An HR rewired feature on impactful investment firms with Mission Driven Finance
As a call-to-action it’s a hard one to ignore, especially when the sender happens to be your Mum. It was late November and during a particularly difficult week, I caught myself asking her ‘Why do I do this?’. And just as Mums’ the world over are famous for, she went into support mode. She’d seen something that would cheer me up, she said. She’d email it across. YOU HAVE TO READ THIS was the emblazoning CTA of her subject line. So I did. And she was right. Her email was just the reminder I needed.
She sent across a link to a blog post, by David Lynn, CEO of Mission Driven Finance (MDF) based in San Diego, California, written midst the summer’s protests for a better America. Now I’m not sure whether it was the title “I am a white man. I must do more to fight systemic racism”, or his prolific use of expletives that I was particularly drawn to, but either way before I’d finished reading I knew this was a man, and a company, I wanted to hear more about.
Fast forward to January 2021 and a piercing HR rewired Live with MDF’s Co-Founders Lauren Grattan (Irish, Chinese Native Hawaiian: she/her) and David Lynn (White American: he/him), packed with honest, open views on anti-racism, and a direct insight into the creation of an investment company that aims to shift the control of money within the financial system in order to provide impactful investment returns.
The story behind MDF goes back five years when David approached Lauren with the idea to build momentum for impact investing in their local community of San Diego. Having spent the previous decade within nonprofit fundraising and the inner workings of charity and social change, Lauren saw this as an ideal opportunity to reconnect capital and the local community. She explained:
“There were all these disconnects, these interpersonal feelings of difference being baked into systems. And we said, we’re just going to cut through this, we need to make this different because this is an inefficient and immoral way that we’ve structured society. So let’s take it apart.”.
At the time David balanced his career as a traditional investment manager predominantly for a charitable foundation with extensive philanthropic involvement within community organisations and nonprofits. As chair of the regional association of grant makers, his insight into the traditional philanthropic model led to his desire for change:
“I’d look at what’s been going on in philanthropy, for what, the past 50 years and it hasn’t moved. We haven’t moved the needle on closing the racial wealth gap, on education, on health. And if we’re not willing to say it’s got to change, nothing will change.”.
It was this joint ambition to do good differently that led to the creation of MDF. The founding of a different investment model, with different people or as David put it “people that don’t look like me”, so that different ways of moving capital into communities could be found because, as the Co-Founders illuminated:
If it’s more of the same, it’s just not going to happen
The system they left behind continues to frustrate, as David’s blog post last July is testament to. In the rush for corporates to proclaim solidarity with the Black Lives Matter movement after the murder of George Floyd, there were multiple team discussions within MDF on how to respond. They felt they should: after all it’s part of why MDF was built.
But they were wary of adding to the noise of so many performative statements coming out from corporations. Of mingling their voice with those, particularly financial institutions, who are less sincere in their support for systemic change.
“There was a lot of ‘look at what we’re doing over here…’ from corporates.” explained David “…alongside a hope of ‘but don’t pay attention to what we’re doing over there.’. So we decided as a team to continue doing the good work we’re doing, and talk about the action we’re taking rather than mix our living values with the pretence proclaimed by others.”.
But while out walking the dog, reflecting on all the praise heaped on corporates for not really challenging or shifting the system, and not advocating for sustainable change, for basically doing nothing more than setting their social media squares to black, he wondered how to add value to a conversation rife with corporate hypocrisy, “I started thinking about what my role as a White man should be in this space?”.
Such blog posts are never planned in advance.
Yet David’s thinking was a continuation of common discussion at MDF meetings. What did they consider to be their role in this fight? Whose voice within the company should be heard, and during what opportunities? When does the white male co-founder step back so that a team member who doesn’t look like him becomes the company voice, and when does David’s role in the fight need elevated?
And how to share their progressive stance so that privileged, mainly white, corporates could understand? Corporates, they find, that require a concrete path towards change because they have yet to lean into imagining what a world without race-based or gender-based values could look like. That even beyond the moral imperative for racial equity, such corporate leadership teams still struggle to see how their companies, consisting of a numerically white majority, are limited in connectivity to potential opportunities, as everyone is coming from the same white-washed point of view.
If an investment company, or any company for that matter, is to succeed and make good decisions it needs internal equity, those diverse standpoints. And this, explained Lauren, is done through tangible commitment, which for MDF translates as an investment model that taps into restorative and transformative capital for communities so that everyone rises up together.
Not, as read in many corporate press releases across the summer of 2020, the bestowing of gifts in the belief that the only way, or best way, to support the numerical global majority is through charity by being, as David calls it, the ‘great white hope’.
Action that in fact harms more than helps as it inflames the insidious racial power dynamic.
Here is an investment firm that acutely considers where their money comes from and where it’s going in every investment they make. Beyond the equity within their day-to-day operations, Lauren mentions a series of seminars she recently spoke at with a predominately white male audience, and rather than keep to her discussion topic she talked about the effect power dynamics have on the economy. An insight beyond her speaker remit. “I enjoy tricking them into a deeper discussion on unexamined assumptions.” she laughed.
David speaks of an investment they had under consideration. One that looked good on paper, but a scan of the company’s website told a different story. There were no women on the management team—a sign for David that somewhere, intentionally or not, bad decisions were being made with groupthink. He chose not to invest.
As the team continues to question their role in change, they remain committed to push, talk and challenge outdated practice within the investment industry in any which way they can. As an outsider to their world I see this as their guiding function. You may feel the same.
It’s all written in that fateful blog post.
CASE STUDY
In Baton Rouge we were amazed by the inherent ability for the community to see what was needed locally and fill that need.
It was an entirely overlooked opportunity and we questioned, building on work we were doing in other projects, whether it would be possible to invest in these folk. For example, one electrical engineer wasn’t able to access a line of credit. He’s doing electrical contracting. He hires a lot of folks from his community that are re-entering from the justice system, and he couldn’t get a line of credit to obtain an insurance bond.
We listen to those individual challenges.
He required a $300,000 bond on a $500,000 project, and that simply isn’t viable.
Our societal structures have been created to say “you can’t have this…a project of this size…you can only have a little bit of success.”. So we listen and learn about the micro and macro aggressions that are coming at people like this electrical engineer at a systemic level and we say “Okay how can we structure this differently. How can we take the current structure down?”.
“There is a massive vacuum in open accessible conversations about racism, about what leadership teams can do, what organisations can do, from the people who have direct control and power over how fast or slow their organisations get with the programme.”
Shereen
“It is an entire system of valuing people based on their race that we need to take apart, take it apart piece by piece and hold people accountable.
We don’t need a $20 bill with Harriet Tubman on it, we need to have deep systemic change.”
Lauren