ImpAlph: Back to basics for impact investing: Asking the right questions

“More enthusiastic than ever to participate in this election, I volunteered to go door-to-door either asking for votes or trying to cure early ballots that had been rejected in the race to the election day finish line,” writes Courageous Capital’s Laurie Spengler. “As I knocked on doors in North Naples in the days leading up to the election, I found myself wondering when the last time either party came knocking.

“What I learned through this experience, is that I was asking the wrong questions…or at least not the right ones.

“As I stood on people’s front porches, masked and ready to make a difference in whatever way I could, I was reminded of the power and energy that comes from trying to understand people’s real needs. It is this power and energy that should sharpen the focus of our impact investing community as well as the next US administration.

“I have lived outside the US for much of my professional life and have voted absentee for every presidential election since my graduate school days. Like many, my life has taken on new dimensions during COVID-19. I am caring for my mother in Florida while attending to my work-life through the daily schedule of zoom meetings and other virtual interactions.

“I embraced this opportunity to participate in the electoral process with vigor. Despite the hyperbole about the unprecedented nature of this election, I fully believed that this was the election of my lifetime. The stakes were so exceedingly high, with decency and democracy at stake alongside the policy responses of government on issues from the pandemic, to income inequality, to climate crisis and systemic racial bias, to international standing and much, much more.

“Going door to door, speaking with voters, I kept feeling that I was asking the wrong question. Rather than asking how the occupant of the house and her family were doing in terms of access to healthcare, quality of education, security of income, and protection against the coronavirus, I was singularly asking whether they supported Joe Biden for President. But the question I should have been asking is: when was the last time someone from the democratic party connected with you and asked about your key issues, your priority concerns, your real needs?

“Naples, Florida is in Collier County, Florida. Registered republicans outnumber registered democrats 2:1 with a rising group of independents. While Naples is an affluent community by national standards with median housing price just above $350,000, like every community, there is a growing gap between those who have benefited from the tax and other economic policies of the past four years and those whose struggle has become more difficult.

“My personal North Star is an inclusive, just, equitable, sustainable and resilient society for all. My professional pursuit is to mobilize financial capital to propel us towards that North Star, appreciating the limitations of financial capital as but one tool needed to arrive at that North Star.

“So what do I take from this election with respect to impact investing? Impact investing needs to demonstrate its relevance that is rooted in meeting people’s real needs. While many of us view impact investing as the ‘new normal’, the only logical means to make investment decisions that have a chance to build a better world, the barriers to change remain real and stubborn. We must resist the temptation to highlight only those most pioneering solutions, the introduction of meatless meat and other extraordinary innovations. Rather, to be relevant, we must celebrate impact solutions that address the basic needs of most people – employment and job quality, personal safety, affordable healthcare, quality education and a chance for building wealth and prosperity for one’s family. And we must do so in a way that conveys respect for one another’s lives.

“What does this mean for me as a member of the impact investing community? I have three fundamental take-aways:

“1) Ensure that the deals I structure and bring to market respond to people’s priority needs and pain points – what pain point is this deal solving?;

“2) Look beyond the deal narrative and probe to understand the lives that are being impacted – or not – by the product or service that is at the core of the transaction; and

“3) Prioritize local providers and operators for it is people on the ground who both understand best the pain points being met and who have a vested interest in strengthening the fabric of the community in which they live and operate.

“Meeting people’s real needs, and particularly people we may not know or see, must become an explicit commitment of the impact investing community. If not, we run the risk of squandering our potential as a community. If our aspiration is to be the default paradigm for investing financial capital, we must be relevant in every community.

“And I will surely show up early for the next election, knocking on doors not simply to ask for votes but to see how people are doing.”

Laurie Spengler is founder and CEO of Courageous Capital Advisors.