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“Impact Investing for Social Change” SwatTalk

with Morgan Simon ’04, founding partner of Candide Group

Recorded on Monday, May 24, 2021



Sampriti Ganguli Good evening everyone, and welcome to tonight's "SwatTalk." My name is Sampriti Ganguli, I'm the class of 1995 and a proud member of Swarthmore's Alumni Council. It is my great pleasure to serve as your moderator for tonight's "SwatTalk" and be in conversation with Morgan Simon, our esteemed speaker for tonight. And in a moment, I will turn the floor over to Morgan to share her transformation journey from Swattie to a trailblazer in the impact investing community. But before doing so, I just wanted to quickly cover some context for today's talk. First, just as context and background, "SwatTalks" are an alumni council initiative to engage the broader Swarthmore community in free virtual seminars, featuring alumni excelling in their fields and sharing their knowledge and experience. I'd like to express my personal appreciation to the members of alumni council, Sean, Dina,  Bob, Mike, and others who have over the years helped us to really launch "SwatTalks." Secondly, I'd like to express my appreciation of course, to the college that makes this happen for us and in particular to Lisa Schaefer, who is both in front of the scenes and behind the scenes in helping us with execution. The second thing that I just wanted to share is I'll be moderating the conversation with Morgan today. And I have some prepared questions that she and I have discussed. Morgan has also graciously offered to answer some of your questions and the chat box will be live and available for any questions that you may have. So please feel free during the conversation to ask any questions that you may have, and we'll try to get to as many as we can before we close out just a few minutes before the end of this hour. Third, we'll plan to cover a broad range of topics from what impact investing is, and what it isn't, and how we might engage in it more broadly to learn about what it could be, and also to learn about institutional investors and future trends in this particular industry. We know that some of you may be interested at the intersection of divestment, particularly from fossil fuels, but potentially other areas. And we'll touch on those questions as well. So without further ado, let me introduce Morgan Simon, class of 2004, a proud economics and political science graduate. A woman after my own heart. Morgan has a very storied career that starts at a very early age. In fact, she launched the Responsible Endowments Coalition as a junior at Swarthmore. It informed university of where their money was being utilized, how it could be invested to cause a positive ripple throughout our society, and eventually it spread to a 100 college campuses across the country with over a hundred billion dollars in endowments. She also impacted New Mexico's evolution into a blue state by increasing native American and Hispanic voter registration by over 5,000 as part of a Bill Richardson led pack in 2004, Moving America Forward. She worked at the United Nations in Honduras on HIV prevention programs and under the auspices of the special court in Sierra Leone. Among other professional milestones, Morgan founded and served as CEO of Toniic, which unites 200 investors and four and a half billion dollars devoted to social environmental enterprises. Toniic arguably led the trend for global social angel investing and still is considered an industry leader. Since then, Morgan has co-founded and currently co-leads the Candide Group, an Oakland based RIA, a registered investment advisor, that helps families, foundations, athletes and influencers who want their money working for justice. Across her storied career she has influenced over $150 billion in investments. And although Morgan never went to graduate school, she did teach at Harvard and at Stanford and is currently an adjunct professor at Middlebury, fulfilling almost every Swattie's ambition of teaching at some point in their career. So Morgan, without further ado, let me turn it over to you and maybe ask you from the very sort of start, what took you from Swarthmore to where you are in your career today?

Morgan Simon Great to be here, and thank you for that introduction. And it's just exciting to be back in Swarthmore community I love, I feel like I'm in that amphitheater right with you. And what's interesting, I think, what took me from Swarthmore to where I am today, was really Swarthmore and the idea that you kind of were able to get those critical thinking skills, which I know it sounds like such a catchphrase but it was a real thing. And I think is really how I was able to become a finance professional without formal finance training, without getting an MBA but just I've really feeling comfortable diving in and learning, that, that learning how to learn piece was so critical to my career. And then the other piece has just been, I would say for people who care about social change, the idea of positionality, of where do we each sit in terms of our individual skill sets and access points and relationships, and what are we able to influence? And I think for me, even going back before Swarthmore, I grew up in Los Angeles and was very influenced by the large Latino community there and working with a lot of families. And seeing that so many of the social challenges families were facing, were really interconnected, that you couldn't solve housing if you didn't solve how challenging it was to be an undocumented worker. And that you weren't going to be able to address that without addressing education and food access and all these other pieces. And that, for me, at the end of the day, the uniting force behind all of that was the economy. And that if we didn't find a way to take on the economy really comprehensively, we weren't gonna make enough progress. And I think over time, I've kind of expanded that view that it's really, politics, the economy, culture and media as kind of four pillars of social change. And that's part of why my main work is as an investor with Candide Group we've done over 135 million and to 90 companies in funds all doing social change work. So whether that's utility scale solar for the Navajo Nation or a co-op of formerly incarcerated black women in Chicago doing healthy food provision for schools, we're able to do these for-profit investments that still have the social environmental context. But I also really try to put a lot of effort into the idea of changing the culture of money. That it's one thing to be able to invest the money that we do but if we're not addressing the 196 trillion that's circulating in the global economy every day, we're not going to win. And I think the final piece there, I talk a lot about, and I think as a Swarthmore activist I learned a lot about the idea of power mapping, of what are the ways that we are connected to power and what are the influences of power in terms of how certain terrible practices get cemented in the society and what's our connection to those. And it was really at Swarthmore that I started to kind of adopt this term of being an accidental billionaire. That all of us, and I can really say all of us, right, in terms of knowing this is mostly Swat grads who are on the phone, we're all connected to a billion dollars one way or another. That you are an alum of a massive institution, that you might be a teacher that's part of a pension fund, you might bank in a mainstream bank that has trillions of dollars. And the more that we're able to harness the collective power of that, the more that we can do. And I think that's where my career has really been about, how to make that process as approachable as possible and I think, it gives us the opportunity to really balance being lovers and fighters. But I think we often think of activists as being fighting against what's out there, but the loving side is that we get to invest in the changes that we wanna see, and that's something that just gives me a tremendous amount of joy.

Sampriti Ganguli So Morgan, I love that you talk about the critical thinking skills that you learned at Swarthmore. Was there a professor, a class, a paper that you feel like was your sort of proverbial aha moment? Is there something that really sort of stirred you while you were here? I'm curious to know about that as well.

Morgan Simon Well, I'd love to see some applauds in the chats or anyone else who did the Ken Sharpe LatinAmerican politics seminar, or just got to experience Ken Sharpe's teaching in any shape or form. But that was the classic Swattie, seven to midnight, write a paper every week. And I really fought my butt off, I was a sophomore, and like remember this as I'm speaking that, he was like, "I never let sophomores into the class." I'm like, "Well, you're gonna let me in." (laughs) And I think I was going abroad the next year for the spring and I would've missed it. And basically I remember the first paper when I had an original thought, I know it sounds like a funny thing to say, but it made me realize that most of my papers had been summarizing what other people were talking about. And I think that one of the things in the context of the modern media environment of how hard it is sometimes to really form your own opinion. And it's great that we have access to so much information. But it really matters in the context of, as social change agents and as impact investors, and I will say that, anyone who has $5 in the bank, you can be an impact investor, right, like your money has an impact whether you like it or not. And the minute that we start to think about intentionality of impact, that means that we have to form an opinion about what is the world that we wanna live in, right. And either you're kinda letting the bank decide that for you or you start to decide that for yourself. So I think that that comes into a lot of questions whether it's about should one invest in fossil fuels or not? How do we think about things like private prisons, right? Like what's the type of world that we wanna live in and how are we gonna get there?

Sampriti Ganguli So building off of that, Morgan, tell us a little bit about the Responsible Endowments Coalition you started while you were at Swarthmore. What did you learn from that as a student and how have your views been maybe reinforced through that process and how may have they evolved over time?

Morgan Simon Sure, so the origin story of the Responsible Endowments Coalition, which started off as students from five different universities. We met at a conference and realized that, basically that there were more folks out there who wanted these tools of how to use the endowment for social change. And my introduction to it was actually freshman spring that I had been looking for and kind of already turned onto this question of how do you influence the economy? And had discovered the school's committee on socially responsible investing. And the kind of cheeky thing that I did was seeing that the school had been voting on shareholder resolutions, which is basically these elections that companies have every year for their corporate boards and saying should we change our practices, and how we treat our workers and the environment. Like it's a good opportunity for shareholders to get to say what they want a company to do. Shareholders have to put forward these proposals, and Swarthmore had never done one. And I was just like, well, why not? Let's give it a try. And to his credit, Paul Aslanian who was VP of finance at the time, and we still have a great friendship to this day, was incredibly supportive and said exactly, why not? And we filed a shareholder resolution at Lockheed Martin, and it was asking the company to start giving domestic partner benefits and put sexual orientation in a non-discrimination clause, which at the time was considered very revolutionary, right, 'cause this was quite some time back. And basically, we flew together to San Diego to speak to the company, and a couple months later, front page of Wall Street Journal that they were announcing that they were gonna start giving them as some partner benefits. And we wound up writing to other fortune 100 companies including FedEx saying, "Hey, we've noticed that you haven't done this either, and we want you to make this change." And they all wrote back surprisingly saying, yes. And that's when we really, at least for myself, realized like this stuff had power, that this didn't need to be something where you had to be wealthy to be able to make change, where you had to have some like particular experience but that you just had to know enough to be dangerous and that we could teach other people enough to be dangerous. So I think one of the ways that finance thrives in holding us all captive, it's kinda like, what's that movie, "Usual Suspects", right. Or like the first rule of Keyser Söze is that no one seems to know he exists, right, but he'd like hide behind this cloth. And I think there's often this feeling of like, finance is so mysterious we're never gonna be able to make change. And I think the more that, even us at that point, we were 19 year olds saying, "You know what, you don't get to hide this from us, we can figure this out. We're connected to this billion dollar endowment and we wanna make change with it." And there were over time, thousands of students across the country saying the exact same thing. Whether it was divesting from fossil fuels and moving money into more community investments and green investments. Whether it was addressing more shareholder proposals or investing in community banks, but just saying, this is something that's accessible and doable, I think we have the ability to do that at an institutional level and then to do that at a personal level. And I would say with the Responsible Endowments Coalition what I'm most proud of, and that organization had a 15 year run and just recently had what we called an intentional sunset and we shared a lot of the lessons learned from that, that basically we trained a lot of activists to know that money is a tool for justice, right. We're often used to money being a tool of harm or a tool of trauma, and that is true too, but are there ways that we can harness it to be a tool for justice that I think is the great lesson that we imparted to the student activists.

Sampriti Ganguli I love that construct of framing it in the positive around money as a tool for justice. And on that note, I think it goes without saying, but I'll say it anyway that climate change is potentially the most existentialist threat of our lifetime. I'm curious in your years of advising and working with institutional foundations or large endowments, what have you learned with regard to divestment? What works, what doesn't? And how can individuals who are very vested in these outcomes make the most positive change and affect the most positive outcomes?

Morgan Simon Sure, So I have two thoughts on that that are just gonna come from different perspectives. So I think there's a moral argument and there's a financial argument, and that I think people kinda get to choose which is the most compelling to them of where they wanna start from. So from a moral level, I'll quote Liesel Pritzker Simmons, who is a major impact investor and friends who is often said, "Divest from things that when you use properly kill people." It's just like a basic line of, maybe you don't wanna be invested in things that when they're used properly kill people. Now, I think that's often an argument around like guns and tobacco. And then whether you wanna extend that to the broader impact of the fossil fuel industry, right, I think that's where people can make their choices around where they drive that line. But I think it's an interesting line to draw and then sound morally of, what are the things that I actually can't sleep at night knowing that I'm invested in. Separate from the moral question from a financial perspective, one of the things that's interesting in the context of institutions, right, where their objective is to maintain for the long-term. They don't get their investment returns quarter by quarter, I mean, obviously they do take cash out and we know they're receiving returns but they're really interested in the long haul, and they generally are what we call universal owners, which means that they like own the whole economy. So that's where, if you're looking at the long-term impacts, if there isn't a world in 30 or 40 years because of climate change then you're gonna lose everything no matter what. And the externalities of one company, you're gonna get internalized somewhere else in the economy, which means that you really just can't afford financially to ignore something as big as climate change. And I think that's where you've seen, for instance, the leadership of insurers like traditional insurance companies like Swiss Re saying that they won't insure a company that doesn't have a climate change plan because that's clearly gonna be one of the biggest business risks that they're gonna face. There's also been studies like from Harvard Business School that they tracked the returns of companies over a 30 year period and the environment, and social, and governance practices and the companies that had thoughtful environment and social records had double the market cap. I mean, that's a massive difference, right. So I think there's so much evidence that companies that are looking for the long like the long haul, are just generally doing better. And then to give even like the most precise data point, I actually was talking to one of my clients today who is fossil fuel free in their entire portfolio, and they're up on the public equity side 40% over the last year. And the S and P in that time was up 43%, right, so you could look at that and say, "You gave up return, I don't know about that." But you could look at that and say, "Boy, 40% sounds really good and if it meant that I bought surviving climate change with that other 3%, I can feel great about that." So I think that's where we need to really balance, what are the different needs that we have and what we think about is our legacy. And I think about legacies both for individuals and for institutions. What are our values? What did we leave for others? And is it beyond just the financial wealth that we created but how we expressed our values in the world through our money, I think is really critical.

Sampriti Ganguli Thank you for sharing that. I'm curious, Morgan, knowing that you don't necessarily provide advice to individuals, how might you counsel individuals who want to be more educated about divestment or other strategies as they think about their own personal portfolios? And maybe particularly as they think about retirement, being closer to retirement versus those who might be earlier in their sort of career and in their kind of life and financial planning.

Morgan Simon Sure, so as a registered investment advisor I always get to start with I can provide education but I'm not providing any financial advice, and there's lots of great places that one can go in seeking a financial advisor who has expertise in impact investment. So I think about this from an asset class perspective, in terms of what's easiest and accessible. So first cash king or queen, that essentially if you're gonna have your money in a bank anyway, right, if you're not putting it under the mattress, I don't think we think of a bank as an investment but to some it is, essentially. It's where you're putting your money to have it be safe and potentially to have it grow. So the idea of looking for a community bank or credit union in your local community, the ability for an institution to do so is such a simple step. And then from there, there're so many, essentially alternatives to CDs that are out there. I would be remiss not to mention that we have within our Swarthmore community, Julie, who had written in the chat earlier, I think is online, Julie Eades, if I'm pronouncing that correctly, who was the leader in the New Hampshire community loan fund, right. Which is an amazing institution where people are able to support community development and be able to get a return on their money, right, there's so many of those across the country where people can be investing their money locally or nationally. Next step, then if you're looking at retirement funds, for folks when you go into your job, and for young alumni, you might be getting that form for the first time that you have to fill out of, how much money am I gonna put towards my retirement and what sort of funds and am I more risk-adverse am I keen on risk, et cetera, et cetera. Is there a social choice box, right. More and more often nowadays there should absolutely be a choice. I want my money to be socially managed and if there isn't contact the HR department to say, "Wait a minute, why don't you have a social option?" That, and there's so much research that millennials care so much more about the values of where they're working that that's a really easy change to make, right. So, and then from there, for those who may wind up in a position of having more substantive wealth, there's so many opportunities within private markets whether it's more socially oriented venture capital or real assets, but that's where people typically then we'll start working with an asset manager who has that sort of expertise. And the one other thing that I would know that happens a lot, both for individuals and for institutions is advisors who will say, "I don't know about that social thing, do you wanna lose all your money?" And that there's this adage in investment where people say, "No one gets fired for buying general electric." That if you just do things that are really boring and typical, then no one can get mad at you and you can keep your job. But to some degree, oftentimes if you have an advisor who you may have had for historic reasons, you wind up having to go and say, "Hey, do you wanna take this journey with me and learn more about impact investing or do I need to find another advisor?" Because those advisors are out there, and that's where there's so much opportunity for people to really own what they own, right. To take control of their money and not just sort of let financial advisors make those decisions.

Sampriti Ganguli Fantastic advice, I was remiss in not asking the more fundamental question. So if I could ask you, Morgan, how do you define impact investing? What is it? And maybe more importantly, what isn't it? And how would you define it in sort of the most basic lay terms?

Morgan Simon It's a great question. And I think one of the things that I talk a lot about is how the Merriam Webster definition of impact is to impinge upon especially forcefully. And that doesn't sound that good, right, like, are we the impinge upon people? But I think it goes back to the fact that, impact can be positive or negative depending on who's defining it. And something that we have to be really cautious of, knowing particularly my practice focuses on ultra high net worth individuals, and then foundations, and institutions, you don't just want the wealthy getting to decide what social impact is. So we're often looking at how do we structure accountability into our systems to make sure that we're not, potentially having negative impacts on people or not prioritizing the impact that we need to have. So I think the other thing that we have to be really careful and looking at is the level of brainwashing, that can be part of it. And, yeah, I think it's precisely actually what Annie is saying that, I fear that a lot of impact investings out there is basically good enough for those people of saying, let's make it slightly less miserable to be poor, right. Or let's make it 50 years instead of 30 that we all died of climate change. And I think that's where we need to be a lot more intentional in our practice. And that there's also a lot of issues in terms of making sure we don't replicate what's happened in Silicon Valley, which is that, less than 10% of all money goes to women or people of color. So at Candide Group our portfolio is over 50% women and people of color funded. We did over 20 million last year to black native American and Latin X led organizations, and I think the hope is that that will become more of the norm within impact investing of saying that, you absolutely can't divorce an anti-racist framework from impact investment.

Sampriti Ganguli One of the potential positives that have come out of this pandemic and the spotlight that it has shined on racial injustice is the spurring of investment potentially towards black and brown communities, as well as women. I'm curious if you see any other potential trends coming out of the pandemic with regard to impact investing? And to your fine points noted before what needs to change from a system level to make sure the pendulum doesn't swing back post pandemic and lose focus on those communities?

Morgan Simon I am intrigued that major financial institutions have been making large-scale commitments to doing more for communities of color. I would go back to, for those to actually be effective, means having to have direct relationship and accountability in that process. So I do feel like the jury is a bit out there but I think what we're starting to normalize more is the asking of questions. I really think for most of us, when you put your money in the bank, you might picture this kind of James Bond volts in the back that it's just sort of sitting there day and night and we forget the fact that it's being loaned out to other businesses in the economy, right. Or when you put your money in a mutual fund, like there are people on the other end of that that are impacted. And the more that we're able to make that visible, that I think is a trend that can stick if that makes sense. And I think the way that, that gets tied up to so many questions of social inequity in so many ways that attended to be absolutely correlated towards race in the U.S. and stats around incredible discrepancies in terms of assets, and income, and otherwise, right. That all kind of goes together.

Sampriti Ganguli So, Morgan, I'm gonna turn over in a moment to the wonderful questions. And I invite those of you on the call to continue to ask questions and I'll lift them up for Morgan. But before I do, before we close out, as you speak, I sense your passion and your energy, I also, as someone who has worked in the field of finance and investments, it is a male dominated field and has been for a very long time. It's also dominated by people who have MBAs, at least that has been my observation. And I'm curious along the sort of 20 years are there any lessons you've learned? Any war wounds you bring, or anything that you might be willing to share about what it's like to be a woman in this field and guidance that you might have for maybe some younger alumni in the call who are choosing a career in finance. And wondering whether it's somewhere where they can stay long-term as well.

Morgan Simon So I put out a book a couple of years ago called "Real Impact," and it mostly is essentially about this question of what is impact investing? And what is the opportunity for the world? And how can people do it and how can institutions do it? And what was interesting, there's a piece of a chapter that is about the lack of diversity within impact investing. And when I was going through all the stories that I had of ways that I had been treated like crap, I actually had to keep out the most, I guess, salacious ones, like the most horrible ones, because I almost felt like people would be like, "This is so extreme, I would never do that." And what I think about, nowadays we have the language of microaggressions, which I think we didn't have when I was starting out. I think, my lessons are honestly less for the women and more for male identified folks who are moving into finance of, what are some of the things that you might unwillingly do. 'Cause I think that's, ultimately, I wanted to make sure to include examples that were really relatable in terms of, "Oh, I could imagine making that mistake." So for instance, things like I learned I couldn't wear black in gatherings because people kept asking me to get them water or "Where could I sit?" And I was like the keynote, right. Or I'm sitting in the green room at CNN, and people saying, "Oh, do you know when Simon will be arriving?" Like I'm right here, (laughs). So I guess it's interesting I took a lot of advice, I guess, and sort of consoling from another Swarthmore lad Mark Hanis. That's also '04, he was the founder of the Genocide Intervention Network, and we had a similar experience with him, but he looks 12 years old to this day. And if he's on, he won't mind my saying that, but essentially that he also struggled even as a young male, right, as a young white male and trying to get respect and legitimacy. And at a certain point, people decide that they're gonna respect you or they don't, and you just keep moving. I think that's really what it comes down to. And if someone's actively gonna get in your way that's when you can take more action, but otherwise, it's absolutely about just keeping on your purpose because that's what you're there for. And getting to laugh at the ridiculousness of it all.

Sampriti Ganguli More power to you. Bob Gross, "No matter what you say or do to me I am still a worthwhile person," have taken me far and beyond and I've told myself that many a time. Let me lift up a couple of questions and I'll try to bucket these into some kind of logical frame. There's a couple of questions about different types of institutions beyond maybe just colleges and universities, so let me ask around development finance institutions and government entities. So there's a question that says, many impact investors are now looking at developing emerging economies, most of the development financial institutions, the DFIs have ESG mandates. What has the track record been in terms of social change and financial returns for these institutions?

Morgan Simon Sure, so I think Camilliere Sadie who asked that question would probably be even more qualified to answer it given his great work in Africa in building funds. And essentially, I do think it's really important to highlight that this is absolutely been a global phenomenon. My work has focused a little bit more domestically, we do some degree of international investing but I would say that in general, we're seeing that exact same trends. In terms of people being able to get great social environmental outcomes and financial return. I've been able to like track some of what's going on in the chat and is it okay if I lift up some that might be brought this up. I hadn't seen this guide line before, so it's fascinating to me, that Swarthmore's investment guideline would state, "The investment committee manages endowment to yield the best long term financial results rather than to pursue other social objectives." And I think what's really interesting about that statement, one is that that implies that those things are counter, that those things are supposed to be working in opposition in some way. And I think that's where we've seen so often, and even going back to that work we did around Lockheed Martin, part of our rationale was that, in the context of supporting LGBT rights at work, why would you tell 10% of their potential workforce that they are not welcome there? Like that's just a dumb financial decision. And I get that there are definitely a number of issues where you could say, "Well, it's not necessarily completely a financial issue but it is just something that's morally reprehensible." But I do find that those conversations tend to line up pretty similarly, I think you do see that with fossil fuels, you certainly see that with private prisons. So at any rate, I guess I would wonder, if a statement that was something more like, the purpose of the endowment is to ensure the longevity of the Swarthmore campus community and educational experience, and in order to do that, we need to have a world to live in and we will invest in a way that supports that long term outcome and longevity for all of us that would make a lot more sense to me and be more aligned with the Swarthmore values that I know. But I think I haven't honestly personally followed a ton of what's happened at the school in the last 20 years since I've been there and would love to learn more, but mostly I'm just really happy to hear that there's still a thriving movement of people who care because we are all connected to the outcomes of that billion plus dollars, right. And that, I think that the school knowing, for instance, that they've made really strong commitments on the environment side generally, why wouldn't the endowment be part of that? If that's essentially one of the largest ways that, I can't imagine an environmental footprint assessment that wouldn't include the climate impacts of the endowment.

Sampriti Ganguli Thank you for sharing that perspective. Let me ask a slightly different, maybe a slightly controversial question. And that's from Stacy, which is that, Charles Koch and presumably his brother, David, also believes that he uses his money and those of his collaborators as a tool for justice, what would you say to him in response if you had an opportunity to speak with him in private one-on-one?

Morgan Simon I think I would probably try to have it be a public conversation (laughs) verses private. I think this goes back to, who is getting to define justice? And to some degree, if he's saying that he wants justice for those who are currently not experiencing justice in the American society, then let them take control of the money and take control of the decisions. And this is not a totally pie in the sky thing. One of the families that we work with, a Pritzker family member out in California, started an organization called the Kataly Foundation which has over 400 million in assets that is very intentionally, essentially giving up a lot of the decision-making control to grassroots activists to get to decide what they think is most urgent. And that to her credit, Regan Pritzker and her husband Chris, have very much said, "We should not be the ones to make the decisions."So I think what I would try to talk to Charles Koch about is, who should be making that call and why are you getting to decide what justice looks like? Are you willing to give up that control if you're saying that you really do care about justice?

Sampriti Ganguli Thanks for sharing that. Let me lift up Amy's question. So Amy asked, I was recently elected treasurer of my state's medical society ran a campaign to explore socially conscious investing of our $850,000 investment portfolio. Some of the resistance I'm getting is from people saying, "That's too small to have an impact." How should I respond to that?

Morgan Simon So I think in general, it's that all of us collectively are the most welcome thing out there, right. And that to some degree of, we don't start acting like owners, wealthy people have no problem acting like that or wealthy institutions. So I think the most to which we say, "Well, yes, it's us and everybody else," and why should we give up that control that ultimately it is individual people's retirement funds that own the majority in the market. And one of the things, I've done a lot of activism in the last couple of years around the private prison industry, and one of the things that it was kinda incredulous to me the two largest owners are BlackRock and Vanguard. And people may know that BlackRock has made a lot of public statements around their environmental footprint and how they're looking at can corporations be more of a force for good? How do we address shareholder primacy? All these different pieces. And yet what they're able to say is, "Well, it's just the indexes. it's not that we're intentionally owning this stuff but if you're invested in a mutual fund and we run a lot of those mutual funds, then that means that your money is gonna wind up in something like that whether or not you actually made that choice." And I think that, that is really fascinating because it's all of us who have our money sitting in those pension funds. If you work somewhere like Google, I believe that they have a Vanguard pension fund. So I think it's an interesting question in saying, if all of us basically claim that we're too small then collectively we wind up being the majority owners of stuff that we're really opposed to and then being like, "Wait, how did we get here?" So I think the more that we tackle that. And then I think the other is using it to change the culture, right. So it's one thing to do something quietly it's another that if you're, in that context I don't know if that's a membership organization but certainly it sounds like there's a group of people around it, of is it something where that medical society, okay, so likely you're working with some doctors, that they are gonna have assets that they're investing, could you take that investment portfolio invest it for impact and make those investments public. So then people get to see, like what's an example of an aligned portfolio that might drive millions of dollars from your members into the impact. So I think that's where we all need to kind of do what we can. So I think that the final thing that I'll say, having been a lifelong activist I think for often expecting activism to be something where you gotta devote your entire life to it, and it's gonna be hard and miserable and whatnot, but often it's if we all just did the little thing, we could get the whole thing done, does that makes sense? And that it doesn't have to really take over your life, but that we can all contribute in the small piece that we do and in fact touch.

Sampriti Ganguli Absolutely, let me ask another difficult question, this one is from Bruce. Reparations for slavery and for native Americans, how can you allocate investments to redress that?

Morgan Simon Yes, so I think some of that I think can be in the context of turning over resources for people to be able to deploy themselves. So I think there's a big question around grants versus investments in that context of, if you're making a financial return at all, does that already mean that you're being extracted from a community? And if the point of reparations is the idea that we historically extracted from people for over 400 years, is that something that we wanna continue down the cycle doing? So what's interesting, I have clients who, for very legitimate reasons need to make money, right. That they are making sure that they can send their kids to college, that an institution, a grant making institution that needs to give away it's 5% a year, and in those circumstances we've been able to beat the Cambridge benchmarks and get very traditional rich cards. I have another client who has very explicitly said, "I'm happy to lose 20% of my money. I feel like at least that amount of it was ill-gotten and I don't deserve it and I'd like to divest myself from it, let me take on extra risk and really support communities in a much broader way." There are others who say, "If none of this came back, or if this started endowment that was under the management of others, that that would be a way to do it too." So I think one of the things that I think is important to potentially divorce is this question of, who gets the return of a financial investment? And that, that definitely has the potential to have extraction versus the simple idea of investing being a renewable resource. And this is else I talk a lot about in the book of like, how activists who sometimes don't really wanna touch money, can find that rather than having to go back for a donation every year. The idea that you can have revenue generating enterprises in an ethical way that then create the ability for a community to self regenerate, but just needs to replace some of those historically stolen resources to start becomes a really powerful tool. So I think that's where we get to be pretty creative in terms of how we're allocating capital, how we use grant capital to be able to move investments in. So I think it goes back to, there's so many different starting places it just kinda depends what's the piece of social change that you wanna impact and what are the resources that are at your disposal?

Sampriti Ganguli That's great, let me lift up Sean's question, if I may, which has to do with sort of recent policy changes. So President Biden recently put out an executive order, prompting a revision of ESG mandates from the securities exchange commission, given that industrial policy has now got some traction again in U.S. politics, what would you like to see for ESG? And what role do you think institutional investors can play in that shift?

Morgan Simon So I don't know enough about that specific executive order. We've been very focused on the executive order of banning the use of private prisons at the federal level but I know that there's more coming. There's more coming in the context of CRA reform, which is really important from an impact investment perspective, opportunities endowment reforms as well. And the way that those have sometimes been perverted for financial gain without community benefit. So I think there is this kinda broader trend coming out of the administration that I really appreciate which is to say, let's make sure we're looking comprehensively at the spaces where people are making money off of harm and to what degree should we as the government not be supporting that and what are the other spaces? So for instance, potentially reviving the impact ESPEC program at the SBA, to give some preferential access to capital for funds that are doing impactful work and that can have a massive outcome. Some of the USAID guarantee programs globally. So I think the big shift that we could potentially have and let's make it the next eight years, why not? It's just the idea of having government be more of a partner in terms of being able to prioritize these sorts of pieces. I mean, one of the things that, my like biggest policy fantasy currently is that, there's something called program related investments, which is an IRS designation of you're gonna do a social investment as a foundation or a charitable institution, you gotta go get a letter from a lawyer and certify that you did it for social purposes. I actually think it should be the opposite that if you are a mission-based institution that's getting a tax break, through your non-profit status, you actually should have to justify proactively if you're doing an investment against your mission, right. If you're an organization that says you support the environment, why shouldn't you be? And you get your tax deduction because of that why shouldn't you be allowed to invest in fossil fuels? So I think it's an interesting question of how do you leverage policy environments to make sure that impact investments are used properly?

Sampriti Ganguli So, Morgan, let me ask-

Morgan Simon I'm not keeping up on the questions y'all, I'm sorry.

Sampriti Ganguli No that's okay, I'm looking at those for you, your answers are spurring lots of great questions. What organizations help organize shareholder activists in participation and proxy voting? Keeping track of shareholders meeting for even a small portfolio is a lot of work, any guidance or counsel on that?

Morgan Simon So, yes, there's, I guess two places I would point people. So As You Sow is one and I can, oh, oh I think I've been putting chats in just to the panelists as opposed to everybody, and I apologize for that. As You Sow does a lot of great work in leading shareholder resolutions. Another one is ICCR, the Interfaith Center on Corporate Responsibility. And then the other is just knowing that, if you're invested through a socially responsible manager you can use proxy guidelines to make sure they're just automatically kinda voting down progressive guidelines. And you can always set those guidelines in a more custom way, depending on what you're interested in or if you see particular resolutions where you would wanna vote differently than the guideline. But that is something to be able to ask your financial manager about, or to simply, if you're in a mutual fund be able to ask what is the voting standard that you're using? And one of the things that's really critical, if you don't vote your proxies it's marked as a vote for management. You have to actually mark abstain to make sure that your vote is not counted. So at the very least, if you wanted to kinda just to have a do no harm principle, if you're not sure, if you don't have time to research the issue at least put abstain, right, so then you're not default cling to the management position.

Sampriti Ganguli Fantastic, let me ask Lori's question, which is a little bit related. How does an individual go about finding a financial advisor who has expertise in impact investing? They are out there, but how does one find them?

Morgan Simon They're out there and there is a network of them called First Affirmative, is that? I just wanna make sure that that's, yeah. I can drop this in here for educational purposes, which is that they are advisors across the country who focus on this. And it is important to kinda note, some will have very specific minimum, some like specialize in particular types of clientele so kinda interviewing a couple and seeing what's right for you. And then the other that you can always do, and what I personally went up doing was, I had a manager the kinda traditional institution and basically said, "I need to be a 100% impact or I'm gonna leave. And do you wanna learn about this stuff, and if so, great." And I didn't even like, obviously I could have provided some educational guidance, but I didn't, I basically, it was just like, "Hey, go sit with clients and come back and tell me." And actually wound up being really impressed. So I think one thing to just know about financial institutions is that you are the boss 'cause it's your money, right. So if you go and say, "Hey, here's what I need to be a happy client," their job is to do that. And sometimes you'll find people within institutions that they love having clients who ask, right, because then that gives them permission to push back on their bosses or whatnot, and just say, "Hey, clients are demanding this, we need to do more of this." So I think it's great to do both, whether pressuring a traditional or kindly asking a traditional advisor or moving to a more impact oriented one.

Sampriti Ganguli Wonderful, we've probably got time for two more questions knowing that we're gonna have to close out at the top of the hour. And as I wait for a couple of final ones, Morgan, I'm gonna switch gears a little bit. One of the things I was remiss in mentioning was your love of dance. And my understanding is there's some dance videos on your website. Tell us a little bit about your sort of passion for dance and how it is expressing itself for you today?

Morgan Simon So I guess with that, I'll go ahead and drop my social media handles. And it's a good warning that particularly my Instagram is a lot of dance. Let me adjust this. So I've been a dancer all my life and was very active at Swarthmore and beyond. And I think a couple of things, one is that I think, dance is just such a beautiful global community and it's such an amazing way to get to connect with so many different people and to build trust really quickly. And that that's something as an investor in getting to know different environments and communities I just find is such an important thing. So I often find that, being connected with artistic communities and the way that that kind of helps provide access to community knowledge is something that's been really powerful for me. And then I think the other is that, good social change work is creative, fundamentally. And the idea that you need to be comfortable with the notion of, let me start from stillness and create something completely different, I think is just a really strong value. And then the final piece is that, I've in recent years been focusing a little bit more on the media side, so I guess the other link I should drop, I'm a senior contributor to Forbes and in general kinda telling more stories in media about this intersection of money and social justice. And the other kind of fun fact is that my father was a rockstar. That he has played with Sha Na Na for 52 years now, if the younger alumni on the phone, we'll not know who they are (laughs) but they played at Woodstock, they had a TV show like '79, '83. And I think there's a piece that I really learned powerfully from my dad about entertainment and just the fundamental idea that people like to be entertained. And the extent to which that can be part of our social change work. If you can do work with joy, joy is attractive to people (laughs) You want them to be part of your party. So I think of that too as dance being something that's fundamentally joy making and try to bring that to my work.

Sampriti Ganguli Yeah, it's amazing because narrative change and expression is such a critical change of movement building and social change. At least from where I sit with philanthropic donors, it's also one of the most underfunded areas, so really appreciate you lifting this up more holistically 'cause it's such a critical dimension of social change. Let me ask maybe Lloyd's question just as a closeout for us. And the question is, there is an international movement to create a new currency to acquire the investment funds needed to meet UNSDGs on time. Current talk is to create a cryptocurrency for secure investments, is that a credible set of ideas?

Morgan Simon Is it credible? I think probably yes. Is it necessary? I don't know. And I think that what I would say, this came up earlier today, I was kinda judging pitches for the Stanford Graduate School of Business their impact investment class. And one of the funds wanted to take on the fact that less than 3% of venture capital goes to women and that therefore their fund was gonna invest in women. And I kinda questioned them on that will bring some money to women but what is actually happening that 97% of investment dollars are avoiding the women? So in that same way of, why is it that capital is not working towards the sustainable development goals or in general not working towards social purpose. And that, that to me is a question of will, more than anything. It's a question of culture. It's a question of tradition. And I guess, I think that crypto has done amazing work in changing the culture of money in some ways, it hasn't necessarily done that in a way that's been about changing it from a social impact perspective. So what I might ask in that question is more of the is that going to change the actual culture and purpose of money. Or if it's just doing kinda traditional finance work, but through a crypto frame then I don't think we're gonna get there.

Sampriti Ganguli Great, thank you. I know that we are right close to the top of the hour and Morgan has another appointment. So Morgan, let me express my appreciation for you for taking the time to share your perspectives, for you for being such a trailblazer in this field for sharing some of those educational opportunities. And maybe just invite your sort of last reflection, if you have one, for those of us who are grappling with the intersection of what do we do with our money irrespective of how large or small it is, in order to shape the kind of world we believe we wish to leave for those who come after us?

Morgan Simon I think the biggest thing that I would say, is just start by doing something, right. I think it's very easy sometimes to feel like, "Oh, if I can't get it perfect, then I'm not gonna try." And I think from that perspective that, I think the idea of whether it's looking at your bank account, whether it's writing your retirement fund administrator and saying, "Hey, how about a social choice option?" Whether it's the next time that I think we're also in the context when we engage with the university as alumni of saying, "I wanna know how my donation is being managed." That there's so many different opportunities that we have to really think about where our money is spending the night? What is the influence that we have? And it's one of those where it's like, just pick one and then keep going. Alright, so in the book I go pretty systematically through in a chapter of like, "Here's all the different ways that you can start." And there's a ton of other tools on the internet and whatnot, but yeah, I think otherwise they can say to you like, "Oh, I haven't totally maximized my values so therefore I'm just gonna keep it all at Bank of America and investment in Walmart." And it's like, "Well, come on, let's try to at least make some progress and to celebrate it as we go."

Sampriti Ganguli Wonderful, well, each of us can be an agent for change in the pursuit of money for justice. And you've certainly provided us some wisdom and guidance along the way, Morgan, so thank you for your time. Thanks to all of you who joined us today. I invite you to follow Morgan and take advantage of some of the links that she has shared. And thank you again, for gracing us with your presence this evening.

Morgan Simon Thank you.