November 23, 2023 • 43 mins
What if you could have a better business and investment plan that properly supports your needs and goals for an abundant life? That's exactly the role of our guest on today's episode. Maya Philipson is the Co-Founder & Chief Operations Officer at Robasciotti & Philipson and Adasina Social Capital.
Adasina's foundation is to be a bridge between financial markets and social justice for the benefit of people and our planet.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:06):
What does growth look like in your business in your life as a business owner,
executive or individual,
you can live and lead with intention to create the change you want to see in your community and the world.
Welcome to the Discerning Strategies Podcast,
a place where we can see clearly and act wisely.
(00:31):
Hi,
everyone.
Welcome to the Discerning Strategies podcast and I am your host Michael Messer and I am delighted to be joined today by Maya Philippson,
the co-founder and Coo of Addison,
the social capital.
She uses she,
her pronouns and she is going to talk to us today about what social impact investing is and how we can just do better business in general uh for the world.
(00:54):
Hey,
Maya,
how's it going?
Hi,
Michael.
Thank you so much for having me.
I'm so excited to join you virtually.
Um I'm here in San Francisco,
California on Aloni Land and I'm really thrilled to talk to your listeners about what we do here at Adana and also just,
um you know,
how we can make business overall a more justice oriented and better place for ourselves and our employees.
(01:20):
No,
absolutely.
Um I mean,
it's a really grim time in the world right now.
It is tough.
Uh,
a lot of people,
a lot of people I think are,
uh,
are suffering a little bit.
So,
the thought of having business be part of the solution to make a more just and equitable world I think is so attractive to so many people.
(01:41):
Uh,
tell us a little bit about how Ataca works and,
and what you're doing in that realm.
Absolutely.
So I think it's important,
um,
for me to always say that with America,
you know,
everyone changes jobs frequently.
I have actually been working in finance and financial services my entire adult life,
I started working in finance when I was 23 years old.
(02:04):
And,
um,
that means that I've gone pretty deep in some of the different areas of finance and I've kind of lifted up a lot of the rocks and seen the nasty moldy bugs underneath.
Um,
so I started my career as a financial planner or a financial advisor and I,
(02:25):
um,
worked in some large companies and then my business partner and I actually owned a wealth management firm,
which we merged into a large West Coast uh firm in 2020 started Adena Social Capital.
Um at,
at Aina,
we have a little bit of a different take on finance,
(02:45):
the finance work instead of working directly with individuals that I did in my wealth management,
my financial planning practice.
Um I create social justice investment products.
And I specifically work on kind of bringing bridging social justice and nonprofit organizations bridging those concepts and bringing them to finance.
(03:08):
Um And it is very exciting work.
Seems like that Gulf feels so huge.
I mean,
when you talk about social justice and um implicit in that is a little bit of grassroot roots work,
maybe how do you bring that into the finance realm?
Like what's the,
what's the connectivity there?
Absolutely.
So,
(03:29):
you know,
finance can be a very stratified and rarified place.
Um And I think what's also very difficult is that a lot of people are affected,
almost all of us are affected by our economic and financial system,
but not all of us are market participants.
And when I say market participants,
what I mean is people who own stocks or bonds.
(03:51):
Um you know,
one of the things that we see with the rising levels of inequality in America is we see a families and individuals that are able to build wealth by owning stocks and bonds participating in the market.
Um And we see people who are too economically squeezed um to do that.
(04:11):
And so all of us are touched by the behavior of publicly traded companies,
think of a big company uh like Walmart or Target,
right?
We shop there.
Um if they raise their prices,
it has an effect on my bottom line.
Um Even though I'm not an employee of one of those companies.
(04:32):
So the behavior of publicly traded companies impacts all of us whether or not we're able to participate in the stock market.
And so people who create investment products like myself,
um we're often very concerned as,
as well.
We should be about who is going to buy our products and what they're,
(04:52):
how much money they're gonna make.
And I'm definitely concerned about that.
Don't get me wrong.
Um But I'm also concerned about the voices of non market participants,
people who never have the opportunity to buy my products and curious about what they have to say and why they're not able to buy it.
And what can I do to bridge that divide?
You know,
it's interesting,
you,
you raise a good point.
(05:13):
I think a lot of times people don't actually think about how many economic decisions get made for the stockholder,
this Phantom guy that owns a share of stock,
right?
That's directing all of this capital and all of this money in our system.
But really that person absolutely isn't representative of all of us.
(05:34):
So ho how then do you,
how then do you effectively reach out to the people that have been kind of left behind or systematically excluded from the system?
Absolutely.
And it's something that we focused a lot on when we were building at Aina,
right?
How do we take the voices of non market participants and bring their wisdom um about the behavior of publicly traded companies how do we bring that into the conversation?
(06:00):
How do we bring that,
that knowledge into our investment products?
And what we found out is that we need to liaise with social justice organizations and nonprofit organization that represent those communities and represent those people who don't have that same type of economic voice.
(06:21):
I can give you an example that might,
that might make it a little bit easier to understand by all means.
Great.
So,
one of the things,
you know,
we,
we do,
um we do a lot of justice work in Adana and I'm a woman.
So it's my business partner.
And so we're very concerned with gender equity amongst companies and hiring practices.
We think about that a lot.
(06:41):
Um publicly traded companies are the largest employers in America.
So are they being fair to all their employees?
And so one of the ways that uh firms like mine um can say that they have a gender lens in their funds is they can look at the number of women on a board on a corporate board.
(07:04):
Um and say,
well,
if you have parity uh amongst gender on your board,
you're probably better for women.
The problem is that the number of women on the board doesn't necessarily perfectly correlate to whether that company um actually treats employees of all genders equally.
So we went and we spoke uh my business partner and I actually went to London.
(07:27):
It was a wonderful experience.
And we went to a gender investing conference and we started asking people what is actually a good,
what's a good metric?
What do we,
what do we wanna look at if it's not women on boards?
And we kind of led our way down to the Me Too movement.
And we started talking with some of the leaders of the Me Too movement.
And they told us that a lot of publicly traded companies have mandatory arbitration policies for sexual harassment.
(07:54):
And if you have a mandatory arbitration policy for sexual harassment,
it enables serial sexual harassers to continue kind of working and they just get moved sort of from department to department and the arbitration makes everything incredibly private.
It takes it out of the courts and of course,
companies are the ones who are paying the arbitrators.
(08:16):
Um frequently the people who are coming to the arbitration don't even really know what's going on.
And so they said,
all right,
if you can make publicly traded companies remove mandatory arbitration for serial sexual harassment,
you're gonna get more people specifically,
mostly women,
um specifically mostly women in lower paid jobs where there's a big power imbalance between themselves and their managers.
(08:41):
You're gonna make a better work environment for them.
And you're going to encourage companies to have actually proactive policies around gender,
which sometimes they couldn't have with their uh arbitration policies.
And so we worked out um a campaign,
we start a campaign called Force the issue where we just asked publicly traded companies starting with some of the largest,
(09:04):
we just asked them what their policies were around a forced arbitration for sexual harassment.
And simply by asking them,
we were able to have some of those companies change their policies and to make a long story short,
it's now illegal um to have uh policies uh that require arbitration for sexual harassment.
(09:25):
Right.
Wow.
That's a really interesting example because,
you know,
having a large corporate finance background myself,
like,
I can only imagine how that conversation might have kicked off.
That is probably,
uh what was not well received.
(09:45):
How,
how do you go about,
um,
how do you go about getting people's attention?
That's a great question.
Um,
when you say people,
do you mean people who are like our community partners or the corporations themselves?
Well,
I was thinking corporations asking the question but,
uh as a follow on,
(10:06):
maybe on,
onto that,
it's,
let's talk a little bit about the grassroots partners and the coalitions because you're,
you're coming from very different places.
So I can imagine there's a bit of a culture shock,
even having a conversation to kick off with them as well.
Absolutely.
Absolutely.
And,
you know,
one of the things that we have the most challenge with is talking to some of our social justice partners,
(10:29):
that's what we call these nonprofit organizations,
getting them to understand that um,
economics is actually a tool that they can use because they're very used to protesting.
Now,
I love a good protest.
I love a good protest,
but they're used to protesting.
They're used to letter writing.
They're used to call your senator.
Um They and me,
(10:49):
maybe,
maybe they're used to like a boycott of a particular uh company,
but they're not used to trying to get companies to change their policies overall and the economic power to do so.
So we have to do a lot of education to get them to understand um how they can use economic levers to change the behavior of publicly traded companies.
(11:12):
Um And how they can't because sometimes they're not,
they're not useful for every particular situation.
It I,
I imagine that there's probably rightly so as some deep seated mistrust against financial services,
right?
Because this is a sector that I think so many people,
(11:34):
whether you're not,
whether or not you're in the social justice space.
I mean,
even people we know in our lives feel victimized uh in some respects,
it feels sometimes exploitative and so,
absolutely,
what's the key to,
I guess building trust maybe with some of those people on the ground to say,
hey,
I know that you've had this experience or that you have this predisposition,
(11:57):
but we actually want to ally with you and we think this is a tool to actually create change from the inside.
Absolutely.
I mean,
I think that um it's such a nice,
nice segue into some of the other things we're gonna talk about because I think the tools for that are similar to other tools in business.
It's basic good,
thoughtful communication,
(12:18):
you know,
starting with acknowledging the harm that has been done,
even if um I and my firm didn't cause the harm,
we're still part of a harmful system.
So acknowledging the harm,
placing ourselves within the context of finance,
helping people understand where we are and being super transparent about our goals and then allowing people to,
(12:42):
you know,
opt in or not or to the level that they're comfortable with.
Um We definitely,
we never interested ever in forcing anyone.
Um But even beyond that,
if we come to an organization,
we have them understand what it is that we're doing and they decide for whatever reason that the work that we're doing is not for them as long as we've left them with more knowledge and a better opinion of us than they started with.
(13:09):
Like we count that as a win.
Absolutely.
This,
this feels like uh this progress is measured in steps,
not miles because you're,
you're really working to undo kind of a long period of experience here.
How is,
how has it been to try to coalesce over the period of time that you've had a Acena coalitions in support of,
(13:35):
of this change that you're describing?
It's been great,
it's been great and I think um we do a lot of our work most of our work in coalition because,
you know,
we're still,
we're still a new firm and we're,
we're,
we're small,
but we're mighty.
Um but we are very much all stronger together.
And so working with coalitions,
working with trusted partners,
(13:56):
not only enables us to move more money and power.
Um but also,
I truly believe that we get a more nuanced view and a better result um by hearing a lot of different voices and having lots of people who bring different,
slightly different perspectives on the same topic to the table.
(14:17):
You know,
it's interesting because there's always strength and diversity.
I think we,
we,
we agree on that.
Um But sometimes it's so hard when you're up against a monolithic system that definitely is oriented on very different things,
profit primarily than you are.
How do you,
how do you end up speaking with one voice or is it necessary even to speak with one voice when you do this work?
(14:42):
Is it just,
is it,
is,
are the numbers and the solidarity more important or is it the message?
Hm.
That's a really good question.
Um You know,
I think that part of the way that we,
I think it,
the solidarity is very important.
Um And there are certain things where the numbers uh are more important.
(15:05):
And so what we,
what we find is that with many,
many coalitions um is that they start out and they are very broad.
So there are coalitions that say things like we want fair wages.
That's great.
I want fair wages.
What does that mean?
And what does that mean to you?
(15:26):
And what does that mean to people in a different industry?
Um,
and what does that mean to people who live in different geographical places?
And so you can take that coalition once you decide,
um,
that you all want fair wages and you can sort of split into smaller pieces and not split in a negative divisive way,
(15:49):
but split in a thoughtful generative way.
And so you can have people who live in California,
for instance,
where the minimum wage is $15 an hour,
you can have people who are working um to take the legislation that we have in California here and export that to other states where the minimum wage uh follows the federal minimum wage of 725 an hour.
(16:11):
Um And you can have people in those states who are talking about how um the minimum wage hurts them and they don't need to be in,
they don't need to be in conflict with the people in um California,
they can just be working on different issues.
And so people can often,
especially in community organizing of any type.
(16:32):
Um They can let divisions become terrible pieces that,
that push things apart.
Um But that doesn't have to be the answer.
The answer can also be you can have people just working on slightly different things that all agree at the same general principle.
So,
going back to my original question,
I think I'm starting to infer maybe where you might be going with this is how you get the,
(16:57):
the corporations to pay attention numbers.
It's coalitions,
right?
Like,
that's what you're talking about.
How does that work?
Like,
in practice,
like,
let's say Walmart,
like,
you know,
if there's a topic that you need to go up against Walmart,
it's the largest retailer in the,
you know,
country,
if not world,
right?
So,
yeah,
next to Amazon.
But you know,
(17:17):
how do you get a seat at that table to begin with?
Absolutely.
So I wanna call out one of our really big movement partners who's also just a fabulous group of people,
um,
who is the interfaith center for corporate responsibility.
Go check out IC cr the interface center for corporate responsibility is amazing.
(17:39):
Um They are a coalition of faith groups of all different kinds of,
uh,
people of all different kinds of faith.
Um,
who are exactly as it says in the name.
They work on overall corporate responsibility and we are members,
even though we are a corporation,
(17:59):
we are not a faith group.
Um,
we are members and we do a lot of work with them.
Um,
and organizations like them,
um,
do a really good job,
um,
us CIA sustainable investment for,
you know,
sustainable investment for is another type of that type of organization.
Um And then we form some of our own coalitions here at Adana.
(18:20):
Um,
they do a really good job of,
sort of being a container for those issues and then the members of those organizations can kind of look at all of the emergent issues and decide which coalitions they want to be part of.
Ok.
So it's like,
it's sort of showing up in as,
(18:40):
as,
as one,
but it's like an army of many.
Right.
Exactly.
Exactly.
And that's,
that's how we make change.
Right?
It's absolutely.
So help us understand like what are some of the areas that ada is specifically focused on?
It feels like you don't have to look very far to just see this myriad of issues confronting our world and our society and our planet.
(19:05):
Um How do you get focused and choose the ones that you want to take on?
Absolutely.
So we,
you know,
we organize,
our kind of organizing principle is around our um four inter we call them interlocking levers of change.
So our four are sort of four categories of things that we push um corporations on and they are um economic climate,
(19:28):
uh gender and racial justice.
Those are kind of our four buckets and of course,
we,
we love things and issues um like serial sex harassment that cover multiple of those,
right?
Which does a very good job of covering an economic bucket and a gender bucket,
um minimum wage and something called a sub minimum wage.
(19:50):
Uh,
which for all your listeners is $2.13 an hour.
If you receive tip.
If you are a quote unquote tipped worker,
the federal minimum wage is $2.13 an hour.
Legal.
Oh,
it's absolutely shocking.
It's really slave labor.
Uh,
well,
that actually happens when you're in prison.
(20:12):
I can tell you about that too.
I get really upset about it.
Um,
but,
uh,
sub minimum and minimum wages are things that,
um,
cross so many of our focus areas.
They cross a gender focus area,
they cross a economic focus area,
a racial justice focus area and potentially a climate justice area as well,
(20:36):
which people wouldn't necessarily think.
Um,
but being climate aware can be very,
very expensive.
Oh,
yeah.
One of,
one of the premises that I have of this podcast is,
uh,
trying to help smaller businesses understand that social responsibility is not confined to mega corporations that are well resourced to do the work because my,
(20:59):
my worldview on business and I think where business is going in general is that our consumers,
our markets,
our,
our communities are so hungry for responsible business.
And that means all of us and those of us that want to lean into figuring out how to be a better contributor to our communities.
(21:19):
However,
that looks like it doesn't mean that we're filling out,
you know,
ESG surveys and,
and doing these huge deep dives on our carbon footprint.
Although that's great if you can do it.
Uh,
sometimes that might just mean,
showing up in your community and doing the good thing because that's what your community needs,
right?
100%.
And,
and I think,
(21:40):
um,
you mentioned a little bit earlier that,
you know,
you and I agree that diversity is,
is always better and I feel like there's a,
a side sort of corollary to that around social responsibility,
which is that,
you know,
every step that you take um towards climate justice,
towards racial justice um is the right step and it doesn't matter if it's a step of a centimeter or a step of 10,000 miles,
(22:08):
you're going in the right direction.
Um And,
and that's something that I deeply and truly believe.
And there's so many small tweaks that I have learned from my years in business and that I've put into practice in the structures and policies that Acena that move us closer as a firm um to a place of,
(22:31):
of justice and we're not there and it's really hard to be there in finance,
but every step we take moves us closer.
Yeah,
I,
I know from talking to you and,
and that representation is really important and,
and it's important,
it's important in terms of what you're,
(22:51):
you're trying to do.
You're,
you're trying to get people that are underrepresented and their voices heard in the financial markets as part of your,
your overall goal and objective but representation is also really important internally with an atta um tell us about that.
Absolutely.
So I think uh representation is important for me for a lot of reasons.
(23:13):
And I think it comes from,
it comes from many places,
but it also comes from,
as I said earlier,
spending my whole career in finance,
finance is a very,
very white and a very male um industry.
And it's also one that's dominated by people who have a certain level of attained education.
So everyone looks kind of the same and has the same background and comes from the same uh part of this,
(23:41):
the same place.
Um And so one of the things that I see in finance and this is very topical because I feel like Sam Bank and Fried was just,
you know,
indicted for theoretically almost 100 and 30 years.
Um Those people keep creating the same types of systems and we know what those types of systems get us late stage capitalism that is incredibly extractive and is destroying our planet.
(24:10):
I would,
I like to try something else.
I don't have a guarantee that it will work.
But I'm pretty sure if I put different inputs into the system,
I'll get a different output and the output I'm getting right now is not good.
So I'm willing to try something else,
you know,
so,
you know,
atta like you and,
and your co founder,
(24:31):
you know,
atta seen it is a,
is led by BPO woman of color LGBT Q plus,
identifying individuals.
Uh And you've got incredible representation in terms of like who's on your team and that's all intentional.
That's my design,
right?
It is absolutely because we're trying to create,
(24:54):
you know,
within the structure of finance.
I still,
you know,
I have a asset management firm,
but I'm trying to create um something else and I'm trying to create a system within finance that can move us to a slightly better place.
(25:17):
I mean,
I,
you know,
I,
I'm like,
I'm a gay man that has worked in,
in finance for a long,
long time myself and I mean,
it is not an easy place for the LGBT Q community.
Um I mean,
even like recently,
I mean,
within the last like seven years,
(25:38):
I can remember um so many people around me were unable to kind of show up and like be themselves at work for organizations that get,
get like,
you know,
100 on the HR C equality index.
And I'm like,
oh,
my lived experience is so fundamentally different,
(25:59):
so different.
Um What's it been like,
you know,
even with your peers that are not in the social impact space,
what's it like to,
to like,
try to raise money and then deploy that money in a system that almost by design is gonna look at you as like,
well,
who are you or you're not a player?
Why should I be interacting with you?
That's what does that look like?
(26:21):
It's very difficult and it,
it's,
it's uh it's interesting that you frame it that way because um one of the things that we do as um asset managers is when we create products and we want to sell those products to large uh clients.
We go through something called a due diligence process.
(26:41):
And within a,
a due diligence process,
we get given a questionnaire and we get given,
you know,
reports that we have to fill out and we fill those reports out and they give us kind of a grade about our,
whether we can be sold to them or not.
And my business partner Rachel said something so interesting when we first started filling out those questionnaires and she said that um deviation in finance is seen as an error,
(27:09):
it's seen as a problem and I have a firm full of deviation.
And so I am almost automatically the work that I do.
And the way that I do it is not seen as new and fun and exciting.
Um It's seen as a problem.
It's a deviation from the norm.
It's so funny you say that.
(27:30):
So,
you know,
long time risk management manager over here,
it's like the standard deviation,
that is your measure of risk.
So the bigger the deviation,
the greater your risk,
right?
And so it's always like reversion to the mean because you can manage the mean,
you can't,
well,
you can manage the deviation,
but it gets more complicated and there's more brain damage.
(27:50):
Right.
Exactly.
Yeah.
It's funny,
isn't it?
And,
you know,
there's a foundation that was put out by the Knight Foundation,
a foundation study from the Knight Foundation came out in 2021 I believe.
And it looked at asset managers,
which is the firm that I own.
I'm an asset manager.
I'm institutional asset manager and,
um,
women and minorities together make up less than 1.4% of uh owners of asset management firms.
(28:21):
And so that means that over 98% of the owners of asset management firms are cis white men.
There are literally more men named Bob or Robert that own asset management firms.
And then there are women.
And so I actually asked the author of the study,
(28:41):
um why he put women and minorities together?
Because I'm like,
oh,
there's a,
you know,
like a sis Asian American man.
How,
how is that the same as,
you know,
a woman?
Um And uh he said,
so they would show on the graph.
Wow,
that's amazing.
Um So I am being my firm being owned by two women,
(29:02):
one of whom is black um identifying as queer,
we are just like in a teeny little minority.
And again,
what's interesting about that is those 98% of,
of men,
white cis men who own these asset management firms.
Quite a few of them are delightful people.
They're really lovely.
(29:23):
Individuals,
but they're within an incredibly toxic system and they keep putting the same inputs into that incredibly toxic system and are surprised when they get the same outputs.
Yeah,
that's the definition of insanity.
Right.
Doing the same output.
Right.
Exactly.
And I think that people who purchase products and people who understand that are starting to look for different types of managers,
(29:49):
different types of investment products.
Um,
and they're not finding them.
So there's this disconnect between what purchasers want um and what the system is giving them and that's,
that's where I live.
Yeah,
that's a,
that's an amazing opportunity.
Let's talk a little bit about this because I,
I wanna make sure people understand when you talk about,
you know,
asset management,
(30:09):
you're,
you're talking about fundamentally,
you know,
taking investment dollars from individuals and deploying them into the stocks of companies that meet your screens for economic climate,
gender and racial justice.
Yeah.
So when I,
(30:29):
when I go to a dinner party and I say I'm an institutional asset manager and people just stare at me what I say to them,
I'll give you like the 32nd thing where I'm like,
I'm like,
ok,
you person sitting across from me,
you have like a 401k or maybe a 403 B something like that.
And they're like,
yeah,
and I say,
ok,
within that you're invested in like funds like an exchange trade fund or a mutual fund.
(30:51):
And they're like,
Yeah,
maybe.
Um,
and I'm like,
great.
I make this and that's as far as we go.
So,
listeners,
I make those.
I,
I am so with you at,
at 20 plus years of being like,
I'm a banker and having the person on the other side of the table's eyes glaze over or if they do look interested,
(31:14):
they thought I said I'm a baker because they would much rather eat cupcakes for me.
Oh my God,
you about money management,
right?
I mean,
honestly I would rather sometimes eat cupcakes than hear about money management.
I'm an ex banker.
So,
hey,
you know,
I feel the same way.
Um So,
you know,
this is pretty hard nosed stuff when people give asset managers their money.
(31:38):
Yes,
they want to do good,
but they also want to get a return from that,
right?
Conventional wisdom would have,
you would have you think that all of these screens that you put um miss the fundamental point which is you're supposed to be maximizing shareholder value or the investors value.
(31:59):
Um I'm curious,
what would you say to that?
Conventional wisdom?
Yeah,
I would say two things.
Um The first thing I would say is that um I can show statistically because boy do,
I like math.
Um I can show that uh that is not always true is that,
you know,
in,
in funds like mine and in my section of the of the investing world,
(32:23):
there are plenty of investment managers who receive market like returns and I'm amongst them.
Um and those returns come from something that we're going to talk about,
which is diversification,
which is the concept that if you are invested in enough companies,
um you as those companies rise,
you will do just fine and it,
(32:45):
it holds out to be true.
Um There are some definitely like very targeted investments that hold maybe 10 or 20 companies um that don't do as well.
Um But if you're anywhere over,
you know,
100 companies,
you're probably just gonna do fine.
Um The other thing that I would say to that is that people generally um wouldn't walk into a cafe.
(33:10):
And if they walk into a cafe and they see that everyone in the cafe is uh let's say a white woman as I am and they walk into the cafe and they're a black man,
they probably wouldn't say um this is the best cafe ever.
They would probably be like,
this is not a diversified cafe and I don't belong here.
(33:32):
And so uh they would probably want to walk into a cafe that had a couple of cis white women having coffee and a couple of um Indian American women with their families having croissants,
like they wanted to walk into a cafe that feels welcoming and kind and thoughtful to them.
And so I don't really know why someone looks at investments and says we want exactly this one thing made by this one set of people because that's the best because if you ever had that experience in your real life,
(34:06):
you would be,
like,
terrified and feel like you're in a horror movie.
Yeah.
No.
Exactly.
Well,
you know,
and more generally speaking,
like if you're investing in companies that are meeting your screenings,
uh,
I would imagine,
um,
that,
you know,
so many studies have shown that socially responsible businesses outperform their peers because they do actually tap into the diversity of their employees.
(34:33):
They try to be inclusive,
they try to lead with values that actually attract,
um,
really loyal customers and have an impact on communities.
Do you agree with all that?
Absolutely.
And,
you know,
it's also,
it doesn't have to be,
people talk about,
well,
you know,
socially responsible companies,
diversity and,
(34:54):
and I like to bring it down to,
you know,
what is that?
And so I,
I'll give you an example in our products we screen out,
uh,
weapons manufacturers.
Ok.
And,
um,
I have family members,
well,
my cousins,
he's a big hunter and,
you know,
it's not that I am per se personally horribly anti Gunn.
(35:18):
He's,
he's a great gun owner.
He's very responsible.
I've eaten many things that he has hunted because that's the rule in my family.
If you kill it,
gotta eat it.
Um,
but we have all the weapons that we need on the planet.
We have more than all the weapons we need and we don't need more weapons.
(35:39):
Um,
someday in the future,
it is theoretically possible we might need more weapons,
but we do not need them right now and weapons are horrible ways to kill people.
We are just overrun with weapons and so we screen out all the weapons manufacturers and that has meant that with the war in Ukraine.
(35:59):
And unfortunately,
the situation that's happening right now in the Middle East that those companies have done very,
very well and our portfolio has not done as well well,
because it doesn't contain those companies and I can sleep well at night knowing that my money that I invest in my own company and my own fund is not going to create more weapons that I believe the world does not need.
(36:24):
Well,
you're,
you're touching on,
on this idea like I always think about returns outside of just a financial return,
right?
People that are gonna be drawn to out of scene and people that want to essentially vote with their wallet because that's really what we're talking about here.
People want to align their dollars and their investments with their values,
(36:47):
right?
That right there creates a return that we're not measuring absolutely.
And you know,
it's,
it's uh one of the,
the ways that we describe that return um is we think kind of about a spectrum and we call it,
this is not the most um fancy terminology,
(37:08):
but we call it the crime to philanthropy spectrum.
OK.
So think about it as uh you think about philanthropy on one side,
philanthropy has a zero financial return.
You are literally giving money away negative 100% financial return.
Um but it has 100% social return.
You feel amazing.
(37:28):
And so does the person who received that philanthropy on the other side of that spectrum,
you have crime.
Crime is like the best financial return ever.
You're taking something that you didn't have.
You have 100% financial return.
People who say crime doesn't pay are lying like it's amazing.
Um but it has a zero negative um social return,
(37:53):
right?
You're doing a horrible,
horrible thing.
And so that's pretty easy to understand,
but that can actually be applied to the to the economic market as well.
You have companies um that are stealing,
right?
If you're a company like I'm gonna pick on Exxon,
right?
They're stealing clean air and water from uh the present and the future.
(38:18):
And so there are there,
in my opinion,
they're committing crime.
Um and I don't want to be invested in that type of company no matter what it does,
I don't want to be invested in rilo no matter how great their returns are because they're participating in the killing of human beings.
And I don't be,
I don't want that type of financial return because I don't want that type of social return.
(38:39):
Um I also don't want to be going back to your comment about conventional wisdom,
I don't want to be invested in companies that don't make money because they're prioritizing their social impact over their market participation.
I believe that's a bad long term economic strategy and I am an asset manager so I care about the economics of things and so I want to find my sweet spot in the market with companies that are doing good and making money doing it.
(39:06):
Yeah.
You know,
that's,
that's always the struggle.
I,
I think how do you,
how do you find that balance uh between profit and purpose?
Right.
That's,
that's the journey I guess we're all on if we want to undertake the set of values,
right?
But the thing for me is,
(39:28):
and the message that that is so resonant in my life is that those two things are not mutually exclusive.
And I think a assume is an example of that.
I wanna be clear,
you're in this to make money.
Oh,
you wanna do good.
But you,
you're looking to turn a profit for yourself and that's OK.
I think it's great and I think I,
I don't know that I not only think it's good,
(39:48):
I think it's something to be celebrated because it shows that it is possible and achievable.
And I would actually be in a certain sense,
the more money that I make,
the harder I win.
I'm like,
I,
I can prove that uh investing this way with the set of people that I've hired and changing the financial system is a winning strategy.
(40:17):
And finance loves to win.
00,
yes.
00,
yes.
I,
you know,
it's funny this scene that's been going through my head and my own work,
uh,
working with people who really want to try to find a new way for their own business,
whether it's,
you know,
building a small business up and engaging with their communities as,
um,
they get really weighed down by the rules of business.
(40:40):
It feels really heavy and I'm the kind of a coach that comes in and it doesn't make me popular with some of my more traditional peers.
And I'm like,
what rule do you wanna break in your business?
Right.
Mhm.
So,
let me ask you what,
what rules are you breaking in at a scene that you're proud of?
Oh,
that's a great question.
Um,
I'm breaking the rules that you have to hire the same sort of people from the same sort of schools,
(41:06):
um,
to actually,
and have the same sort of knowledge and do things the same sort of way to actually win on Wall Street.
Um,
because I'm winning on Wall Street without those people doing different things.
I love that.
What would you,
what piece of advice would you give to a small business or medium size business that wants to break some rules but are terrified about doing it?
(41:30):
Oh,
that's a great question.
The advice I would give them is,
look,
look in those places where breaking the rules,
uh,
either doesn't cost you money or gives you economic benefit and overlaps with your values.
I love that.
Ah,
you can come join my team anytime Maya,
(41:50):
because we're like,
we are,
we,
you know,
we are affiliated Allied Spirit Animals in the sense.
Well,
on that,
uh,
on that,
thank you so much for your time.
This has been awesome.
Um Any place you wanna,
if,
if people want to learn more about atta or where should they go?
(42:11):
They can go to our website which is www dot Aina ad A SI N a.com.
They can also email us at info info at Adaa ad A SI N a.com.
Awesome.
Thanks Maya,
I really appreciate your time today and you really lit up this whole area of social impact investing for us so much.
(42:35):
Appreciate it.
Thanks for having me.
You can find Michael Messer at discerning strategies.com.
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(00:31):
Hi,
everyone.
Welcome to the Discerning Strategies podcast and I am your host Michael Messer and I am delighted to be joined today by Maya Philippson,
the co-founder and Coo of Addison,
the social capital.
She uses she,
her pronouns and she is going to talk to us today about what social impact investing is and how we can just do better business in general uh for the world.
(00:54):
Hey,
Maya,
how's it going?
Hi,
Michael.
Thank you so much for having me.
I'm so excited to join you virtually.
Um I'm here in San Francisco,
California on Aloni Land and I'm really thrilled to talk to your listeners about what we do here at Adana and also just,
um you know,
how we can make business overall a more justice oriented and better place for ourselves and our employees.
(01:20):
No,
absolutely.
Um I mean,
it's a really grim time in the world right now.
It is tough.
Uh,
a lot of people,
a lot of people I think are,
uh,
are suffering a little bit.
So,
the thought of having business be part of the solution to make a more just and equitable world I think is so attractive to so many people.
(01:41):
Uh,
tell us a little bit about how Ataca works and,
and what you're doing in that realm.
Absolutely.
So I think it's important,
um,
for me to always say that with America,
you know,
everyone changes jobs frequently.
I have actually been working in finance and financial services my entire adult life,
I started working in finance when I was 23 years old.
(02:04):
And,
um,
that means that I've gone pretty deep in some of the different areas of finance and I've kind of lifted up a lot of the rocks and seen the nasty moldy bugs underneath.
Um,
so I started my career as a financial planner or a financial advisor and I,
(02:25):
um,
worked in some large companies and then my business partner and I actually owned a wealth management firm,
which we merged into a large West Coast uh firm in 2020 started Adena Social Capital.
Um at,
at Aina,
we have a little bit of a different take on finance,
(02:45):
the finance work instead of working directly with individuals that I did in my wealth management,
my financial planning practice.
Um I create social justice investment products.
And I specifically work on kind of bringing bridging social justice and nonprofit organizations bridging those concepts and bringing them to finance.
(03:08):
Um And it is very exciting work.
Seems like that Gulf feels so huge.
I mean,
when you talk about social justice and um implicit in that is a little bit of grassroot roots work,
maybe how do you bring that into the finance realm?
Like what's the,
what's the connectivity there?
Absolutely.
So,
(03:29):
you know,
finance can be a very stratified and rarified place.
Um And I think what's also very difficult is that a lot of people are affected,
almost all of us are affected by our economic and financial system,
but not all of us are market participants.
And when I say market participants,
what I mean is people who own stocks or bonds.
(03:51):
Um you know,
one of the things that we see with the rising levels of inequality in America is we see a families and individuals that are able to build wealth by owning stocks and bonds participating in the market.
Um And we see people who are too economically squeezed um to do that.
(04:11):
And so all of us are touched by the behavior of publicly traded companies,
think of a big company uh like Walmart or Target,
right?
We shop there.
Um if they raise their prices,
it has an effect on my bottom line.
Um Even though I'm not an employee of one of those companies.
(04:32):
So the behavior of publicly traded companies impacts all of us whether or not we're able to participate in the stock market.
And so people who create investment products like myself,
um we're often very concerned as,
as well.
We should be about who is going to buy our products and what they're,
(04:52):
how much money they're gonna make.
And I'm definitely concerned about that.
Don't get me wrong.
Um But I'm also concerned about the voices of non market participants,
people who never have the opportunity to buy my products and curious about what they have to say and why they're not able to buy it.
And what can I do to bridge that divide?
You know,
it's interesting,
you,
you raise a good point.
(05:13):
I think a lot of times people don't actually think about how many economic decisions get made for the stockholder,
this Phantom guy that owns a share of stock,
right?
That's directing all of this capital and all of this money in our system.
But really that person absolutely isn't representative of all of us.
(05:34):
So ho how then do you,
how then do you effectively reach out to the people that have been kind of left behind or systematically excluded from the system?
Absolutely.
And it's something that we focused a lot on when we were building at Aina,
right?
How do we take the voices of non market participants and bring their wisdom um about the behavior of publicly traded companies how do we bring that into the conversation?
(06:00):
How do we bring that,
that knowledge into our investment products?
And what we found out is that we need to liaise with social justice organizations and nonprofit organization that represent those communities and represent those people who don't have that same type of economic voice.
(06:21):
I can give you an example that might,
that might make it a little bit easier to understand by all means.
Great.
So,
one of the things,
you know,
we,
we do,
um we do a lot of justice work in Adana and I'm a woman.
So it's my business partner.
And so we're very concerned with gender equity amongst companies and hiring practices.
We think about that a lot.
(06:41):
Um publicly traded companies are the largest employers in America.
So are they being fair to all their employees?
And so one of the ways that uh firms like mine um can say that they have a gender lens in their funds is they can look at the number of women on a board on a corporate board.
(07:04):
Um and say,
well,
if you have parity uh amongst gender on your board,
you're probably better for women.
The problem is that the number of women on the board doesn't necessarily perfectly correlate to whether that company um actually treats employees of all genders equally.
So we went and we spoke uh my business partner and I actually went to London.
(07:27):
It was a wonderful experience.
And we went to a gender investing conference and we started asking people what is actually a good,
what's a good metric?
What do we,
what do we wanna look at if it's not women on boards?
And we kind of led our way down to the Me Too movement.
And we started talking with some of the leaders of the Me Too movement.
And they told us that a lot of publicly traded companies have mandatory arbitration policies for sexual harassment.
(07:54):
And if you have a mandatory arbitration policy for sexual harassment,
it enables serial sexual harassers to continue kind of working and they just get moved sort of from department to department and the arbitration makes everything incredibly private.
It takes it out of the courts and of course,
companies are the ones who are paying the arbitrators.
(08:16):
Um frequently the people who are coming to the arbitration don't even really know what's going on.
And so they said,
all right,
if you can make publicly traded companies remove mandatory arbitration for serial sexual harassment,
you're gonna get more people specifically,
mostly women,
um specifically mostly women in lower paid jobs where there's a big power imbalance between themselves and their managers.
(08:41):
You're gonna make a better work environment for them.
And you're going to encourage companies to have actually proactive policies around gender,
which sometimes they couldn't have with their uh arbitration policies.
And so we worked out um a campaign,
we start a campaign called Force the issue where we just asked publicly traded companies starting with some of the largest,
(09:04):
we just asked them what their policies were around a forced arbitration for sexual harassment.
And simply by asking them,
we were able to have some of those companies change their policies and to make a long story short,
it's now illegal um to have uh policies uh that require arbitration for sexual harassment.
(09:25):
Right.
Wow.
That's a really interesting example because,
you know,
having a large corporate finance background myself,
like,
I can only imagine how that conversation might have kicked off.
That is probably,
uh what was not well received.
(09:45):
How,
how do you go about,
um,
how do you go about getting people's attention?
That's a great question.
Um,
when you say people,
do you mean people who are like our community partners or the corporations themselves?
Well,
I was thinking corporations asking the question but,
uh as a follow on,
(10:06):
maybe on,
onto that,
it's,
let's talk a little bit about the grassroots partners and the coalitions because you're,
you're coming from very different places.
So I can imagine there's a bit of a culture shock,
even having a conversation to kick off with them as well.
Absolutely.
Absolutely.
And,
you know,
one of the things that we have the most challenge with is talking to some of our social justice partners,
(10:29):
that's what we call these nonprofit organizations,
getting them to understand that um,
economics is actually a tool that they can use because they're very used to protesting.
Now,
I love a good protest.
I love a good protest,
but they're used to protesting.
They're used to letter writing.
They're used to call your senator.
Um They and me,
(10:49):
maybe,
maybe they're used to like a boycott of a particular uh company,
but they're not used to trying to get companies to change their policies overall and the economic power to do so.
So we have to do a lot of education to get them to understand um how they can use economic levers to change the behavior of publicly traded companies.
(11:12):
Um And how they can't because sometimes they're not,
they're not useful for every particular situation.
It I,
I imagine that there's probably rightly so as some deep seated mistrust against financial services,
right?
Because this is a sector that I think so many people,
(11:34):
whether you're not,
whether or not you're in the social justice space.
I mean,
even people we know in our lives feel victimized uh in some respects,
it feels sometimes exploitative and so,
absolutely,
what's the key to,
I guess building trust maybe with some of those people on the ground to say,
hey,
I know that you've had this experience or that you have this predisposition,
(11:57):
but we actually want to ally with you and we think this is a tool to actually create change from the inside.
Absolutely.
I mean,
I think that um it's such a nice,
nice segue into some of the other things we're gonna talk about because I think the tools for that are similar to other tools in business.
It's basic good,
thoughtful communication,
(12:18):
you know,
starting with acknowledging the harm that has been done,
even if um I and my firm didn't cause the harm,
we're still part of a harmful system.
So acknowledging the harm,
placing ourselves within the context of finance,
helping people understand where we are and being super transparent about our goals and then allowing people to,
(12:42):
you know,
opt in or not or to the level that they're comfortable with.
Um We definitely,
we never interested ever in forcing anyone.
Um But even beyond that,
if we come to an organization,
we have them understand what it is that we're doing and they decide for whatever reason that the work that we're doing is not for them as long as we've left them with more knowledge and a better opinion of us than they started with.
(13:09):
Like we count that as a win.
Absolutely.
This,
this feels like uh this progress is measured in steps,
not miles because you're,
you're really working to undo kind of a long period of experience here.
How is,
how has it been to try to coalesce over the period of time that you've had a Acena coalitions in support of,
(13:35):
of this change that you're describing?
It's been great,
it's been great and I think um we do a lot of our work most of our work in coalition because,
you know,
we're still,
we're still a new firm and we're,
we're,
we're small,
but we're mighty.
Um but we are very much all stronger together.
And so working with coalitions,
working with trusted partners,
(13:56):
not only enables us to move more money and power.
Um but also,
I truly believe that we get a more nuanced view and a better result um by hearing a lot of different voices and having lots of people who bring different,
slightly different perspectives on the same topic to the table.
(14:17):
You know,
it's interesting because there's always strength and diversity.
I think we,
we,
we agree on that.
Um But sometimes it's so hard when you're up against a monolithic system that definitely is oriented on very different things,
profit primarily than you are.
How do you,
how do you end up speaking with one voice or is it necessary even to speak with one voice when you do this work?
(14:42):
Is it just,
is it,
is,
are the numbers and the solidarity more important or is it the message?
Hm.
That's a really good question.
Um You know,
I think that part of the way that we,
I think it,
the solidarity is very important.
Um And there are certain things where the numbers uh are more important.
(15:05):
And so what we,
what we find is that with many,
many coalitions um is that they start out and they are very broad.
So there are coalitions that say things like we want fair wages.
That's great.
I want fair wages.
What does that mean?
And what does that mean to you?
(15:26):
And what does that mean to people in a different industry?
Um,
and what does that mean to people who live in different geographical places?
And so you can take that coalition once you decide,
um,
that you all want fair wages and you can sort of split into smaller pieces and not split in a negative divisive way,
(15:49):
but split in a thoughtful generative way.
And so you can have people who live in California,
for instance,
where the minimum wage is $15 an hour,
you can have people who are working um to take the legislation that we have in California here and export that to other states where the minimum wage uh follows the federal minimum wage of 725 an hour.
(16:11):
Um And you can have people in those states who are talking about how um the minimum wage hurts them and they don't need to be in,
they don't need to be in conflict with the people in um California,
they can just be working on different issues.
And so people can often,
especially in community organizing of any type.
(16:32):
Um They can let divisions become terrible pieces that,
that push things apart.
Um But that doesn't have to be the answer.
The answer can also be you can have people just working on slightly different things that all agree at the same general principle.
So,
going back to my original question,
I think I'm starting to infer maybe where you might be going with this is how you get the,
(16:57):
the corporations to pay attention numbers.
It's coalitions,
right?
Like,
that's what you're talking about.
How does that work?
Like,
in practice,
like,
let's say Walmart,
like,
you know,
if there's a topic that you need to go up against Walmart,
it's the largest retailer in the,
you know,
country,
if not world,
right?
So,
yeah,
next to Amazon.
But you know,
(17:17):
how do you get a seat at that table to begin with?
Absolutely.
So I wanna call out one of our really big movement partners who's also just a fabulous group of people,
um,
who is the interfaith center for corporate responsibility.
Go check out IC cr the interface center for corporate responsibility is amazing.
(17:39):
Um They are a coalition of faith groups of all different kinds of,
uh,
people of all different kinds of faith.
Um,
who are exactly as it says in the name.
They work on overall corporate responsibility and we are members,
even though we are a corporation,
(17:59):
we are not a faith group.
Um,
we are members and we do a lot of work with them.
Um,
and organizations like them,
um,
do a really good job,
um,
us CIA sustainable investment for,
you know,
sustainable investment for is another type of that type of organization.
Um And then we form some of our own coalitions here at Adana.
(18:20):
Um,
they do a really good job of,
sort of being a container for those issues and then the members of those organizations can kind of look at all of the emergent issues and decide which coalitions they want to be part of.
Ok.
So it's like,
it's sort of showing up in as,
(18:40):
as,
as one,
but it's like an army of many.
Right.
Exactly.
Exactly.
And that's,
that's how we make change.
Right?
It's absolutely.
So help us understand like what are some of the areas that ada is specifically focused on?
It feels like you don't have to look very far to just see this myriad of issues confronting our world and our society and our planet.
(19:05):
Um How do you get focused and choose the ones that you want to take on?
Absolutely.
So we,
you know,
we organize,
our kind of organizing principle is around our um four inter we call them interlocking levers of change.
So our four are sort of four categories of things that we push um corporations on and they are um economic climate,
(19:28):
uh gender and racial justice.
Those are kind of our four buckets and of course,
we,
we love things and issues um like serial sex harassment that cover multiple of those,
right?
Which does a very good job of covering an economic bucket and a gender bucket,
um minimum wage and something called a sub minimum wage.
(19:50):
Uh,
which for all your listeners is $2.13 an hour.
If you receive tip.
If you are a quote unquote tipped worker,
the federal minimum wage is $2.13 an hour.
Legal.
Oh,
it's absolutely shocking.
It's really slave labor.
Uh,
well,
that actually happens when you're in prison.
(20:12):
I can tell you about that too.
I get really upset about it.
Um,
but,
uh,
sub minimum and minimum wages are things that,
um,
cross so many of our focus areas.
They cross a gender focus area,
they cross a economic focus area,
a racial justice focus area and potentially a climate justice area as well,
(20:36):
which people wouldn't necessarily think.
Um,
but being climate aware can be very,
very expensive.
Oh,
yeah.
One of,
one of the premises that I have of this podcast is,
uh,
trying to help smaller businesses understand that social responsibility is not confined to mega corporations that are well resourced to do the work because my,
(20:59):
my worldview on business and I think where business is going in general is that our consumers,
our markets,
our,
our communities are so hungry for responsible business.
And that means all of us and those of us that want to lean into figuring out how to be a better contributor to our communities.
(21:19):
However,
that looks like it doesn't mean that we're filling out,
you know,
ESG surveys and,
and doing these huge deep dives on our carbon footprint.
Although that's great if you can do it.
Uh,
sometimes that might just mean,
showing up in your community and doing the good thing because that's what your community needs,
right?
100%.
And,
and I think,
(21:40):
um,
you mentioned a little bit earlier that,
you know,
you and I agree that diversity is,
is always better and I feel like there's a,
a side sort of corollary to that around social responsibility,
which is that,
you know,
every step that you take um towards climate justice,
towards racial justice um is the right step and it doesn't matter if it's a step of a centimeter or a step of 10,000 miles,
(22:08):
you're going in the right direction.
Um And,
and that's something that I deeply and truly believe.
And there's so many small tweaks that I have learned from my years in business and that I've put into practice in the structures and policies that Acena that move us closer as a firm um to a place of,
(22:31):
of justice and we're not there and it's really hard to be there in finance,
but every step we take moves us closer.
Yeah,
I,
I know from talking to you and,
and that representation is really important and,
and it's important,
it's important in terms of what you're,
(22:51):
you're trying to do.
You're,
you're trying to get people that are underrepresented and their voices heard in the financial markets as part of your,
your overall goal and objective but representation is also really important internally with an atta um tell us about that.
Absolutely.
So I think uh representation is important for me for a lot of reasons.
(23:13):
And I think it comes from,
it comes from many places,
but it also comes from,
as I said earlier,
spending my whole career in finance,
finance is a very,
very white and a very male um industry.
And it's also one that's dominated by people who have a certain level of attained education.
So everyone looks kind of the same and has the same background and comes from the same uh part of this,
(23:41):
the same place.
Um And so one of the things that I see in finance and this is very topical because I feel like Sam Bank and Fried was just,
you know,
indicted for theoretically almost 100 and 30 years.
Um Those people keep creating the same types of systems and we know what those types of systems get us late stage capitalism that is incredibly extractive and is destroying our planet.
(24:10):
I would,
I like to try something else.
I don't have a guarantee that it will work.
But I'm pretty sure if I put different inputs into the system,
I'll get a different output and the output I'm getting right now is not good.
So I'm willing to try something else,
you know,
so,
you know,
atta like you and,
and your co founder,
(24:31):
you know,
atta seen it is a,
is led by BPO woman of color LGBT Q plus,
identifying individuals.
Uh And you've got incredible representation in terms of like who's on your team and that's all intentional.
That's my design,
right?
It is absolutely because we're trying to create,
(24:54):
you know,
within the structure of finance.
I still,
you know,
I have a asset management firm,
but I'm trying to create um something else and I'm trying to create a system within finance that can move us to a slightly better place.
(25:17):
I mean,
I,
you know,
I,
I'm like,
I'm a gay man that has worked in,
in finance for a long,
long time myself and I mean,
it is not an easy place for the LGBT Q community.
Um I mean,
even like recently,
I mean,
within the last like seven years,
(25:38):
I can remember um so many people around me were unable to kind of show up and like be themselves at work for organizations that get,
get like,
you know,
100 on the HR C equality index.
And I'm like,
oh,
my lived experience is so fundamentally different,
(25:59):
so different.
Um What's it been like,
you know,
even with your peers that are not in the social impact space,
what's it like to,
to like,
try to raise money and then deploy that money in a system that almost by design is gonna look at you as like,
well,
who are you or you're not a player?
Why should I be interacting with you?
That's what does that look like?
(26:21):
It's very difficult and it,
it's,
it's uh it's interesting that you frame it that way because um one of the things that we do as um asset managers is when we create products and we want to sell those products to large uh clients.
We go through something called a due diligence process.
(26:41):
And within a,
a due diligence process,
we get given a questionnaire and we get given,
you know,
reports that we have to fill out and we fill those reports out and they give us kind of a grade about our,
whether we can be sold to them or not.
And my business partner Rachel said something so interesting when we first started filling out those questionnaires and she said that um deviation in finance is seen as an error,
(27:09):
it's seen as a problem and I have a firm full of deviation.
And so I am almost automatically the work that I do.
And the way that I do it is not seen as new and fun and exciting.
Um It's seen as a problem.
It's a deviation from the norm.
It's so funny you say that.
(27:30):
So,
you know,
long time risk management manager over here,
it's like the standard deviation,
that is your measure of risk.
So the bigger the deviation,
the greater your risk,
right?
And so it's always like reversion to the mean because you can manage the mean,
you can't,
well,
you can manage the deviation,
but it gets more complicated and there's more brain damage.
(27:50):
Right.
Exactly.
Yeah.
It's funny,
isn't it?
And,
you know,
there's a foundation that was put out by the Knight Foundation,
a foundation study from the Knight Foundation came out in 2021 I believe.
And it looked at asset managers,
which is the firm that I own.
I'm an asset manager.
I'm institutional asset manager and,
um,
women and minorities together make up less than 1.4% of uh owners of asset management firms.
(28:21):
And so that means that over 98% of the owners of asset management firms are cis white men.
There are literally more men named Bob or Robert that own asset management firms.
And then there are women.
And so I actually asked the author of the study,
(28:41):
um why he put women and minorities together?
Because I'm like,
oh,
there's a,
you know,
like a sis Asian American man.
How,
how is that the same as,
you know,
a woman?
Um And uh he said,
so they would show on the graph.
Wow,
that's amazing.
Um So I am being my firm being owned by two women,
(29:02):
one of whom is black um identifying as queer,
we are just like in a teeny little minority.
And again,
what's interesting about that is those 98% of,
of men,
white cis men who own these asset management firms.
Quite a few of them are delightful people.
They're really lovely.
(29:23):
Individuals,
but they're within an incredibly toxic system and they keep putting the same inputs into that incredibly toxic system and are surprised when they get the same outputs.
Yeah,
that's the definition of insanity.
Right.
Doing the same output.
Right.
Exactly.
And I think that people who purchase products and people who understand that are starting to look for different types of managers,
(29:49):
different types of investment products.
Um,
and they're not finding them.
So there's this disconnect between what purchasers want um and what the system is giving them and that's,
that's where I live.
Yeah,
that's a,
that's an amazing opportunity.
Let's talk a little bit about this because I,
I wanna make sure people understand when you talk about,
you know,
asset management,
(30:09):
you're,
you're talking about fundamentally,
you know,
taking investment dollars from individuals and deploying them into the stocks of companies that meet your screens for economic climate,
gender and racial justice.
Yeah.
So when I,
(30:29):
when I go to a dinner party and I say I'm an institutional asset manager and people just stare at me what I say to them,
I'll give you like the 32nd thing where I'm like,
I'm like,
ok,
you person sitting across from me,
you have like a 401k or maybe a 403 B something like that.
And they're like,
yeah,
and I say,
ok,
within that you're invested in like funds like an exchange trade fund or a mutual fund.
(30:51):
And they're like,
Yeah,
maybe.
Um,
and I'm like,
great.
I make this and that's as far as we go.
So,
listeners,
I make those.
I,
I am so with you at,
at 20 plus years of being like,
I'm a banker and having the person on the other side of the table's eyes glaze over or if they do look interested,
(31:14):
they thought I said I'm a baker because they would much rather eat cupcakes for me.
Oh my God,
you about money management,
right?
I mean,
honestly I would rather sometimes eat cupcakes than hear about money management.
I'm an ex banker.
So,
hey,
you know,
I feel the same way.
Um So,
you know,
this is pretty hard nosed stuff when people give asset managers their money.
(31:38):
Yes,
they want to do good,
but they also want to get a return from that,
right?
Conventional wisdom would have,
you would have you think that all of these screens that you put um miss the fundamental point which is you're supposed to be maximizing shareholder value or the investors value.
(31:59):
Um I'm curious,
what would you say to that?
Conventional wisdom?
Yeah,
I would say two things.
Um The first thing I would say is that um I can show statistically because boy do,
I like math.
Um I can show that uh that is not always true is that,
you know,
in,
in funds like mine and in my section of the of the investing world,
(32:23):
there are plenty of investment managers who receive market like returns and I'm amongst them.
Um and those returns come from something that we're going to talk about,
which is diversification,
which is the concept that if you are invested in enough companies,
um you as those companies rise,
you will do just fine and it,
(32:45):
it holds out to be true.
Um There are some definitely like very targeted investments that hold maybe 10 or 20 companies um that don't do as well.
Um But if you're anywhere over,
you know,
100 companies,
you're probably just gonna do fine.
Um The other thing that I would say to that is that people generally um wouldn't walk into a cafe.
(33:10):
And if they walk into a cafe and they see that everyone in the cafe is uh let's say a white woman as I am and they walk into the cafe and they're a black man,
they probably wouldn't say um this is the best cafe ever.
They would probably be like,
this is not a diversified cafe and I don't belong here.
(33:32):
And so uh they would probably want to walk into a cafe that had a couple of cis white women having coffee and a couple of um Indian American women with their families having croissants,
like they wanted to walk into a cafe that feels welcoming and kind and thoughtful to them.
And so I don't really know why someone looks at investments and says we want exactly this one thing made by this one set of people because that's the best because if you ever had that experience in your real life,
(34:06):
you would be,
like,
terrified and feel like you're in a horror movie.
Yeah.
No.
Exactly.
Well,
you know,
and more generally speaking,
like if you're investing in companies that are meeting your screenings,
uh,
I would imagine,
um,
that,
you know,
so many studies have shown that socially responsible businesses outperform their peers because they do actually tap into the diversity of their employees.
(34:33):
They try to be inclusive,
they try to lead with values that actually attract,
um,
really loyal customers and have an impact on communities.
Do you agree with all that?
Absolutely.
And,
you know,
it's also,
it doesn't have to be,
people talk about,
well,
you know,
socially responsible companies,
diversity and,
(34:54):
and I like to bring it down to,
you know,
what is that?
And so I,
I'll give you an example in our products we screen out,
uh,
weapons manufacturers.
Ok.
And,
um,
I have family members,
well,
my cousins,
he's a big hunter and,
you know,
it's not that I am per se personally horribly anti Gunn.
(35:18):
He's,
he's a great gun owner.
He's very responsible.
I've eaten many things that he has hunted because that's the rule in my family.
If you kill it,
gotta eat it.
Um,
but we have all the weapons that we need on the planet.
We have more than all the weapons we need and we don't need more weapons.
(35:39):
Um,
someday in the future,
it is theoretically possible we might need more weapons,
but we do not need them right now and weapons are horrible ways to kill people.
We are just overrun with weapons and so we screen out all the weapons manufacturers and that has meant that with the war in Ukraine.
(35:59):
And unfortunately,
the situation that's happening right now in the Middle East that those companies have done very,
very well and our portfolio has not done as well well,
because it doesn't contain those companies and I can sleep well at night knowing that my money that I invest in my own company and my own fund is not going to create more weapons that I believe the world does not need.
(36:24):
Well,
you're,
you're touching on,
on this idea like I always think about returns outside of just a financial return,
right?
People that are gonna be drawn to out of scene and people that want to essentially vote with their wallet because that's really what we're talking about here.
People want to align their dollars and their investments with their values,
(36:47):
right?
That right there creates a return that we're not measuring absolutely.
And you know,
it's,
it's uh one of the,
the ways that we describe that return um is we think kind of about a spectrum and we call it,
this is not the most um fancy terminology,
(37:08):
but we call it the crime to philanthropy spectrum.
OK.
So think about it as uh you think about philanthropy on one side,
philanthropy has a zero financial return.
You are literally giving money away negative 100% financial return.
Um but it has 100% social return.
You feel amazing.
(37:28):
And so does the person who received that philanthropy on the other side of that spectrum,
you have crime.
Crime is like the best financial return ever.
You're taking something that you didn't have.
You have 100% financial return.
People who say crime doesn't pay are lying like it's amazing.
Um but it has a zero negative um social return,
(37:53):
right?
You're doing a horrible,
horrible thing.
And so that's pretty easy to understand,
but that can actually be applied to the to the economic market as well.
You have companies um that are stealing,
right?
If you're a company like I'm gonna pick on Exxon,
right?
They're stealing clean air and water from uh the present and the future.
(38:18):
And so there are there,
in my opinion,
they're committing crime.
Um and I don't want to be invested in that type of company no matter what it does,
I don't want to be invested in rilo no matter how great their returns are because they're participating in the killing of human beings.
And I don't be,
I don't want that type of financial return because I don't want that type of social return.
(38:39):
Um I also don't want to be going back to your comment about conventional wisdom,
I don't want to be invested in companies that don't make money because they're prioritizing their social impact over their market participation.
I believe that's a bad long term economic strategy and I am an asset manager so I care about the economics of things and so I want to find my sweet spot in the market with companies that are doing good and making money doing it.
(39:06):
Yeah.
You know,
that's,
that's always the struggle.
I,
I think how do you,
how do you find that balance uh between profit and purpose?
Right.
That's,
that's the journey I guess we're all on if we want to undertake the set of values,
right?
But the thing for me is,
(39:28):
and the message that that is so resonant in my life is that those two things are not mutually exclusive.
And I think a assume is an example of that.
I wanna be clear,
you're in this to make money.
Oh,
you wanna do good.
But you,
you're looking to turn a profit for yourself and that's OK.
I think it's great and I think I,
I don't know that I not only think it's good,
(39:48):
I think it's something to be celebrated because it shows that it is possible and achievable.
And I would actually be in a certain sense,
the more money that I make,
the harder I win.
I'm like,
I,
I can prove that uh investing this way with the set of people that I've hired and changing the financial system is a winning strategy.
(40:17):
And finance loves to win.
00,
yes.
00,
yes.
I,
you know,
it's funny this scene that's been going through my head and my own work,
uh,
working with people who really want to try to find a new way for their own business,
whether it's,
you know,
building a small business up and engaging with their communities as,
um,
they get really weighed down by the rules of business.
(40:40):
It feels really heavy and I'm the kind of a coach that comes in and it doesn't make me popular with some of my more traditional peers.
And I'm like,
what rule do you wanna break in your business?
Right.
Mhm.
So,
let me ask you what,
what rules are you breaking in at a scene that you're proud of?
Oh,
that's a great question.
Um,
I'm breaking the rules that you have to hire the same sort of people from the same sort of schools,
(41:06):
um,
to actually,
and have the same sort of knowledge and do things the same sort of way to actually win on Wall Street.
Um,
because I'm winning on Wall Street without those people doing different things.
I love that.
What would you,
what piece of advice would you give to a small business or medium size business that wants to break some rules but are terrified about doing it?
(41:30):
Oh,
that's a great question.
The advice I would give them is,
look,
look in those places where breaking the rules,
uh,
either doesn't cost you money or gives you economic benefit and overlaps with your values.
I love that.
Ah,
you can come join my team anytime Maya,
(41:50):
because we're like,
we are,
we,
you know,
we are affiliated Allied Spirit Animals in the sense.
Well,
on that,
uh,
on that,
thank you so much for your time.
This has been awesome.
Um Any place you wanna,
if,
if people want to learn more about atta or where should they go?
(42:11):
They can go to our website which is www dot Aina ad A SI N a.com.
They can also email us at info info at Adaa ad A SI N a.com.
Awesome.
Thanks Maya,
I really appreciate your time today and you really lit up this whole area of social impact investing for us so much.
(42:35):
Appreciate it.
Thanks for having me.
You can find Michael Messer at discerning strategies.com.
Set up a free 20 minute consultation,
clarify your goals,
scale your business,
amplify your impact,
discerning strategies.com.
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