, impact investing, in a lot of ways, does not actually achieve racial equity oriented results without being intentional. And really if you really think about it, the fact that we are engaged in social impact investing in and of itself doesn't mean that it's going to improve the lives of low income folks, communities of color, unless we're being intentional about it. And so the opportunity to talk about what that intention looks like in relationship to racial equity and what we're trying to achieve I think was another exciting opportunity. Last thing is, you know, I spent most of my career in local government. And in local government, you know, one of the things that was challenging obviously was navigating the politics and the bureaucracy in order to achieve what we were trying to achieve. But the other thing about local government is that once you do all of that, the impact of your investment in time and energy and the politics is really great. And in philanthropy, while we have resources, the resources compared to local government in the government in general are actually a fraction of what the public sector brings to the table. What that means for us in philanthropy is that we have to use all of our tools. It isn't just about grant making. It's about how we invest. It's about how we use and exercise our civic leadership. And I think the idea of being in a conversation around how we use all those tools to achieve racial equity was something that was exciting to me as well. But what about you? Oh, well, you're just singing my tune. And this is why we're here together. And so I'm really excited because it's a pretty exciting time at the end of the year. And as I mentioned, I joined three years ago, and in March of this year we made an announcement after a really thoughtful and intentional process, another theme we share in common, to align 100% of our endowment with our mission. Thank you. And we did this for the reasons that you were just mentioning too, Fred, which is we believe that foundation should be about more than grant making. That the problems that we're focused on inequality and climate change are market problems, and they need market solutions. But they need new market solutions. We need to drive capital in ways that drive sustainable and equitable growth that will create long term value for people and the planet. And that how we invest our resources as foundations, how we use our influence in our voice, as Fred just mentioned, as investors are really powerful tools to make that happen, and they're really underutilized tools in philanthropy as well. And we made this decision also really thoughtfully, it was a full consensus decision by our board. But we made it because of who was also at the decision making table. And so when I think about racial equity and inclusion, I think a lot about who are making these decisions. We've had intentionality at the foundation since the inception. Our foundation has a deep and intentional commitment to making sure that our tables are diverse. Our staff, our board, our independent trustees, our investment advisors. Some people might say that we've been stacking the deck for racial equity and inclusion. I think so. Many of our advisors, some of our advisors are here at Socap. Lisa Green Hall was really instrumental in helping move our decision to 100% impact investing. And we believe that we need to push past the status quo. That we have to imagine like I think everyone here at Socap does that another economy is possible, that you can put capital towards social good. So that was one of the reasons I'm really excited about being here and being part of this conversation. Another is so many of our partners are here at Socap too, who are pushing on these issues and pushing past the status quo. We heard yesterday from Jessica Norwood that black households only have $11,000 in net worth compared to about 143,000 in average net worth in a white household. We have to come up with new solutions to these problems. And the runway project and the work Jessica Norwood is doing, she helped create that when she was a fellow at the Nathan Cummings Foundation. So we're trying to put all of our assets, all of our resources, all of our tools towards making this change. We've got granteers here from Bali, activists, living cities who you heard from yesterday as well, color of change, the center for economic democracy, the first people's investment engagement program, which is focused on intersectionality issues, strengthening local economies and addressing violence against women and young people in indigenous communities. There's a wealth of resources out there on these issues and we are so proud to be with our partners here at Socap in this conversation. Great. Thank you, Sharon. I get to ask you another question. So how does kind of the focus on racial equity, economic conclusion show up at Nathan Cummings in practice? What does it look like? And can you also share some success stories and some challenges with us? Sure, absolutely. So on this one, I want to keep this theme of focusing on who is making the decisions, who's at the decision making table, and also the underutilized tool of philanthropy using the power of being a shareholder, being an investor, right? So we have been doing a lot of work over many years to focus on how we use our endowment to advance issues of racial equity inclusion on board diversity in corporations across the country. And we've intentionally focused this work on race and gender. And more recently, we're really focusing this work on the intersection between both of them, recognizing that our field has seen a significant amount of progress that has mostly benefited white women on corporate boards and not enough people of color. But let me talk about some of those successes. We focused and we engaged Oracle Corporation on board diversity issues that resulted them changing their language of their bylaws explicitly, stating that the nominating and governance committees will actively seek, I'm going to quote this, women and minority candidates for the pool from which candidates are chosen. That makes a big difference. In partnership with our Harvard Law School shareholder rights program, we ultimately persuaded more than 30 companies to implement annual director elections. That means every year those seats come up for election giving more possibility for diverse boards. We pushed for greater diversity on the board of discovery communications. And in 2018, 33% of shareholders representing about $2 billion worth of invested capital supported that request for the board to include women and people of color in an initial list of candidates. But we're also seeing some challenges with some of those same companies making good on those promises. I'll mention a couple of other areas we're looking forward to heading into 2019. We're going to use our standing as a shareholder to put forward a proposal to a large retailer highlighting the risks associated with prison and diversion programs for labor in the supply chain, which we know is a huge racial equity issue. Good. Good stuff. It's great to have your partnership. So let me ask you the same or a question we're focused on your work leading a community foundation here in the Bay Area. We're here in your turf. As one of the largest community foundations in the United States, how does that help shape your racial equity and inclusion efforts? Particularly thinking about your portfolios around impact investing? Sure. So as I mentioned before, when I was saying how excited we were to be here, I mentioned that we had really pushed all of our chips into the middle of the table around racial equity is now the North Star for the San Francisco Foundation and really impacts and cast gaze down through the entire organization and everything that we do. The way that it manifests itself in practice is that we actually went away from organizing ourselves around the traditional philanthropic areas like community development, community health, arts and culture, education, environment, etc. and are now organized around what we're kind of characterizing as the pathways to equity, which loosely kind of focus in on the concepts of people, place and power. And we've created centers of work around each one of those bodies of work that focus in on building political voice and power and advocacy strength for low income communities and communities of color. We focus a lot on that. We focus a lot on economic mobility issues as well under people and under place. We have done a lot of work trying to focus in on how we can prevent both kind of housing and cultural displacement that's occurring in different parts of the community. What it also translates into is that we consider under each one of those headlines or areas of work, grant making opportunities, investment opportunities and leadership opportunities, right? And the thing that's great about being at a community foundation and challenging about being at a community foundation is we have this two fold kind of business model. One is we do our grant making with the endowment, but we also have donors at the San Francisco Foundation. So of the 1.4 or $5 billion assets under management, probably about five to 600 million of that is with donors doing their philanthropy through us. And so when we think about our impact investing work, not only do we think about it in terms of the foundation's endowment, but we also try to think about opportunities to engage donors. And so for our program related investment program, what we did was we carved about we started with carving $5 million out of the endowment and then inviting donors to participate. And so they participated for one to one matching basis with us and created a $10 million pool. And that what was unique about that is the donors were willing to contribute without knowing what the projects were, right? And so we're co investing with donors on things like affordable housing production on things like job creation and in communities in the Bay Area where we think we can have an impact from an equity point of view. And it's been so important and successful to us that we've doubled that investment. And we are now doubling the the ask of donors to invest with us. So I think that that's a really great opportunity for community foundations to kind of evangelize with donors that are in our midst to bring them into the fold with us. And we are on the brink of launching a $50 million mission related investment program where we can do not only loans like we do with PRI but make equity investments that align with what our other equity mission as well. And we're inviting donors to be a part of that too. So I think that's really the opportunity for community foundations is not only kind of how we think about deploying our assets but how we also help donors deploy their assets in ways that bring all the tools into the stream as well. And so we're really excited about that. And you know there have been a few things that we've been able to do that have been really great. So through our PRI program we have made investments in line with public funds that have been available for affordable housing production so that affordable housing advocates and producers can go out and acquire property and then draw down the public money. We made an investment in a group called the Green Lining Institute that wanted to secure space in downtown Oakland for nonprofits who were focused in on equity related issues in a time when commercial space was so expensive that these kinds of organizations were being pushed out of downtown Oakland. And so it's just great opportunities that I think exist when we think about how we deploy all of our assets. That's amazing. You're I want to ask how your your staff and your board sort of see that like rewriting right of the focus the North Star in their roles. It's a great question. I mean we started off frankly with being very focused in on racial equity and economic inclusion and how we were going to draw a line and have impact in the community. And there are a lot of folks who actually start that work with doing an internal examination around equity and how it how it impacts the organization. One of the things that was interesting about me this is a whole nother story but I was really emphatic about the fact that we needed to draw a line around what we were trying to achieve externally which means that we are just now having the conversation around internal equity and what that means for us in exploring our own biases internal infrastructure and making sure that it aligns with the kind of bold declarations that we're declaring around what we want to do externally. So we have now a group of folks at the foundation who are very excited about this work. And while I was the one pushing for us to go in this direction early on now I'm the one being pushed and being told that we're not doing enough around certain things. So it's a great kind of turning of the curve in a lot of ways around how we think about this stuff. And I would say from a board perspective we have been really blessed to have a board that has been grounded in the concepts of kind of having regional impact and being social and economic we social and economic just justice inclined. And so it wasn't a tall order to convince our board that we needed to go in this direction. But it has been frankly a challenge to think about as a board not only how they provide effective and good governance to us but how their partners with us also in achieving racial equity. And so that is kind of when I say it's a challenge it's a challenge because these are volunteers and these are folks who we're actually asking them to stretch their kind of capacities and muscles in ways that they haven't been asked to in the past. It's amazing. Well you told me I was allowed to bring in a question we weren't expecting and that one I'm really glad I did and it's so similar. You clearly have are hiring the right people if they're pushing you to do more. And again you're rewriting the playbook and that that requires new plays and new ways of thinking. It's really exciting to hear it. So Sharon let me ask you kind of what's your vision for the future of this work. Both in terms of kind of racial equity and inclusion but also in terms of impact investing. Like where are we going where would you like to see us go. Well you know like you I think when you change the North Star you change the goalposts. So much changes really I think much more quickly than then you can even imagine because now everyone's aligned right to that new North Star. So even though we're pretty early on and having just announced this commitment but building on a long track record of of focusing on these issues. Both being a field builder and an early founder of things like the principles for responsible investing. We actually weren't using that as the charge for our own internal investment practices. And so we're already seeing those changes having made the decision to align a hundred percent that it's now having us ask different questions internally as you just mentioned. As well as how we're deploying our networks and our assets in the field. We know that in order to fully mobilize capital to underserved communities or in alignment with the big challenge of addressing climate change that we have to really reexamine our playbook. And we know that this is why SoCAP has been organizing these conversations and the big tent we heard about yesterday. And we really need as you were also saying you know all hands on deck to make that vision a reality. So some of the things that we're trying to do internally and that we're really learning with our partners in the field joining groups like Mission Investors Exchange and Confluence Philanthropy and new affinity groups that are really focused on racial equity and racial justice in the impact investing space to help us like learn from others who have been doing this as I think we're creating the new playbook for the field. So one thing we're doing new internally is requiring diversity and inclusion metrics from our outsourced CIO our chief investment officer. What we've learned just by asking these questions is that about 20 percent of our investment funds are invested in women or people of color owned firms. And this compares to an industry average of about three to nine percent. So we're doing above average but we as we heard earlier there is still so much work to be done to make sure that those investments align with our mission and that really pushed the practice. We're revising our investment policy statement to make sure we do that to make diversity and inclusion an explicitly explicit part of our underwriting and our governance. Again if you change the rules right then you change the rules of the game and you're playing a different one. And we're actively sourcing and evaluating investment opportunities to improve that access to capital for diverse fund managers. It's it's as we've heard on this stage there's a lot more work to be done and I think our vision is one that will not happen overnight but we know we've moved the goalposts and that's that's a that's a big piece of it. Yeah. How about you Fred what's your vision. Yeah so you know as I said at the beginning of racial equity oriented results are not achieved without intention. And I think my hope for where this goes is that impact investing ends up in a place where there is very clear and tangible positive impact for communities of color associated with this shift. And I think to get there it requires a lot of what you mentioned. I mean it requires us being clear about what biases we have in our institutions what kinds of policies and procedures are not enabling us to achieve that. And what it looks like I think on the ground is not only are we utilizing more diverse managers and in terms of gender also in terms of race and ethnicity but those diverse managers are also guiding us to investment opportunities that exist within institutions that are led by people of color as well. And that beyond that that that means that there is demonstrable impact in the communities that we care about. So I think a great example of that to me I was introduced by a woman named Keisha Cash who I think probably some people are familiar with the group named Maven that she was investing in. And that group really took advantage of the fact that you go you've got an African American and community of color business opportunity that exists with folks who are in the kind of cosmetic and hairdressing industry in the hair care industry and the the barbers and the hairdressers don't actually have access to the part of the economy there that is the most has the most high impact associated with it which is actually selling the hair. And so they create a platform whereby the barbers and the hairdressers can have access to a platform where they can sell the hair as well. I mean that is a perfect example of the fact that if less there's a person who actually comes from that community and has investment from that community it's a business opportunity a lot of people just wouldn't have seen and it creates an opportunity for economic growth in a community that wouldn't necessarily have had that level of economic growth. More of that is think I would where I think we need to be. Absolutely it's really I would add to that we're talking about really democratizing the economy creating access for those who haven't and creating that vision of a just and sustainable and equitable economy that is possible but it pushes beyond the status quo and it's going to require some pretty bold and visionary people so I hope there's a few of them in the audience today. And it looks like we're over time right so I think we need to wrap up it was fabulous to be up here. Thank you Fred, fabulous to be with you.