All Things Impact.

private capital & the public good

All Things Impact for June 24: "the most significant event in British history since the second world war"

Brian WalshComment

Hi friends,

Welcome to All Things Impact, a newsletter of interesting things I've seen from across the spectrum of impact: effective philanthropy, impact investing (in the private markets), responsible investing (in the public markets) and a wildcard topic. 

Here are four links worth your time (plus job postings and a calendar of upcoming events): 

1. Effective Philanthropy: What’s in a measure? Don’t be seduced by quantification
In the Stanford Social Innovation Review, my friend Fay Twersky, the director of the Effective Philanthropy Group at the William and Flora Hewlett Foundation, reviews Sally Engle Merry’s book, The Seductions of Quantification: Measuring Human Rights, Gender Violence, and Sex Trafficking. In her review, Fay discusses the social sector's use of indicators for measuring progress:

"Merry, a professor of anthropology at New York University, offers a thorough critique of what she describes as the “indicator culture” that shapes policy around the globe. Indicators are all systematic ways of organizing, comparing, and presenting information about various social phenomena, but they come in many forms. Adding to well-known economic indicators like gross domestic product, the international aid community is increasingly focused on designing new indicators to inform humanitarian and development work. It is with these that Merry takes issue.
As its title suggests, Merry’s book encourages us not to take these indicators as unvarnished facts: Don’t be seduced by quantification. Instead, Merry wants us to remember that indicators draw on subjective information about social phenomena, quantify it, package it, and then represent it as objective and reliable. “Quantification has a great deal to contribute to global knowledge,” she writes, “but it is important to resist its seductive claim to truth.”
…[Merry] argues that the largely Western experts who develop such indicators simplify complex on-the-ground situations in ways that often fail to account for crucial cultural context. The quest for technical expertise shuts out participation from the Global South, and the people whose circumstances the indicators measure typically lack a voice in their construction. Merry argues this is risky because what gets measured shapes our sense of what needs to change. For a more nuanced understanding, she suggests we supplement quantitative measurements with qualitative, ethnographic methods…
If you can get through the book, you will undoubtedly emerge a more skeptical consumer of the various indicators that get tossed around as truth.”

2. Impact Investing: The ImPact & the $30 trillion in private wealth held by the world’s wealthiest families

ImpactAlpha’s David Bank interviews Abigail Noble for the “Returns on Investment” podcast. Abigail was formerly of the World Economic Forum and now is the first CEO of The ImPact, an organization working to help wealthy families devote more of their investments towards impact. (Disclosure: I am a host on the ROI podcast, and Liquidnet is an investor in ImpactAlpha through the Liquidnet Impact Fund, a donor advised fund managed by ImpactAssets). 

“I want to get the top 100 to 200 wealthiest families in the world to make impact investments,” [Abigail] says. “If they’re making none, make one. If they are making a few, start to think about it as a strategy for a diversified portfolio.”
Noble says wealthy and influential stakeholders are key to making the inclusion of social and environmental value the norm, not the exception, in investing and business decision-making. The 200,000 families around the world with more than $30 million in assets hold nearly $30 trillion in assets, roughly double the annual output of the United States.
“We’re interested in the [aggregate] change from where they are now to where can be next year, to where they can be in the future,” Noble told ImpactAlpha in a podcast interview.
Indeed, in some wealthy circles, impact investing is beginning to take its place next to philanthropy. The ImPact network of wealthy families is inspired by the Giving Pledge, Bill Gates’ and Warren Buffett’s network of billionaires who have pledged to give away the majority of their wealth. The ImPact asks members to “Make The Pact,” and to go beyond philanthropic giving to use the power of their private investments and the broader capital markets to solve global challenges….
High-net worth individuals committed to social and environmental impact have long been seen as the early adopters of impact investing practices, but the expected flood of capital has yet to arrive. Obstacles include the paucity of performance data, a lack of education around investment strategies, and peer support to overcome resistance from other family members and, sometimes, financial advisors. “We’re seeing both a mindset gap and an action gap,” says Noble.

3. Responsible Investing: Facebook, the Chan Zuckerberg Initiative, and corporate governance

Responsible investing often involves an analysis of a company’s non-financial, ESG – Environmental, Social, and Governance – factors. Corporate governance – who has decision-making authority at a company – is a critical dimension to this analysis. Matt Levine of Bloomberg looks at Facebook’s new share structure allowing Founder and CEO Mark Zuckerberg to “do more or less whatever he wants, even though he doesn’t own a majority of the company" as he sells some of his Facebook shares to support his family's philanthropic efforts:  

“There is a social contract at most companies, partly explicit and partly implicit, that defines the roles and rights and duties of shareholders and directors and managers. And then Facebook has a different contract. For instance, at most companies, there's an annual meeting, and shareholders show up and vote on stuff, and if the shareholders are unhappy they can vote for changes, and while those changes aren't necessarily immediately self-executing, everyone has to at least pretend to take them very seriously. But at Facebook, Mark Zuckerberg has enough votes to approve whatever he wants, so the annual meeting is just for ineffectual shouting.
I feel like part of the contract at Facebook is, or really ought to be, that if you buy shares, you should not also complain about the voting structure that you bought into. But people do:

One shareholder spoke out to protest the new share structure, saying it wasn’t responsible to have one person having the most say in the company’s direction.
“It will continue to become impossible for outside shareholders to have any input on company decisions,” said Christine Jantz of Northstar Asset Management, which owns $5.4 million in Facebook common stock. “We are very concerned about governance risks.”

Now, to be fair, Jantz is complaining about the new share structure involving non-voting Class C shares, which is even more shareholder-unfriendly than the old one. She's not complaining about the voting structure she bought into; she's complaining about the even worse voting structure that will succeed that one. But the voting structure she bought into lets Mark Zuckerberg do more or less whatever he wants, without any shareholder input, including voting for a new and even worse voting structure. So the new, shareholder-unfriendly Facebook governance structure was in a sense contained within the old, shareholder-unfriendly Facebook governance structure. "It will continue to become impossible," Jantz complains, correctly.
I guess the point is, if you care about corporate governance, maybe just don't buy shares in huge companies that are controlled by individual founder-shareholder-CEOs? Certainly don't go to the annual meeting to complain; what does that get you?”

4. Wildcard Topic: "the most significant event in British history since the second world war"

Martin Wolf writes in the Financial Times about the shocking results of the UK voting to leave the EU:

"The hinge between the EU and the English-speaking powers has been snapped. This is quite probably the most significant event in British history since the second world war. It could mark an important moment in the west’s retreat from globalisation. It is, above all, a victory of the disappointed and fearful over those confident in the UK’s ability to adapt to change and lead in Europe.
The geography of the outcome reveals that this has also been a revolt of the provinces against a prosperous and globalised London. It is also a revolt against the establishment — political, economic and commercial. Meanwhile, those who consider themselves losers and those who resent the changes in their country, notably the mass immigration, have won. They have torn down the structures built up by the establishment over half a century. The Labour party, to mention one notable casualty, must have lost a huge part of its support.
Yet the UK might not be the last country to suffer such an earthquake. Similar movements of the enraged exist elsewhere, notably in the US, with the rise of Donald Trump, France, with the rise of Marine Le Pen, and even Germany, with the rise of Alternative for Germany. Others might follow. But, in an act of terrible self-mutilation, the UK has led...
Businesses who depend on their ability to employ European nationals must also reshape their operations. Many, surely, will want to move within the EU single market. Such decisions will not have to be made at once. But they will adversely affect investment right now.

In economic life, the future is always, to an extent, today."

5. Job Postings

6. Upcoming Events
June 23-July 2  Aspen Ideas Festival (Aspen, CO) Effective Philanthropy
June 29-30 Future Finance & Social Innovation (Toronto) Impact & Responsible Investing
June 30 Innovative Strategies for Impact Investing Luncheon (Denver) Impact Investing
Sept 6-8  PRI in Person (Singapore) Responsible Investing
Sept 13-16  SOCAP (SF) Impact Investing
Sept 26-28 Exponent Philanthropy Conference (Chicago) Effective Philanthropy
Sept 26-28 ANDE Conference (Lessburg, Virginia) Impact Investing
Oct 9-14  Opportunity Collaboration  (Cancun Yucatan) Impact Investing
Oct 18  High Water Women (NYC) Impact Investing
Oct 18-20 Conscious Capitalism CEO Summit (Austin, TX) Responsible Investing
Nov 3-5  Net Impact (Philadelphia) Various
Nov 9-11  Sustainable, Responsible, Impact Investing (Denver) Responsible Investing
Nov 16-18 Independent Sector (DC) Philanthropy
Dec 7-8  Global Impact Investing Network (Amsterdam) Impact Investing

That’s it for this week. Help me spread the word about #AllThingsImpact to your friends and colleagues, who can sign up to receive this newsletter at All Things Impact. Please also send me any job postings, items of note, upcoming events, or compelling links you discover in your own journeys across the web (even things like this gif of corgis struggling with a 3 inch barrier).

Until next time, thanks for reading!

Brian Walsh
Head of Impact at LiquidnetFull Bio.