• Practitioners Institute: Diversity, Equity, and Inclusion

Each year, Confluence opens the Annual Practitioners Gathering with a three-hour strategic focus on an emerging topic in the investment industry. Previous discussions helped to launch the now $8 trillion fossil fuel divestment movement and, separately, efforts to create place-based impact investing strategies. This year we focus on Diversity, Equity, and Inclusion (DEI).

“What If We Had Racial Equity?” Keynote remarks by Angela Glover Blackwell, Attorney; Founder in Residence, PolicyLink; and author of Uncommon Ground: Race and America’s Future

Dana Lanza, the Confluence CEO, led the opening. “Our economy cannot be successful if we’re leaving anyone behind,” she said. “So how can we change the economic system to be inclusive of everyone?” She was followed by Diana Trump, Trustee at the Penney Family Fund, and a Confluence board member, who introduced Angela Glover Blackwell, PolicyLink founder and the day’s keynote speaker.

“I really wasn’t interested in anything until I became obsessed with creating a society in which all could reach their full potential,” Blackwell confided. That obsession has defined her career, and she says it’s more relevant now than ever. The majority of babies born since 2012 are children of color, she said. “We are becoming a people of color-majority nation,” and our success as a society, she argues, depends on the success of groups that have been systematically left behind. “The fate of the nation depends on getting the equity agenda right.”

Blackwell suggested that “toxic inequality” is the biggest threat to achieving equity. It’s “not just inequality—it’s the hollowing-out of the middle class, the baking in of inequality, that should have us all worried.” Not only is capitalism not working for those systematically left behind, she said, it’s not working for a lot of people, including the white middle and working classes.

The lack of equity, she says, is also harming the economy. Data show that people of color demonstrate entrepreneurial spirit—they are three times more likely to start a business than whites—but they are hampered by a lack of access to opportunities and loans. The data say that if we got equity right just in employment, the U.S.’s GDP would have been $2.4 trillion higher in 2014.

Blackwell sees value in unpacking the terms diversity, equity, and inclusion. “Diversity is just one of the many steps along the way… and inclusion is vital, meaning that people have voice, agency, and influence.” The focus must, however, be on equity—which, Glover argues, is “no longer just a moral imperative alone, but an economic one,” requiring more than just tinkering, but systemic change.

Remarkably, she offered uncoordinated advice, also later expressed by Anand Giridharadas in Thursday’s plenary discussion: “Raise the hard truths everywhere you can—in boardrooms and beyond. Be the skunk that came to the garden party.”

Blackwell admonished her audience to remember that:

• This work is for all people; “People who are NOT of color are absolutely as capable as people of color in building a truly equitable society,” but …

• People who bring authentic, lived experiences must always be at the table;

• Though good work, impact investing, and program-related investing are for the most part a drop in the bucket. To create the seismic shift required to achieve true equity, they are, sadly, still too marginal and too boutique. They do not fundamentally change the economy, nor do they leverage the resources and influence of the business community to change policies.  That is what will change systems of inequity.

Notably, in response to audience engagement, she offered that shifting corporate behavior may require a new movement for racial equity and divestment.

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“How to Interrupt Bias”: a flash-talk with Joan C. Williams, Distinguished Professor of Law at the University of California, Hastings College of Law, and Author of White Working Class: Overcoming Class Cluelessness in America

Legal scholar and author Joan Williams, who has made her career investigating bias and social inequality and crafting tools to combat it, followed Angela Glover Blackwell’s address. She shared a swift, information-rich “flash talk” about her research.

Williams said that during the 20 years following 1975, women flooded into high-stakes, high-status jobs. But since 1995, the numbers have flat-lined, and that same stall has affected people of color in the workplace. The problem, Williams said, is not with women and people of color, but with business systems.

“Bias is constantly transmitted in everyday work interactions,” she said, and it works in insidious ways. The problem is so systemic that one-time bias trainings “won’t change a culture.” Instead, she and her staff have spent the last 15 years looking at how bias plays out in the workplace and developing evidence-based training tools to “interrupt” it.

Metrics are key to this work. “You have to gather the data to be able to make  changes,” she says. And the numbers, when you see them, can be shocking. Williams said 66% of women working in tech, for instance, had been faulted for personality problems, as compared to just 1% of men.

The good news is that Williams has developed tools for individuals and organizations to combat this. The key, says Williams, is to move deliberately: collect data, share it with leadership, and then slowly ratchet up your advocacy efforts. The challenge, Williams said, is to shift ingrained habits and work patterns through data-driven decision-making, monitoring, and staff training.

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“More Than Numbers:” A discussion led by Fatima Angeles, VP of Programs at California Wellness Foundation, with Edward Dugger III, President of Reinventure Capital; Sonia Kowal, President of Zevin Asset Management; and Erika Davies, Racial Equity Consultant with Confluence

A question of access

Erika Davies, a research consultant with Confluence, opened the discussion by presenting her research findings on the scale of the diversity, equity, and inclusion problem in the investment sector.

Asset management is an extremely relationship-based industry that remains an overwhelmingly white field. This affects access and the construction of professional networks, thereby reinforcing implicit bias about the performance of white males as compared to women and people of color. The numbers are shocking: Just “1.1% of assets are managed by women and/or people of color,” said Davies.

That lack of diversity is impacting the economy. Sonia Kowal, President of Zevin Asset Management, suggested that without a diverse employee base, tech companies, for example, are going to implode by not developing the right products and services and losing the war on talent. There are ways to push for improving diversity, including tying executive compensation to a company’s DEI metrics. “Incentives work,” she said.

It’s also a question of opportunity, said panelist Ed Dugger, President of Reinventure Capital. Dugger suggests people in positions of power need to be more aggressive. “Opportunity is shared privilege,” said Dugger, “shared by those deemed worthy. Lack of opportunity is lack of shared privilege, justified by deeming a group of people as unworthy.” The question is, how much privilege is a person willing to share?

Dugger also said investors must challenge three conventional “truths:”

“Building Equity Solutions:” A discussion led by Jeff Rosen, CFO of the Solidago Foundation, with Luz Vega-Marquis, CEO of Marguerite Casey Foundation, and Jocelyn Sargent, Executive Director of the Hyams Foundation.

Rosen asked his panelists how impact investing may address issues around racial and social justice. Both panelists had some hard words for the philanthropy sector.

“The poverty rate is not decreasing fast enough for me,” said Vega-Marquis. “There is little sense of urgency and responsibility—we all sat around and let inequality happen.” Fifty percent of workforce in California works at near-poverty or poverty wages. “That’s just not acceptable,” she said. “I’m tired of incremental change. We need to figure out how we light a fire under all of us. It’s too little and too late.”

Jocelyn Sargent of Hyams Foundation agreed. “Active systems have allowed us to accumulate this wealth. Our hands are just as dirty as any great accumulator of wealth.” She questioned philanthropy’s tendency to avoid building and sharing power. “Philanthropy hasn’t wanted to talk about power. Let’s not talk about power. Let’s think about good.” She used the example of how philanthropy just uses 5% of their vast endowments each year. It’s strange, she said, to be the head of a philanthropic institution and not use all its endowment resources, vast networks, and influence to build power and make change.

Vega-Marquis said the discomfort with action comes from the top—and that’s where things need to change. She said philanthropies need to embrace change agents. Right now, when people of color come in wanting to make change, “we’re afraid of them,” she said. “Some of them are moving way too quickly for philanthropy. We invite people to dinner but we don’t let them eat.”

Both panelists did, however, see some ways forward, in response to the moderator’s question of overcoming obstacles of risk and doubt within philanthropy.  For Vega-Marquis, despite feeling a great cultural void in early years in the field, “In order to survive, I had to figure out a way to connect with people,” which she tied to the vital issues of holding people accountable and conveying her tremendous sense of urgency. For Sargent, the key seems to lie in a profound shift in definitions and values: “We have to believe that prosperity can come from ‘just’ relationships … it can come from equity.… I don’t know if we can re-tool our tools. We have to know that values of justice and equity are values that coincide with prosperity.”

Dana Lanza closed the powerful morning session by noting the significance of the 9^th Annual Practitioners Gathering: Truth and Transparency, in the context of recent phenomena such as the #MeToo and Black Lives Matter social movements, as well as attacks on federal and state social policies. “The personal experience, wisdom, and truth-telling we shared this morning help us to fully understand why we aspire to invest with values—and helps us do it in a truly transformative way.”