Youth Envision Academy

The Charlotte-Mecklenburg Police Department’s Envision Academy provides participants with generous scholarship and 160 hours of interaction with officers while increasing their community knowledge, exploring issues which affect the community, and creating a platform from which to envision a better future for themselves and Charlotte. Up to 30 youth, with 5 CMPD mentors, participate in this 8-week summer program. Each week focuses upon a broad theme that is supported by local businesses and non-profit: Envision Orientation; Envision Government, Politics & Justice; Envision the City; Envision the Environment; Envision the Economy; Envision Health and Human Services; Envision Education; Envision the Future. The following article is from one of this summer’s Ambassadors.

For the past two summers I had the privilege of participating in the CMPD’s Envision Academy, first as a scholar and this year as an Ambassador. The academy taught me many valuable things such as leadership, team building, fellowship, and also how to better present myself. Having the opportunity to take on a leadership role this past summer was definitely the highlight of my entire year. I was able to have a more personal connection to my scholars unlike what the officers or other mentors had with them because I could relate to them. I saw a version of myself in a few of the scholars: very shy, not wanting to participate or speak up. I remembered how the Ambassadors last year helped me in my journey to becoming a more open person through various activities like open discussions, games, and scenario workshops so I thought it would be best to try them with this group as well. In the end, I was fortunate enough to see my scholars grow and virtually become different people in the span of less than 3 months. In all honesty, I look forward to checking in on my scholars every so often to see what are up to and watching them become leaders in their own way.

I believe that every high schooler in Charlotte should have the opportunity to partake in programs like Envision. Internships and programs like Envision expose the youth to parts of their community that they would otherwise never know about and helps them learn important networking skills and the value of leadership in a unique and engaging way. Millennials and Gen Z are the future of the ever growing and expanding city of Charlotte and the only way that we will be willing to help is if the value of service and camaraderie is instilled in us before we come to the age where our voices and votes really matter. Until then, we should continue to support businesses like The Gambrell Foundation who sees the best in Charlotte’s youth and are willing to financially support our ideas for the future.

The Central Piedmont Community College Opportunity Scholars Program

The Central Piedmont Community College Opportunity Scholars Program is a 2-year scholarship that supports students in obtaining the education and skills needed to earn a career-focused, technical degree, and embark on a pathway to a successful career. Scholars receive complete cost of attendance—tuition, books and fees—as well as a notebook computer to help meet their digital needs. Scholars participate in CPCC’s Summer Bridge academic enrichment program prior to their first fall semester to help prepare them for college-level work and receive the support of an academic counselor/career coach to help with course and career path selection, find internships and other workplace learning opportunities, and provide assistance with job placement.

 

Introduction to Program-Related Investments (“PRIs”)

Although PRIs are relatively new to The Gambrell Foundation, The Ford foundation originated the concept in 1968. A PRI is money that leaves the foundation’s corpus, counting towards a private foundation’s 5% annual payout requirement in the year made, and goes into the hands of a non-profit or for-profit entity. The primary distinction between a PRI and a grant is that a PRI comes back to the foundation after a predetermined term, increasing a private foundation’s annual payout requirement in the year reimbursed. In other words, a PRI is a recyclable, interest-bearing grant.

The IRS requires that an investment pass the following three basic tests in order to be classified as a PRI:

  1. The primary purpose of the investment is to further the foundation’s charitable mission.
  2. Income generation and capital appreciation are not a meaningful intention of the investment.
    • In other words, would an investor solely engaged in investing for profit make the investment on the same terms? When the answer is no, it means the foundation is accepting higher risk and lower return, thus satisfying this requirement.
  3. The investment can in no way participate in political activities, such as lobbying, campaigning, etc.

Creating, executing and monitoring a PRI requires a team approach comprised of a diverse set of skills, including programmatic, financial and legal. PRIs are customizable and can take various forms, including but not limited to:

  • Interest free or below market rate loan to a non-profit
  • Purchase of promissory note of a non-profit
  • Low interest rate deposit with a bank or other financial institution “linked” to lending for a charitable purpose (often housing or economic development)
  • Loan guarantee or letter of credit to enhance a charitable organization’s creditworthiness in a third-party loan transaction
  • Equity investment in a for-profit entity

United Neighborhoods Partnership

United Way of Central Carolinas is honored to partner with The Gambrell Foundation on United Neighborhoods, a comprehensive initiative launched by this agency that supports greater economic mobility for residents of Charlotte’s most under-resourced neighborhoods.

The Gambrell Foundation funding – $100,000 per year for five years – serves as a foundation for sustaining United Way’s multi-year commitment to two neighborhoods, Grier Heights and Renaissance West.

With support from The Gambrell Foundation, United Way funds two community quarterback organizations that lead revitalization efforts: CrossRoads Corporation for Affordable Housing and Community Development in Grier Heights and Renaissance West Community Initiative in Renaissance West. United Way’s funding ensures each organization can attract and retain the talent needed to remain focused on resident engagement and neighborhood revitalization.

United Way also funds a community grants pool. Residents identify desired neighborhood services at community meetings, and we work with the community quarterbacks to identify and invite service providers to submit grants.

United Way convenes residents and stakeholders to serve on grant review panels that make funding recommendations. Through this grant process, neighborhood residents have the opportunity to access vital services that promote the health, education and financial stability of children and families – all offered in their own neighborhoods.

United Way benefits from The Gambrell Foundation’s broad commitment to advancing economic mobility and racial equity in Charlotte-Mecklenburg. Most notably, United Way led an effort to secure funding to strengthen our community’s capacity to understand whether the work being done by our nonprofit agencies is positively impacting children and families and laying the foundation for greater economic mobility.

With support from The Duke Endowment, Foundation for the Carolinas and Wells Fargo, United Way is funding two graduate fellowships at University of North Carolina-Charlotte. Over the course of the 2019-2020 academic year, these two graduate students will work directly with CrossRoads Corporation and a group of the agencies funded by the community grants process.

The graduate students will help develop a strategy for evaluating the holistic impact of the agencies’ shared efforts, particularly the efforts to promote early care and education of children from birth to age eight and their families.

A third UNC-Charlotte student, funded by a grant from The Gambrell Foundation to the Urban Institute, will expand upon the work of these graduate fellows by analyzing data collected by all nonprofit partners working in Grier Heights. The long-term goal is to equip these nonprofits to entrust their data in an integrated database, allowing for robust, long-term evaluation of our efforts to promote economic mobility.

United Way proudly serves as a funder, thought leader, and community convener to advance economic mobility in Charlotte and the surrounding community. We cannot do our work alone and celebrate our partnership with The Gambrell Foundation.

Central Piedmont Gambrell Foundation Opportunity Scholar – Kavyn Cordon

Kavyn Cordon, Gambrell Foundation Opportunity Scholar

Gambrell Foundation Opportunity Scholar Kavyn Cordon has had a passion for creating food and cooking for as long as he can remember. The North Mecklenburg High School graduate took a number of culinary classes in high school, knowing it was a career path he wanted to pursue after graduation.

But as commencement drew closer, and the prospect of attending Johnson & Wales remained out of reach due to its high cost, Kavyn turned his attention to Central Piedmont and its nationally-accredited culinary arts program.

The more he learned about Central Piedmont, the more attractive it became to the Huntersville, N.C., resident. Kavyn especially liked the college’s affordability and accessibility.

So, he decided to discuss his options at Central Piedmont with his high school guidance counselor. They recommended he apply for the college’s Opportunity Scholars program. With this in mind, Kavyn gathered the required letters of recommendation, worked to maintain his GPA, and preserve his school performance. His hard work paid off – he met the program’s requirements and was named a Gambrell Foundation Opportunity Scholar in spring 2019.

The recognition meant there would be no down time for Kavyn after high school graduation. In mid-June he began Central Piedmont’s Summer Bridge Program, an initiative that strives to make high school graduates more aware of what is expected of them in college before the start of the semester; participation in the program is a component of his scholarship.

Walking around Central Campus during Summer Bridge, Kavyn soaked in the close proximity to uptown Charlotte, enjoyed the campus’s vibrant atmosphere, and reveled in spending time with the many friends he was making as a result of being named a Gambrell Foundation Opportunity Scholar.

“I cannot thank The Gambrell Foundation enough for their support of the Opportunity Scholarship program at Central Piedmont,” explains Kavyn. “I am appreciative of the generosity they’ve shown me and my peers, and I hope I make them proud by using my culinary gifts to make a difference both in my personal life and as a professional in the kitchen.”

Kavyn is currently exploring apprenticeship opportunities that are available through the college’s culinary arts program. He aspires to join the workforce after earning his associate degree in culinary arts from Central Piedmont in spring 2021. What the future will look like post-commencement is still unclear – even to Kavyn.

“I would love to work in a restaurant setting, but I haven’t ruled out the food truck industry either,” said Kavyn. “All I know is I want to jump right into the workforce after graduation. I can’t wait to make my mark on Charlotte’s culinary scene and am hopeful about what’s still to come.”

Overview of Values-Aligned Investment Framework

As promised in my May blog post, I will now elaborate on the foundation’s proprietary Values-Aligned Investment (“VAI”) framework by walking through the below diagram which portrays how we view the foundation’s investment portfolio and categorize the different types of investment holdings.

The portfolio is comprised of two overarching buckets: Classic Investments and VAIs. Classic Investments consist of traditional holdings, such as shares of Google or a corporate taxable bond, which we only track the financial return. This article will focus on the second and unconventional bucket, VAIs, which we track both a financial return and non-financial return (e.g. impact return, social return, environmental return, etc.).

Within VAIs, there are three groupings: zero-rate investments (i.e. grants) produce no return, below-market investments (e.g. Program-Related Investments or PRIs) yield subpar returns and market-rate investments generate competitive returns. I will dedicate my next blog post solely to explaining PRIs, and so for now we will focus on market-rate investments, which we classify into the following three subcategories:

  1. Socially Responsible Investments (“SRI”), or Environmental, Social and Governance Investments (“ESG”), is the broadest grouping comprised of companies that adhere to sound business practices while providing services and products that do not solely target social or environmental issues. For example, Cisco Systems is an American technology company that emphasizes environmental sustainability as evidenced by renewable energy accounting for 80% of the company’s worldwide electricity use.
  2. Impact Investments have a narrower focus than SRI/ESG investments, including companies whose core products and services exclusively address the world’s largest social and environmental problems. For instance, CT Environmental Group is a Chinese wastewater company uniquely positioned to impact the health and well-being of China’s population and its natural environment, targeting an urgent social and environmental concern provided widespread pollution has strained China’s water resources.
  3. Mission-Related Investments (“MRIs”) is the most concentrated subcategory provided it targets investments in companies whose activities are explicitly aligned with the foundation’s unique mission. Provided education is one of three pillars of The Gambrell Foundation’s mission, an investment in SEEK, an Australian company that matches underserved working-class job searchers with employers and offers online training and education in an effort to address the education and training gap, is an example of a MRI for this specific foundation.

Brittany Priester

Brittany Priester

Portfolio Manager

Debunking the Myth that Values-Aligned Investments Forgo Financial Performance

Before delving into our unique values-aligned investment (“VAI”) framework and implementation, I would like to summarize and reference additional academic studies, which further dispel the myth that one sacrifices financial performance when participating in VAIs.

CFA Institute Research Foundation in collaboration with Swiss Sustainable Finance published the Handbook on Sustainable Investments in 2017, which summarizes that “there is ample academic evidence that ESG parameters have a positive influence on the returns from financial assets.” For instance, a 2015 MSCI research report titled “Can ESG Add Alpha?” found that over an eight-year period, the ESG portfolio relatively outperformed the global benchmark by +1.1% per year.

In 2016, Barclays Research published a report titled “Sustainable investing and bond returns,” which concluded that ESG factors “can be applied to credit markets without being detrimental to bondholders’ returns.” Furthermore, bonds with a positive ESG tilt delivered “a small but steady performance benefit.” In 2018, Barclays Research expanded upon their study with an updated report titled “The case for sustainable bond investing strengthens.” The recently updated report confirmed that credit portfolios favoring bonds with high ESG ratings, while keeping all other risk factors unchanged, led to higher returns. Specifically, from July 2009 – March 2018, U.S. and European investment grade bonds with high ESG ratings consistently outperformed those with low ESG ratings. For example, in March 2018, U.S. investment grade bonds with high ESG ratings relatively outperformed by +2.4%.

Similarly, the Journal of Banking and Finance published an article in 2016 titled “The effect of social screening on bond mutual fund performance,” which compared the risk-adjusted performance of more than 100 ESG-focused fixed income funds in the U.S. and eurozone against a sample of conventional fixed income funds. The analysis concluded that over a 13-year period, the ESG funds relatively outperformed by +0.5% annually, which is a noteworthy margin for fixed income investing.

Provided the foundation does not have to sacrifice financial performance in order to participate in VAIs, we incorporated a VAI sleeve into the foundation’s portfolio in 2018. We believe that the foundation’s corpus can be invested in such a way to generate both a competitive financial return while simultaneously achieving a positive impact, or non-financial return.


Brittany Priester

Brittany Priester

Portfolio Manager

Highlights from the 16th Mission Investing Institute hosted by Mission Investors Exchange

As previously mentioned, we are members of Mission Investors Exchange, and so I attended their Mission Investing Institute in March of this year, which was extremely informative and altered my mindset in a few ways. For instance, Several speakers stated that “all investing is impact investing.” In other words, every investment has an impact, it is a matter of whether or not investors examine the impact of investments not specifically categorized as “impact investments.”

My greatest takeaway from the conference was dispelling the myth that impact investments sacrifice portfolio performance. William Burckart, President and COO of The Investment Integration Project (“TIIP”), justified this claim by showing the relative outperformance of impact investments, as represented by the MSCI KLD 400 Social Index (+10.7%), compared to the broad market, S&P 500 Index (+10.2%), on an annualized basis from May 1, 1990 to December 31, 2018. TIIP’s website references a 2015 Harvard Business School working paper titled “Corporate Sustainability: First Evidence on Materiality,” which concluded that “firms with strong ratings on material sustainability issues have better future performance than firms with inferior ratings on the same issues.”

Daryn Dodson, Founder and Managing Director of Illumen Capital, shared a related and yet unique perspective. Illumen is “the world’s first private equity firm dedicated to reducing implicit bias across financial markets to unlock returns and impact,” according to the Stanford Graduate School of Business. Daryn pointed to a McKinsey research report titled “The case for behavioral strategy,” which concluded that companies making unbiased strategic decisions improve return on investment by 6.9% as compared to those companies making biased strategic decisions. Specifically, a company can counter social biases by stimulating genuine debate, which requires diversity in the backgrounds and personalities of the decision makers. Daryn referenced this research in his argument that funds managed by a set of racially diverse managers relatively outperform funds managed by an undiversified group of managers.

In addition to learning a great deal, the institute also provided ample networking opportunities, which proved beneficial and further enhanced my research and implementation of values-aligned investments. For instance, I met the tenured Chief Investment Officer of another single-family office who also manages the portfolio for the family’s foundation, and he happily shared the foundation’s Investment Policy Statement with me, which described their unique approach to investing and portfolio construction. In my opinion it is helpful to explore relevant case studies and learn by the example of experienced and intelligent individuals.


Brittany Priester

Brittany Priester

Portfolio Manager

Stiletto Swagger

On May 11th I had the pleasure, or pain as I would come to find out, of donning some pink high heels and walking down a runway in front of hundreds of people, including Charlotte’s own, Miss USA 2019 Cheslie Kryst.  It was for a great cause and was to raise money for Dress for Success which aims to promote the economic independence of women by providing a network of support, professional attire, and the career development tools to help women thrive in work and in life. The Gambrell Foundation has been a long-time supporter of Dress For Success, and Sarah Belk Gambrell was honored with the 2014 Paradigm award.

I was able to raise almost $3k and the swagger in total raised almost $36k for the cause.  While my performance was less than stellar, I was able to stay upright, which could not be said for everyone on the runway.  Some guys brought their dogs, others brought their children, but everyone brought a sense of awkwardness.  The experience was a great time, not only for the participants, but for the crowd as well and we were able to raise some money which made it all worthwhile.


Matt Potter

Matt Potter

Controller

Values-Aligned Investing: Forging Our Unique Path

As I previously shared, a lack of standardization exists within the Values-Aligned Investing space. So, we charged our own path and created a proprietary investment framework. The first strategic decision we encountered was whether to take a “lens” or “sleeve” approach when implementing this new investment strategy. A lens approach applies the investment strategy to the entire portfolio; whereas, a sleeve approach carves out a piece of the portfolio and applies the investment strategy solely to that piece, while leaving the balance of the portfolio unaffected. We opted for the sleeve method in order to test this new approach on a piece of the pie to ensure it is a strategic fit for the foundation. This approach is not set in stone and will surely evolve over time alongside the ever-changing investment industry.

Next, we devised a proprietary investment framework. We started by selecting the term “Values-Aligned Investments” (“VAI”) as the overarching header for the newly designated investment sleeve. We chose this terminology because it encompasses any investment that aligns with the values of the foundation. This phrasing is sufficiently descriptive while also affording us the flexibility to incorporate a range of investing styles, which we describe as investment subcategories under the VAI header. All VAI subcategories have one primary feature in common in that that they seek both a financial return and non-financial return. A financial return is a return on investment in the conventional sense. For example, a company’s stock price increases from $10 to $12, thus generating a financial return of 20%. A non-financial return is not as easily measured and can take various forms, including social, environmental, impact, etc. For instance, a company generated 16.7 TWh of renewable energy (wind, hydroelectric and solar), thus avoiding 11.8 million metric tons of CO2 emissions, and ultimately avoiding 0.03% of annual global CO2 emissions (i.e. the environmental return).

More to come on the foundation’s specific VAI subcategories in subsequent blog posts…


Brittany Priester

Brittany Priester

Portfolio Manager