Ed Talk

“We must measure what is important and celebrate what is priceless.”

– Edward Dugger III

One morning five years ago, I had an encounter at my local gym that I will never forget. I was well into my usual workout routine when I became aware of someone looking at me from a distance. I turned to see who it was and caught the eye of another black man, unknown to me. We smiled and continued our workouts.

What happened next reaffirmed my belief that impact investing is about far more than disciplined intentionality, measurement, non-concessionary returns, or even systemic change. I was freshly inspired and reminded that the core purpose is catalyzing hope — the belief that good can and will come from our diligent efforts. As Reverend Dr. Martin Luther King eloquently reminds us, “Everything that is done in this world is done by hope.”

For most of my career, my view of what I was accomplishing as an investor had been more narrow and shallow. Perhaps because I was a pioneer with over 20+ years of what we now call impact investing under my belt, I came late to the wisdom that comes from seeing the ripple effect of what your life’s work has spawned. So I was prone to answer the often raised question, “What impact did you have and how did you measure it?” with a response stripped of the foundational language of social and economic justice, and reduced solely to the business case. Without hesitation, I would say:

“We saw an untapped opportunity to move founders of color into the mainstream of American business and pursued it with five measurable objectives. First, we wanted to move these founders into industry sectors where they did not exist before. We met that objective by launching successful businesses in over 15 industry sectors. Second, we wanted to build businesses of scale. We met that objective by launching and growing businesses that became the #3 and #7 largest companies controlled by founders of color and the #1 and #3 largest publicly traded companies. Third, we wanted our management teams and employees to reflect the demographics of America. We met that objective by achieving 30% managers and employees of color across our portfolio while creating over 7,000 new jobs. Fourth, we wanted to demonstrate that the companies we backed were bankable. We met that objective by assisting them to attract over $2 billion in equity and debt to grow their businesses. Finally, we wanted to demonstrate that non-concessionary returns could be generated by this targeted, impact driven approach. We met that objective by generating an IRR of 32% during the last decade of our investing period.”

I am proud of this narrative. It is an extraordinary record. And with the launching of Reinventure Capital, I have no doubt our team will exceed it many times over with a new generation of founders who are of color and women.

AND the narrow focus of this narrative on what is strictly quantifiable tells only a small part of the story. By falling back on a standard response framed to be readily understood by traditional investors, policy makers and skeptics, I have made the mistake of over-emphasizing and overvaluing what is important and measurable, while omitting and undervaluing what is unmeasurable yet priceless.

The guy at the gym eventually came over to me and asked if I were Ed Dugger. “You don’t know me; we’ve never met,” he said.  “But you changed my life — and I want to thank you.”

I was floored by the story he then told me, and further stunned by what he shared in a followup note:

“It was truly an honor to meet you at the fitness center this morning. I’m sorry to have interrupted your workout but I felt compelled to do so because as reluctant as I was, I just had to know if you were you. As I tried to explain, you were such an incredible role model for me and very much a part of my consciousness for most of my life and career, especially during my critical formative years as I was trying to complete my escape from the streets by reinventing myself and by carving out a new sense of identity and purpose.

Much of what I have done in my career I did with the memory of what I knew about you and your career in mind. Beginning, if I recall correctly, with my completion of the MPP at Harvard many years ago, and continuing up to and including my decision to work in venture philanthropy three years ago, as well as my more recent decision to seek a career in private equity and social purpose, for a for-profit enterprise. I don’t know why it never occurred to me to seek you out over the years: I guess I’m just not wired that way. But I’m deeply grateful that the universe saw fit to cross our paths, if for no other reason than to permit me to shake your hand and thank you for being such a pioneer, model and inspiration.

When I first read about you in that Esquire magazine article those many years ago, your story blew my mind and opened it up to possibilities I had never imagined nor dared dream before.  Something changed in me as I read it, and, as a result, my expectations as to what was possible were forever altered.  I then went on to do and experience things I would never have thought possible during my teen years, when I was running the streets and just trying to survive.

I guess I just want you to understand why meeting you today was so special for me.  I also just want to say thank you again for your example, and for the way in which your life and career helped me find the meaning in mine.”

I never invested in this man.  I never met him.  I never even knew someone he called a friend.  And yet the long ripple emerging from the work I was privileged to do, starting as simply important objectives to some, produced a priceless gift to him.  It was the gift of hope.

This man is Rod McCowan, graduate of Yale and Harvard Universities. Former White House Fellow, executive at Herman Miller, and partner at New Profit. Now an expert builder of diverse, high-performance, global leadership teams at Hitachi.  An all-round amazing guy.

He is not alone, just the tip of the iceberg.  Others have come forth in a similar way sharing stories of restored hope, changed lives, and gratitude.    All confirming that impact investing at its best not only reinvents investing, but reignites and sustains hope in unexpected places, in unimaginable ways.  That priceless ripple effect is not something that comes at the expense of quantifiable impact metrics or concessionary returns.  And although it is not readily quantifiable, it is an essential outcome of serious impact investing.

For those of you with long memories for ad campaigns, this rephrasing of my facts-focused track record might sound suspiciously familiar:  “$30 million invested, 7,000 new jobs created, 32% IRR.  Inspiring amazing people like Rod McCowan without even knowing it:  priceless.”

Even with explicitly financially-driven companies like MasterCard offering such an affecting and enduring example to follow, it can be difficult to embrace the priceless along with the quantifiable.  Which is exactly why it is vital that we make a point of talking about and celebrating the unmeasurable but priceless ripples on equal footing with the readily quantifiable impacts and returns.

We invite you to join with us in creating priceless ripples.  To unleash innovative and extraordinary talent, and to grow businesses that matter.   To invest in a future you want to create.  To generate non-concessionary returns and catalyze hope.  Because that is what real impact looks like.

Please contact us to continue the conversation on how we can create real impact together.