Equitable societies result from official and informal movements that prioritize ladders to economic opportunity that are embedded in organizations. At Kaiju, we are committed to exploring new ways to increase support for these ladders to social and economic mobility, ensuring that each rung is accessible, navigable, and clearly defined.
During the past decade we have watched a slew of social impact funds and corporate social responsibility efforts blossom across America and the globe. Broadly defined, the trend involves a cross-section of private and nonprofit entities in various depths of collaboration with local, state, or national governments.
The goal of these hybrid efforts is to create an ecosystem of consumer and business investment vehicles that ultimately radiate wide civic gains.
Investment vehicles include microloan programs, community development financial institutions (CDFIs, and Opportunity Zone projects, all of which provide tax incentives to private entities taking on projects to spur economic growth and job creation. But they can prove challenging to investors seeking realistic ways to meld public interest impact with reasonable returns.
One emerging approach is for investors to orient their investment priorities in relation to the major socioeconomic pillars that shape our shared environment: Healthcare, Energy, Housing, and Transportation. These are but a few areas ripe for “activist” investing that factor social equity into traditional investor decision-making.
Accordingly, prioritizing pillars can aid investors’ ability to home in on vehicles that produce desired results, ones that support ladders to social equity and mobility. Increasingly, we see signs that legacy vehicles can successfully be melded to civic investment applications that have solid future-forward potential.
Should investors seek to support Green Energy initiatives that have long-tail market potential? How about new housing initiatives that originate with equity and environmental sustainability front and center?
There are abundant signs that — distinct from a historic investor focus on short-term gains or legacy opportunities, such as mutual funds or U.S. Treasury Bond vehicles — socially conscious investors can now achieve legacy ROI from creative projects that also benefit the public good.
Consider recent discussions between private investors, elected officials, and civic leaders unfolding in many U.S. cities regarding the potential cross-sector benefits of scaled-up Public-Private Partnerships, aka, “P3s:”
“[P3s] can be an incredible use of private markets to help further development, planning and smart growth that cities and towns need but are unable to do on their own,’ said Lauren Jezienicki, the founder and chief executive of the One Circle Company, a residential real estate firm, who worked on the partnerships when she was a senior vice president at Bozzuto, a real estate developer.” --Miranda S. Spivack, New York Times, Jan. 19, 2021.
Of course, traditional focus on researching investment opportunities applies here, too, as reviews of the recent array of P3s show mixed results, according to that The New York Times article:
“Whether public-private partnerships are the right choice for state and local governments is an open question. Their big selling points are usually that the private developer pays for improvements and construction up front, often manages the entire project and promises faster completion than if the government handled the project on its own. But because interest rates are low and likely to stay that way for a while, state and local governments could also float bonds to raise money for infrastructure projects.”
Still, due diligence can now also be applied to identifying investors’ pillar (values-based) priorities, be they green energy companies, health-tech, housing innovation, or a combination, with an eye toward leveraging P3 vehicles that are cropping up nationwide. A template for developing decision-making calculations in the P3 space is available via Harvard Business Review.
Prioritizing emerging opportunities that follow investors’ pillar considerations can then be informed by targeted research encompassing values-based data-points, as well as by traditional focus on ROI.
Now that rising numbers of traditional investment vehicles — notably major legacy enterprises such as fossil fuels brands — are facing increasingly aggressive bouts of activism from non-traditional investors, we anticipate expanding arenas for building new ladders of opportunity that are visionary, equitable, and durable.
Amy Alexander's reporting and commentary on demographics, cultural politics, and the innovation economy has been published in The Atlantic, The New York Times, NPR, and other outlets. She lives in Montgomery County, Maryland.