Due Diligence and Risk-Taking in Gender Lens Investing (Liveblog)

On Thursday, May 20th, the Philanthropy Women staff teamed up with Roslyn Dawson Thompson and Rehana Nathoo to discuss the importance of gender lens investing: what it is, how it works, and why we should focus our efforts on it.

gender lens investing

Guests Rehana Nathoo, Founder and CEO of Spectrum Impact, and Roslyn Dawson Thompson, President and CEO of Texas Women’s Foundation, discussed gender-lens investing with Philanthropy Women’s Editor-in-Chief, Kiersten Marek.

The conversation opened with a welcome to the day’s speakers and attendees, as well as a general thanks to Invest for Better for facilitating our conversation with Rehana and Roslyn. Citing the male-dominated nature of finance and corporate life, Kiersten shared her experiences in investing in a gender lens Exchange Traded Fund (EFT) called SHE.

“Gender lens investing is so much more of an expansive definition of investing,” Kiersten said. “It’s not 100% about financial returns. Much of the financial world revolves around the idea that returns are the only thing that matters, but gender lens shows us that it’s about supporting a quality product that aligns with your values, and also advances trends toward gender equality.”

Roslyn Dawson Thompson on Shifting TWF to Gender Lens Investing

As President of the Texas Women’s Foundation, Roslyn Dawson Thompson is well-versed in investing in women. Under Roslyn’s leadership, TWF has shifted its investments to put 100% of its investment resources into a “mission-aligned” gender lens portfolio.

To Roslyn, gender lens investment came about due to the feeling of “powerlessness” many women, regardless of their net worth, felt about their control over their own finances and the impact they could make in the world.

Roslyn joined TWF in 2011, and by 2012 the Foundation began diversifying its investing impact. “At the time we introduced the idea to our investment advisory committee, there were exactly four investments we could make,” she remembered. The advisory committee was “nervous” about positioning their investment strategy so specifically toward women. The risk, Roslyn said, was “a social construct, not a reality.”

By 2015, TWF’s strategic plan moved to 8-12% of the portfolio committed to gender equity, but the organization broke its goal before the end of the year. Recognizing a huge opportunity, by 2019, TWF called for 100% of its assets to be in a gendered portfolio.

“After all, we are a women’s foundation dedicated to empowerment for women and girls,” said Roslyn. “What better way to use our assets than in a gender lens portfolio?”

“There aren’t any more ‘naysayers’ on our investment committee — they are all proud as punch,” she added. “Our portfolio is outperforming all of its benchmarks, and we are thrilled with that. We will always see fluctuations in the market, but I am confident that [our portfolio] will be more bulletproof than not.”

Rehana Nathoo: Gender Lens Investing — How is it a Powerful Tool?

Next, Rehana Nathoo took the virtual stage to speak to the importance of gender lens investment strategies.

Spectrum Impact is an organization dedicated to helping individuals and organizations develop a gendered impact investing footprint. The goal of the organization is to increase accessibility to the field of impact investing — the subjective views and values we each hold allow us to bring our values into our investment decisions, and Spectrum Impact wants to connect people with opportunities to make their dollars make a difference.

Rehana cited two major misconceptions about gender lens investing: that investing in women will result in portfolio losses, and that there are not enough investment opportunities out there to specifically support women and girls.

“Like impact investing, gender lens investing has an investment approach but doesn’t actually differ from traditional investment work. It doesn’t have to be a ‘sitting by itself’ investment approach — it’s a lens,” Rehana explained. What this means is that “gendered” investment strategies do not have to be separate from the rest of a company or individual’s portfolio — instead, that “lens” should be applied to an entire overall strategy.

“We do our best to connect about the value of gender lens investing,” she said. “If you’re not thinking about gender and diversity in the decisions that you make, then you’re missing something.”

Rehana also pointed out the importance of investing in grassroots organizations, particularly campaigns focused outside of North America and Europe.

“Change comes from the bottom up,” Roslyn agreed. “Targeting organizations with feet on the ground is so important.”

Gender Lens Investing as a Product Investment

In discussing recent investments, Kiersten noted that the development of Philanthropy Women has been a long road of growing the audience for a new gender lens product. For Philanthropy Women in particular, Kiersten’s goal is to trend away from being subsidized by donations and toward being funded as a free market product sought by those who want the most informed strategy to guide their financial decisions, both in philanthropy and in any gender lens strategy they are pursuing.

“We’re doing a better job of evaluating gender lens exposure in every stage,” said Rehana. “One of the things I have found unbelievably helpful is to guide portfolio companies into tracking all of the relative outputs that are connected to gender. …Gender is deeply connected to climate change [and other SDGs], so it’s critical to look at the intersections between gender and impact themes that your portfolios are looking at.”

Rehana also noted the multiple impacts of GLI — hiring more women, investing in women entrepreneurs, investing capital in women-supporting organizations, etc. are all linked to a wide range of impacts that companies and individuals can see from the simplest strategies.

In tracking against the SDGs, Roslyn echoed that GLI funding can be connected to twelve of the different sustainable development goals. “The numbers are there,” Roslyn said. “It took a bit of education for our board and investment committee members to understand that this is not just checking the box for #5 — this is looking across the dimensionality of what GLI is and does, and what the adherence to some of those goals does for women around the world.”

For example, it’s not enough to simply “hire more women” or have a certain percentage of women on a company board — rather, organizations should apply GLI lenses to their investment strategies as an all-inclusive and comprehensive strategy for growth.

“This is not a reductive game, this is an expansive game, and one that we want everyone to participate in,” Roslyn added.

The Wealth Shift and the Future of GLI

As more wealth shifts into the hands of women, the future of investing is likely to change as well.

Roslyn mentioned that when women finally gain more access to inheritances and/or other forms of capital, one of the first things they do is change their advisor away from “that old white guy” to an advisor focused on diversity, inclusion, and gender equity.

In the future, Roslyn expects to see more diverse donor movements and investment strategies. As financial power moves to women, hopefully investment strategies will focus on empowerment over returns.

“We’re going to leap way faster than we did to get here,” added Rehana. “This is optimism, but we’re already seeing shades of this in our work, and that equation is shifting pretty quickly.”

Impact is Impact, No Matter How Small

“Don’t feel like just because you don’t have a hundred million dollars in investments, you can’t make a difference, because that is absolutely not true,” Rehana said.

Kiersten shared her own experiences with attempting GLI in her earlier investment strategies. However, she was told that she needed at least $500,000 in cash before she should be looking into buying individual stocks or more risky ETF’s. “It felt like [the male financial advisor] was telling me, ‘You can’t handle this, honey.'”

“Yes,” Rehana said. “That’s exactly how women are closed out of the equation.”

As financial literacy grows in the younger generations, growing investors are approaching GLI with a more diverse and understanding lens.

“Do your own due diligence, form a group, and give each other support to do this work,” said Kiersten. “You’ll probably come out feeling extremely satisfied with your impact.”

Related:

Texas Women’s Fdn Event Spotlights Outstanding Gender Lens Leaders

Founded in Diversity, Texas Women’s Foundation Expands

Path to Empowerment: A Women’s Fdn Focused on Economics


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Author: Maggie May

Maggie May is a small business owner, author, and story-centric content strategist headquartered in Annapolis, MD and Philadelphia, PA. She has a passion for finding stories and telling them the way they're meant to be told.

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