Social innovation requires us to 1) believe there is a constructive way to change seemingly intractable problems, 2) rethink problems and opportunities, sometimes flipping conventional wisdom on its head, and 3) apply concepts or frameworks from different disciplines to spot potential new solutions. Which is why we love this article and interview from Forbes with Deborah Frieze on what she’s doing in impact investing in Boston.
We’ve written before about impact investing, the practice of leveraging private capital to drive social and environmental impact, and its potential for faith-based institutions. The field of impact investing has some challenges, one being that it does little to address the economic power dynamics that are driving rising inequality. Indeed, in its mainstream form, it can perpetuate those dynamics. But through her organization, the Boston Impact Initiative Fund, Frieze is showing how to do it differently. Applying a biomimicry approach to the challenge, she is flipping the existing impact investment model in order to not just build resilient local economies but to directly tackle the racial wealth gap. The Fund, which includes faith-based institutions as investors, flips the risk-return ratio such that those who can afford to absorb more risk do so, and those who can afford lower returns agree to do so. And vice versa: those who can least afford risk absorb less, and those who cannot afford lower returns access higher ones.
Frieze discusses in the interview the problem with focusing solely on jobs to address racial and economic inequality. We have to address wealth. Frieze notes that the median net worth of a black family in Boston is $8.
Read the article and be sure to listen to the interview to learn how a self-described activist inspired by family members who fled anti-Semitism in Eastern Europe is innovating a new model rather than just fighting the old.