by Dr. Paul Campbell

“We are an Inclusive Workplace and will hire the most qualified candidate period.” Sound familiar? By its very nature, this statement is a contradiction in and of itself. You can’t hire the most qualified candidate without he or she first having the opportunity to acquire the right balance of experience, education and social network. As such, this necessarily excludes a majority of Black and Brown contributors from the Diversity & Inclusion conversation. How so you may ask? The biases which created a need for the D&I division within organizations are in fact the very cause of their lack of effectiveness. This article highlights 3 main reasons why many D&I initiatives fail to make significant progress for People of Color. Moreover, it provides strategic insights that organizations can use to increase the effectiveness of their D&I initiatives. Let us start by unpacking the first cause of failure, Premature Diagnosis.

Premature Diagnosis 

Oftentimes D&I initiatives fall short because they start off with the wrong set of assumptions. Asking “How do we attract and retain top underrepresented talent” leads organizations to premature solutions such as measuring Diversity as a singular KPI. Put differently, leaders are settling for check the box diversity compliance rather than digging deeper to understand the barriers preventing underrepresented contributors from becoming the “most qualified candidate”. Take for example the development of experience and the critical first-time job. According to data provided by the US. Bureau of Labor Statistics in 2018 the unemployment rate of African Americans between the ages of 16-19 years old was 24.8% (double that of their white counterparts at 12.1%). Moreover, today in 2019, the unemployment rate of African Americans between the ages of 20-24 is 14.3%. To put these numbers in perspective, the highest rate of unemployment in America during the Great Depression was 24.9% and hovered around 14% from 1931-1940. Why is this number significate? Without experiencing creating first-time jobs Black and Brown contributors are failing to gain the necessary work experience which leads to higher salaries. Before we jump to conclusions of the causal nature of these huge employment gaps in Communities of Color, let us explore the second reason for D&I failure, Racial Discounting

Racial Discounting         

According to a study published in 2017 by researchers at Northwestern University, Harvard and the Institute of Social Research in Norway, racism was still a problem as it pertains to hiring top talent. For example, in one experiment researchers sent out resumes with similar levels of education and experience. One set of resumes were sent out with stereotypically Black or Latino names and another set were sent out with stereotypically White names. What they discovered, unfortunately, was that anti-black racism in hiring had gone unchanged from 1989-2015. The cause of this discounting could be best understood through the lens of Racial Economics, that is, the study of racism which builds on behavioral economics, the groundbreaking work of cognitive scientist Amos Tversky and Daniel Kahneman. Racial Economics focuses on the implications of concepts such as bounded rationality (i.e. the cognitive limitations on decision makers) and confirmation bias (i.e. a cognitive bias to support beliefs already held) on the economic flourishing of Communities of Color. For example, according to the National Center for Education Statistics, in 2016 Black women officially became the most educated group in America. However due to racial and gender discounting, in 2019 unemployment amongst African American women between the ages 20-24 still hovered around 11.4%. In other words, despite having similar qualifications and education; Black and Brown professionals are being excluded from consideration of entry-level positions. Let us consider now the final failure of D&I, Strategic Misalignment.

  Strategic Misalignment  

One Black Executive I interviewed stated, “Upper Management used to be a “Good Ol’ White boys club”, then companies gave us a little hope by implementing Diversity & Inclusion programs. What we got instead was a “Good Ol’ White girls club”. What this statement highlights, is that the strategies used for promoting gender equality have made noticeable progress. Although this progress is a step in the right direction as it pertains to the Diversity & Inclusion conversation if organizations fail to customize their strategies to address barriers such as racial discounting than what they will get instead is Diversity Illusion, that is, the false sense of D&I progress within their organization. The reality is that each underrepresented group has a different set of Ism’s in which to overcome and as such, requires a different set of strategies to make meaningful progress.

In conclusion, if leaders truly want to increase the opportunities for underrepresented contributors, then they must first stop attempting to address the symptoms of inequality and strike at its root. Meaning, we must move beyond policy formation and design talent acquisition and talent development systems that neutralize racial, gender, and other such biases. This is going to require a radical approach to Diversity & Inclusion. Organizations will need to form robust experience development initiatives in underserved communities. It will also require leaders to think through how racial discounting is affecting their bottom line or their organization’s ability to hire and retain top talent. Finally, it will require leaders to create newly tailored designed KPI’s which objectively move the needle for all underrepresented contributors. The bottom line is, we will never move past the Diversity Illusion without intentionally designing systems which neutralize cognitive biases.

At the end of every podcast recording, we like to ask our guest where God has them in this season. This is what Jimmy Song shared with us.

by Jimmy Song

Anyone who has been stealing must steal no longer, but must work, doing something useful with their own hands, that they may have something to share with those in need.

Ephesians 4:28

I love that verse first of all, because it says don’t steal. And I think at least in the fiat economy, I think we’re all guilty of that, whether we know it or not. And stopping from that and working with our own hands, creating something that is good. So he will have something to share with one who has need. That to me sometimes is interpreted as go and make money so you can give alms to the poor. For me it means go make something with your hands so that you can contribute something to civilization, to someone else in the market that can get value from whatever it is that you create.

And the verse is really about money and the role of money, which from a spiritual sense is a signal to you, to each individual to know how it is that you can provide most value to other people. And when the money is not corrupt, it’s the purest sort of signal for what we should be doing because it tells other people, I find what you’re doing, your goods or services more valuable than the money that I am willing to give it up for. So for me, that’s what it is. The other thing I’ll share is that this book for me is sort of like, as I mentioned before, the merging of two huge passions in my life, Christianity and Bitcoin.

I was at a conference last year, a big block boom. It was Bitcoin conference and it was in Dallas. And I gave a talk and somebody asked a question and I revealed that I was a Christian at that conference. And I also told the audience at the end, hey, I’m writing a book about this, if you’re interested, please. Talk to me afterwards, no less than 30 people throughout the next two days came up to me and told me that they are Christian, that they are Bitcoin. They were afraid of saying something. And for me, that was a huge validation of what God was doing, because it was clear that there are a lot of Christians that don’t want to be known as Christians. And a thing for me when I think about that is, wow, how sad is that? Because according to the Bible, these are Jesus’s words. He says, if you are ashamed of me, I will be ashamed of you before my father

My hope for your listeners is that they learn to be bold with their faith. And, you know, we tend to think, OK, God doesn’t want me to be ashamed of him, but then I’m going to get embarrassed. That’s not the way it is, at least for me. My experience has been that God has blessed me, that he wants me to be bold so that he can bless me and what I am doing. And this book has come out as a result of that. We’ve got a lot of reviewers from that conference that were able to chime in on Bitcoin and Christianity and give us some really good feedback that we incorporated. But for all your listeners that are thinking about investing better in these industries where, you know, it might not be cool to talk about Jesus, take a chance people about it, because God wants to bless you.

Article originally posted here by Access Ventures

by Vanessa Koenigsmark

In case you missed it, we are in the middle of a discussion about what economic agency is and looks like in the real world. We saw in last week’s blog how democratized investments models like Village Capital’s peer selection process can reroute capital flows to benefit entrepreneurs. The impact of this program comes from more than just the redistribution of power from one decision-maker to another. Breaking the barriers that excluded groups experience when accessing capital for entrepreneurial endeavors is a powerful way to address economic inequality.

Entrepreneurship To Build Economic Agency

Business ownership is a powerful tool to support wealth building. In the Tapestry of Black Business Ownership in America, AEO reports that black business owners have 12 times the wealth of black non-business owners and it’s not because they started out wealthier. Business owners tend to start out less wealthy while growing wealth faster than non-business owners. We can bolster the capacity for historically disadvantaged groups to fuel their own economic empowerment by reallocating resources to structures that support inclusive entrepreneurship.

When we look at economic agency through the lens of entrepreneurship specifically, we begin to see a new set of disparities as well as actionable steps to help address troubling trends. Wealth accumulation impacts who is able to become an entrepreneur, because of the importance of startup funding in ensuring business viability. Accordingly, BIPOC people continue to have lower rates of entrepreneurship than their white counterparts.

While only 1% of U.S. businesses ever raise venture capital, nearly 90% are male-led, 72% are white-led, and 78% come from the nation’s top 10 largest metropolitan areas.

When seeking outside capital to support business ventures, the trend continues. Women are less likely to receive bank loans from bank officers than men, even after accounting for objective venture characteristics. One study found that men were 60 percent more likely to secure funding than women when pitching the same business. Similarly, minority-owned businesses receive lower loan amounts on average than non-minority businesses of the same caliber.

The vast majority of venture capital dollars go to white male founders in the country’s largest cities. While only 1% of U.S. businesses ever raise venture capital, nearly 90% are male-led, 72% are white-led, and 78% come from the nation’s top 10 largest metropolitan areas. Less than 1% of venture deals go to startups led by LGBT+ founders.

Studies over decades have indicated that limited access to financial, human and social capital alongside racial discrimination, are partly responsible for the disparities in performance for minority businesses. Should minority businesses perform on par with their representation in the population, they would gross nearly $2 trillion in economic activity nationwide. This represents potential growth not just for our economy as a whole, but more importantly, the potential for improved economic agency for historically excluded individuals and entrepreneurs.

In Our Portfolio

Through our strategic investment in Collab Capital, Access Ventures hopes to combat these entrepreneurial inequalities, specifically for black-owned startups. Collab Capital is an investment fund leveraging financial, human, and social capital to help black founders build sustainable, innovation-centered businesses.

Collab Capital builds wealth for black entrepreneurs not just through traditional financial capital investments, but through intentionally crafted networks of mentors, investors and influencers. Their approach recognizes the exclusionary nature of the status quo and actively works to open up closed networks through diverse investor engagements. The fund’s Strategic Partners are selected and compensated based on their ability to help black-owned startups grow effectively. What’s more, the fund targets cities like Atlanta, Detroit, and Baltimore, which are traditionally overlooked by meaningful VC investment.

On a recent episode of our podcast More Than Profit, we talked with Jewel Burks Solomon, Managing Partner of Collab Capital, about why she started the fund. “I met investors who did not invest in my business because I was a black woman,” she said. “We are intent on disrupting the wealth gap by investing in black-owned companies.”

By investing in funds like Collab Capital, Access Ventures aims to subvert the flow of capital from traditional, often exclusionary, capital networks. Providing accessible capital options for black-owned startups, provides the opportunity for black entrepreneurs to build wealth for themselves, through their own ventures, and on their own terms. Join us next week as we conclude our conversation on economic agency by exploring Access Ventures’ regional fund Render Capital and an exciting new program being launched.

by Chris Meyer

Engaging Environmental Issues Through Shareholder Advocacy

How shareholder advocacy can make a difference

Editor’s note: This article was originally published on the Praxis Mutual Funds website and is reprinted with permission. 

Earth Day occurs April 22, as it has since its founding in 1970. Some credit Earth Day’s establishment as the beginning of the modern environmental movement. As a child, I remember attending school assemblies commemorating Earth Day. Speakers stressed the key environmental themes of the era such as “reduce, reuse, and recycle.” There was an emphasis on activities like picking up litter and planting trees, which we sometimes participated in during school.

My family also had our own environmental practices, such as recycling and planting thousands of trees on my grandparents’ property, which was barren from strip mining done decades before. Our church had a Creation Care Sunday that coincided with Earth Day and highlighted larger-scale problems and emphasized our role as stewards of the natural world.

These experiences contributed to my increasing understanding of the fragility of the Earth and the enormity of our environmental challenges. My interest in finance and public policy blossomed as I began to see systemic change as the best way to mitigate damage and encourage a more sustainable trajectory.

I joined Praxis Mutual Funds® nearly 15 years ago, at a time when “make Earth Day every day” had become the mantra. I’ve been privileged to work on environmental issues through shareholder advocacy, using the rights of stock ownership to promote corporate change. The future of our planet is top of mind in my work, whether the subject is the climate crisis, environmental justice, or toxic chemicals. However, moving from one seemingly intractable problem to another can become exhausting.

This Earth Day, I’m taking a step back to reflect on some of the achievements and positive developments in corporate environmental policy since I began my career, through the lens of shareholder advocacy. Here are a few examples of the progress I’ve witnessed:

ESG materiality
It’s hard to believe that a short time ago, it was an uphill battle to convince many companies and investors that environmental, social, and governance factors were material and worthy of consideration. Now, nearly all large-cap companies produce significant sustainability or corporate responsibility reports and routinely integrate ESG issues such as climate change and human rights risks into their core business operations.

Shareholder resolutions
When I began at Praxis, the goal of filing a shareholder proposal on environmental or social issues was to achieve a meeting with the company, or at least to get a mid-single-digit percentage of the vote to satisfy resubmission thresholds for the following year. Not only do proposals now generally receive a much larger share of the tally – and even an occasional majority vote – they often spur companies to make substantial policy changes. And proposals can make a difference even if they don’t end up on the ballot; about half of the resolutions Praxis has filed in the past five years were withdrawn by the shareholders because of negotiated agreements with the company.

Emissions targets
Climate consciousness has spiked in the past decade. Where it was once a struggle to get corporate recognition of the existence of climate change, companies now are going far beyond acknowledging the climate crisis and setting ambitious targets for emissions reductions, even in lieu of public policy mandates. For example, most of the electric utilities Praxis has engaged have made net zero carbon emissions commitments by 2050 or earlier, and all have set major emissions reduction targets. Shareholder dialogues are now largely focused on the practical, incremental steps needed to achieve these climate goals as quickly as possible. This is true progress.

Productive dialogues
Perhaps the most important development in corporate engagement has been the willingness of companies to invest real time and effort in speaking with shareholders on environmental and social issues. When I started in this field, we felt lucky to gain an audience with the general counsel and head of investor relations, let alone anyone relevant to the issue at hand. As companies have become more accustomed to speaking with shareholders – and shareholder concerns have regularly proven to be prescient – they increasingly see dialogue and relationship-building as valuable and mutually beneficial. This bodes well for shareholders and stakeholders who seek sustainable corporate change.

Despite the fundamental progress that companies have made, there’s no question that the quest for sustainability has so far fallen short, as witnessed in publications such as the latest Intergovernmental Panel on Climate Change reports. If the Earth becomes uninhabitable, frankly, nothing else matters. At the same time, however, it’s fair (and healthy) to take stock of what has been achieved in the recent past. For me, this progress offers a basis for hope on this Earth Day. Perhaps it can provide hope and encouragement for you too.

About Praxis Mutual Funds

Founded in 1994, Praxis Mutual Funds is a leading faith-based, socially responsible family of mutual funds designed to help people and groups integrate their finances with their values. Praxis is the mutual fund family of Everence Financial, a comprehensive faith-based financial services organization helping individuals, organizations and congregations. To learn more, visit praxismutualfunds.com and everence.com, or call 800-348-7468.

Consider the fund’s investment objectives, risks, charges and expenses carefully before you invest. The fund’s prospectus and summary prospectus contain this and other information. Call 800-977-2947 or visit praxismutualfunds.com for a prospectus, which you should read carefully before you invest. Praxis Mutual Funds are advised by Everence Capital Management and distributed through Foreside Financial Services, LLC, member FINRA. Investment products offered are not FDIC insured, may lose value, and have no bank guarantee.

Author

Chris Meyer, Manager of Stewardship Investing Advocacy and Research.

Chris joined Praxis in 2006. He leads the company’s work in corporate engagement and supports its investment screening and proxy voting functions. He has led shareholder dialogues on many pertinent issues such as climate change, toxic chemicals, child slave labor, and predatory credit card practices with multinational companies. Connect with Chris on LinkedIn.

[Photo by Singkham from Pexels]

Article originally posted here by GIIN

by GIIN

To achieve a future where impact considerations are integrated into all investment decisions, the GIIN is working with diverse communities to mobilize more capital for impact investing. The faith-based investing community is one of those with whom the GIIN has been deepening ties.

Examples of faith-based investors leading responsible investing initiatives date back centuries, and by expanding into impact investing, these investors have an opportunity to achieve measurable, evidence-backed impact that aligns with the values of these diverse faiths. Given the vast wealth held by faith-based investors, activating their assets toward impact can lead to substantive contributions to global development agendas, such as the UN Sustainable Development Goals (SDGs) and Paris Climate Agreement.

Engaging Faith-Based Investors in Impact Investing outlines key insights from interactions with the faith-based investing community along with proposed engagement strategies that could be assumed by field-building organizations—like the GIIN and others—to support faith-based investors on their impact investing journey.

Read his whole report here on the GIIN website!

Engaging Faith-Based Investors in Impact Investing