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

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As previously mentioned, we are members of Mission Investors Exchange, and so I attended their Mission Investing Institute in March 2019, 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

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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

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As mentioned, a lack of standardization exists within this 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 nascent strategy 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-evolving 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 articles…

Brittany Priester

Brittany Priester

Portfolio Manager

101st Birthday Wish

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A Collection Stories and Wishes to celebrate Sarah Belk Gambrell’s 101st Birthday

Aunt Sarah:

A woman of substance.

A woman of family.

A woman of business.

A woman of community.

A woman to be admired.

As the matriarch of the Belk Family, it is a privilege and an honor to watch her navigate any audience. I will never forget at her 100th birthday party, I asked her to sign her baby picture in the William Henry Belk – Merchant of the South book. She said, “We need to find out who that cute baby is. I just love cute babies.” I said, “That cute baby is YOU!”

And with the most beautiful smile on her face and the Belk twinkle in her eye, she said, “Oh, my heavens, that was a very, very, very long time ago.”

What an amazing life to live.

XOXO MC Belk Pilon, Niece

 

Sarah, extraordinarily gracious, with great patience outlasts the rest of us with her kindness and innate sense of finding something good to emerge. This certainly was the strength that showed in her and Charlie’s relationship. An enduring remembrance for my wife and me was, as young people, that they included us in their daily lives during a visit, as family, to NYC where we were included in conversation, meals at each of their clubs and to the Brick Presbyterian church; getting to know each of them more individually. Sarah and Charles Gambrell showed confidence and fortitude that each had and was mutual. Charlie’s illness came later and even as it overcome his abilities, Sarah was there keeping him included seemly not minding what was difficult for her as well. Sarah is famous for holding a steady knowing smile. And for sharing in her bright outlook lots of appreciation for the joys she has seen along a remarkable path.

Happy Amazing 101st Birthday! Paul and Cecelia Belk

My little church is probably going to close, but ….

Those were the first words Sarah spoke to me beyond the few warm but brief greetings we had exchanged at community events before then. It might have been heard as a passing thought as we were both walking to our car after an evening at a mutual friend’s house related to one of her other great loves, Princeton Theological Seminary. But it was anything but that.

To say one thing led to another after that is a vast understatement. Still, in her quiet, unassuming, stay-the-background kind of manner, I wonder if she and God has cooked this up all in advance – how Caldwell wouldn’t close but be resurrected in a most unusual way. Even more surprising – that I would be called as its pastor.

Sarah recommended I at least meet the extraordinarily wise and dedicated Rev. Dr. Charles MacDonald, who was on deck at Caldwell when the “new thing” began to take place. He told me of her deep love of her home church, the church of her childhood, which just about everyone else had given up on. Charlie explained that Sarah’s handyman came once or twice a week to repair cracks in the sanctuary plaster, holes in the roof and more. Together, with the handful of stalwart senior saints who had kept attending Caldwell, they kept the ship afloat.

Over time, as the “new thing” took shape, we kept Sarah abreast of what God was doing – how a rag-tag bunch of worshippers, black and white and Latino, affluent and just off the streets, gay and straight, unwavering believers and skeptics alike – had begun to make the church their home, joining the aging octogenarians in the pews. As always, Sarah listened intently, smiled that brilliant smile, twinkled those lovely, penetrating eyes and said softly, “That’s wonderful!” And I never doubted that she meant it.

I will personally always be devoted to this extraordinary LADY for the thought she had to introduce me to Caldwell. The people of Caldwell will always be indebted to Sarah, Sally and the family for how they are conspiring with Lord to bring about plans yet to be seen. Sarah, of course, would only deflect the praise, thinking in her heart that it is only what her parents would want for their church.

“My little church is probably going to close, but ….”

God has a way of finding the right partners to do unexpected things. Sarah and the Lord seem to be good conspirators. Moses lived to the age of 120. Here’s to that many more years for such a modest but remarkable lady who here and elsewhere is fulfilling the words God spoke through the prophet Jeremiah:

“For surely I know the plans I have for you, says the Lord, plans for your welfare and not for harm, to give you a future with hope.” – Jeremiah 29:11

The photo is from summer 2018: Sarah with the first cohort of the Gambrell Scholars in Social Justice at Caldwell Presbyterian Church.

Rev. John Cleghorn
Caldwell Presbyterian Church

When I came to New York to be a dancer, I spent many wonderful times with Aunt Sarah in her N.Y. apartment and office.
It was so inspiring to hear her talk about her work and ideas. Aunt Sarah is a positive, brilliant, gracious and elegant person and I am thankful she is part of my life.
Love, Irene

Tribute to my Aunt Sarah Belk Gambrell on her 101st Birthday:

I think of Aunt Sarah as she reaches this milestone and am so proud to be part of her family! My first memories are of her visits to our home in Atlanta with Uncle Charlie and Cousin Sally in the early 1960’s…she was a beautiful, elegant, and thoughtful woman who made every effort to include our family in her travel, her correspondence and her holiday plans. She never let on that she was incredibly busy with other family or career…we felt very special and very in touch even though she lived hundreds of miles away and traveled only by car or by train for all visits…she did not fly!

As children my siblings and I and our mother and father visited the Gambrells (Sarah, Charlie, and Sally and Aunt Mary) in New York. Later, when I was living in the New York suburbs, Aunt Sarah saved the day by allowing my mother and me to stay in their apartment for a week, awaiting the birth of my first daughter Charlotte at Mt. Sinai hospital. I treasure the memory of that week.

Recently, I have been so proud of the way Aunt Sarah has been an advocate and supporter of the rights of women and of the LGBTQ community. Folks constantly ask if I am related to Sarah Gambrell, the philanthropist, and I am able to proudly claim her and Sally as family. The work that they are doing in Charlotte and throughout NC and the US is so badly needed, and is such an example and an encouragement to others.

Aunt Sarah, here’s to you on your birthday from me and all of the Gambrells. Your life has been an inspiration!

With love from Luck Gambrell Davidson, April 11, 2019

Fond memories of Thanksgiving at her house when we were younger. Beautiful table settings & then running around in the yard. The best way to describe Aunt Sarah is always kind, caring & a true southern belle. Happy 101 birthday!????

Mary Melton

Values-Aligned Investing: Getting Started

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As you probably know, Sally Gambrell is the foundation’s President and the only child of the foundation’s founder, Sarah Belk Gambrell. In January 2018, Sally introduced the idea of impact investing to me by plopping The ImpactAssets Handbook for Investors by Jed Emerson on my desk with the directive to “figure it out.” Sally first learned about the concept of impact investing when she attended Southeastern Council of Foundation’s 2016 annual meeting. Combining my professional experience in traditional portfolio management with Sally’s out of the box thinking and creative vision for the future, we embarked on the journey of restructuring the foundation’s investment portfolio.

After making the strategic decision to incorporate some form of “impact investments” into the foundation’s portfolio, I began conducting exploratory research to familiarize myself with the existing landscape. I quickly learned that a lack of standardization exists within this nascent investment strategy resulting in a disconnect and confusion when comparing varying resources. For now, I will set this issue aside and focus on the initial steps we took when embarking on our journey as well as share some helpful resources with those of you who would like to forge a similar path.

To begin, I studied the websites of experienced impact investors. Personally, I found the below foundations to be the most informative in sharing their unique views and experiences.

Next, I called the Mary Reynolds Babcock Foundation and Phillips Foundation provided our shared geographical mission focus. I gained deeper insight and answers to specific questions by interacting directly with the experienced and forthcoming leaders at these two organizations. Upon comparing my notes, I noticed one glaring similarity – both organizations highly recommended we join the Mission Investors Exchange (MIE), which provides tools and resources, motivation and association to enhance the impact investing practice of its 200+ members. We joined MIE (www.missioninvestors.org) in 2018 and it has been an unparalleled resource for us. More to come on my utilization of MIE’s resources and guidance in a future article. 

Ultimately, I read all relevant materials that I could get my hands on, including books, white papers, investment policy statements, articles, etc. I also connected in-person, over the phone or via email with anyone who was willing to share their impact investing philosophy and best practices with me. I spent the past couple of years learning everything I could, and I continue to learn something new every day as my research delves deeper into an evolving investment strategy.   

Brittany Priester

Brittany Priester

Portfolio Manager