So you may have some investment ideas in mind but suddenly there’s so many questions and the temptation to say “but grant making is so much easier”. Yep. I felt the same way. But when I received a beautiful handbag from my investment in Deux Mains, it was worth the hassle. First, these entrepreneurs are the most inspiring people you’ll meet. Your faith will be influenced and inspired as you walk with them and you will get to see miracles. Deux Mains would not have had the financial runway to design new beautiful leather products without business investment (that is currently in the form of forgivable and convertible debt set up through Impact Foundation) to buy materials, hire designers and upgrade their marketing.
My handbag from Deux Mains!
This company now has a chance to keep their doors open and keep their 35 employees working and keep aiming towards their goal of 350 employees by 2025.
When I hold that bag I’m reminded that the artisan who made that bag is supporting an average of 10 people, keeping kids in school and providing a pathway to prosperity for his/her children. What could be better than that?
BUT, we won't see a return from this little company for a long while and I don't want to drain the resources of the foundation on lots of “charity” phase business investment. So I needed to diversify the foundation portfolio. I’m pursuing things like funds that invest in people and places I want to affect but are aiming for market rate returns (around 8%). These investments feel a lot less like charity, except that some of these mid size businesses need more training or time with an accelerator as they grow and expand. An example of this type of fund would be Talanton. They aim for a market return but are heavily involved in strengthening the companies they invest in. But there’s an even easier place to affect change and that’s investing in larger investments like Eventide (mutual fund), Creation Investments (private equity/private credit) or Sovereigns Capital (private equity). Most of these suggestions were from professionals I met at the Faith Driven Investor (FDI) movement. I guarantee taking suggestions like these to your investment professional will validate your voice about Faith Driven Impact Investing. Options like these make competitive returns and will not be responsible for dragging down your portfolio. Once you bring a few of these to the table, your manager will be far more convinced your suggestions won't ruin their performance. Once the door was open, I ran straight back to the FDI crowd and asked for more. There are many faith aligned money managers and funds to choose from. Additionally, we’re going to be working with an advisor to help design a truly FDII portfolio for a portion of our foundation assets and see how competitive the financial returns are against traditional investments. Hopefully in a few years we will have the whole endowment aligned like this, making about 10-12 % in income and still distributing 8-9% of the foundation in grants and some of those riskier early stage business investments.
Although it felt upside down at the time, I now realize that without the operating investment in that little company in Haiti, I would not have any real connection to the impact these investments make. Watching what a business investment in Deux Mains is doing for the 35 employees in Haiti, sending kids to school, families able to provide education and healthcare to their children, a safe place to work away from the trauma of exploitation and trafficking, I realize I want to scale this impact as much as possible and now I know that I can!