While others may run from a problem, innovators approach it like what it is: an opportunity. Some problems may be so big and systemic that one innovator can’t fix them alone. These problems need an entire ecosystem built to address them
Tackling political, economic and social inequality between the sexes is one such problem. The fuel for change is money. I’ve been watching that ecosystem build for years. It started as seeds that were spread far and wide. The soil wasn’t fertile. Yet, despite the odds, some took root. Now those seeds have reached critical mass — the point at which significant and unstoppable change can take place.
Women, and some men and institutions, are working together to solve gender inequality in the funding of women entrepreneurs, which makes them all feminists in my book. I attended a conference, Ideas to Actions: Accelerating Gender Lens Investing, hosted by the Wharton Social Impact Initiative and Tara Health Foundation. Many of the leaders in the field attended. One of them, Suzanne Biegel, played the role of chief catalyst at the conference.
Biegel organized the conference to showcase what is happening in the field, brainstorm ways to grow the movement further and ways to empower more collaborations. “My mission is to move more capital, more strategically, with more velocity, with a gender lens” she said.
Money is a powerful tool for eliminating inequity, according to Joy Anderson, founder and president of Criterion Institute. Individuals can use their portfolios — philanthropic and investment — to make an impact.
The Center for High Impact Philanthropy (CHIP), a collaboration between the School of Social Policy & Practice and alumni of the Wharton School, developed A Comprehensive Framework for Improving the Lives of Women & Girls around five dimensions: health, education, economic empowerment, personal safety and legal rights. Donors can use this framework to understand how they can influence the outcomes they seek to achieve.
A cross between philanthropy and angel investing is SheEO. Neither philanthropic or investment but worth mentioning are Kiva and Capital Sisters International. Funders provide money to women entrepreneurs and get their money back but without earning interest.
People and institutions can use their investment portfolios not just to make a return on their investment but for social impact. While women are currently twice as likely as men to own impact investments (18% compared to 10% respectively), more than half of both men and women have an interest in social impact, according to 2017 U.S. Trust Insights on Wealth and Worth. Among these social impact investments are opportunities to invest, using a gender lens, in public stocks and fixed income securities, such as bonds, and private equity and debt that align with your values and fit every portfolio size.
According to Can Investing in Public Equities Improve the Lives of Women?, a report by Wharton Social Impact Initiative, the answer is “yes.” Want to invest in women-friendly companies? There are many more than when I wrote about Pax Ellevate Global Women's Index Fund.
CNote and the Calvert Foundation’s WIN-WIN are two ways to get a fixed rate of return by investing in Community Development Financial Institutions. CDFIs provide loans and technical assistance to minority- and women-owned businesses. Want to invest outside the U.S.? Check out Women’s Livelihood Bond.
Depending on the size of your portfolio and your risk tolerance, you may want to become an angel investor. More women are doing so every day. Women invest differently than men, according to The American Angel, a report by the Angel Capital Association. They are more likely to invest in female founders.
While the number of women angels has increased significantly, the number of women hired by venture capitalists to make investment decisions has not. And it is not for lack of trying or qualifications. As a result, women are striking out on their own to start their own venture funds. While still few in number, that number is dramatically increasing. Those private equity funds that have a gender-lens investment approach include Brava Investments (a Berkshire Hathaway-like holding company), Portfolia, Next Wave, True Wealth Ventures. Project Sage has a comprehensive list.
Even when women strike out on their own, they have a harder time raising capital from institutions, which results in smaller funds that take longer to raise. Many women-owned funds are finding that women have an increasing interest in becoming limited partners in private equity funds.
The catch-22 for women-owned private equity funds is that they need to be big (at least $100 million) to attract institutional money, such as pension funds, but they aren’t big because they don’t have institutional money. Foundations and nonprofits can use a portion of their endowments to invest in women-owned private equity funds that are aligned with their missions. Cambridge Associates debunked the traditional view that the top 10 VCs generate 90% of the industry’s performance. So there is no reason why institutions should shy away from newer, women-led, VC funds. There also is a need to have fund of funds, a multi-manager investment that invests in other funds.
So, the ground is growing more fertile for the seeds of gender-equity in funding.
And did you know the new math of Womenomics,
Proves we are a force multiplier,
That we are more > than… enough,
…and that just being ‘us’ is our super power?
—"The Vocabulary of Female, the Math of Femininity,” Luisamaria Ruiz Carlile, wealth manager Veris and poet
How will you nurture them to full bloom? How will you be a force multiplier?
