A few weeks ago, Laurie Lane Zucker asked me a question that goes to the heart of the vision for WoWE: Why is WoWE an endowment?
I was a guest on Laurie’s fireside chat for Impact Entrepreneur. Laurie asked probing questions about my background and the driving forces that inspired me to create Women of the World Endowment (WoWE).
My background is in investing. I have spent more than two decades structuring deals and developing strategies to direct and influence significant pools of capital. We chose an endowment model for WoWE as it aligns closely with our vision and enables us to accelerate achievement of our mission. Sharing how we landed on this model may influence others who are putting together pools of capital for impact investing.
Endowment model allows for “Triple-Bottom Line Impact”
First, a word about our structure. We are a 501(c)(3) registered entity. We raise donation capital into our evergreen endowment corpus, we invest the endowment capital for financial and impact returns and then we use the income to provide grants to build the field.
Being a 100 percent mission-focused endowment allows WoWE to align every dollar we raise and invest toward our mission of investing in and through women changemakers. These are the female solution drivers involved in building the systems and innovations that are transforming our society in ways that enable all, including women and girls, to achieve their full potential as participants in our social and economic fabric. In fact, we have improved on the endowment model with a structure that allows us to achieve a “triple-bottom line impact” – three layers of impact that can drive our mission:
- First, we invest 100 percent of our capital into investments at the intersection of gender and other social issues, using an investment process that ensures that we earn risk-adjusted financial returns comparable to other market strategies. Often the investment arm of many philanthropies, where the corpus of the assets is located, does not share the same investment values as the philanthropy – creating significant misalignment with the majority of assets invested in ways that sometimes work against the mission of the philanthropy.
- As a second step, we share our strategies and other learnings, inviting other investors to come along and invest into the same strategies and products, so as to exponentially increase the amount of money being invested in and through women to address environmental and social challenges.
- Lastly, we take the financial returns that are generated in the first step and grant them to organizations focused on supporting women changemakers driving systemic change.
With this endowment model, we are creating a virtuous cycle of capital to drive deep impact across society, with each step building on the other.
Step One: Investing entirely in women for risk-adjusted financial returns
As a 501(c)(3), we do not give financial returns to people who donate into our corpus; instead, we provide impact returns, i.e. we are deliberate about collecting data on the positive impact our investments are making and sharing it with our donors. We intentionally designed WoWE to also maximize financial returns. By way of example, we started investing our corpus in April 2020, and by February 2021, our investments have returned more than 25 percent.
Mainstream investors and Wall Street won’t get involved in a really big way unless they know that they will make money. So we are proving the investment case for them – that you can make money and drive important outcomes by investing in and through women who are building and driving solutions to today’s biggest challenges.
Step Two: Sharing the model with others to promote investing in women
That leads to the second step in the cycle: Sharing our model and strategies with other investors to influence their investment in and through women. Since I founded WoWE in 2018, investing with a focus on women has been slowly gaining market traction. Following 2020, a year that women demonstrated exemplary leadership across sectors and at all levels and numerous studies showing that investing in and through women results in better risk mitigation and strong financial returns, we have a once-in-a-generation opportunity for significant acceleration.
But Wall Street remains confused about how to approach investing in and through women, for the most part treating it like it is a separate asset class. As a result, only a sliver of money is invested at the intersection of gender and solutions to environmental and social issues.
We share our strategies and results to bring more and more investors along with us. Doing so multiplies the effect of our strategies and more importantly the impact of our investments.
Step Three: Granting to systems changemakers to drive significant social change
As a last step, we are doing what many endowments do: we are granting the financial returns we generate into non-profits. In our case, we are working with non-profit organizations that we believe will have an outsized benefit on the potential of centralizing women as solution builders as well as driving positive impact for women, girls and their communities.
We strategically select the types of organizations that we collaborate with on the grant making side, seeking out “systems-orchestrators,” organizations that are working to change the system to make the world better for women and girls and all communities.
One such opportunity is our collaboration with the Center for High Impact Philanthropy at the University of Pennsylvania. We collaborated on the design of a government scoring methodology – a replicable, rules-based, gender-lens score for global government debt, grounded in empirical evidence. This work lays the foundation of the first gender focused sovereign debt score to make it easier for all investors to invest with a gender lens. In this case, we believe our collaboration will have an outsized influence in driving investments that signals to governments that investing in physical and non-physical infrastructure that allows women and girls to thrive is key to driving sustainable economic growth.
Building a $5 billion endowment
Our goal is to grow WoWE into a $5 billion endowment over the next 10 years. Why such an audacious goal? Because I know, from my decades of working in finance across the globe, that harnessing the power of financial markets will change the lives of women, girls, and the communities they empower.
With a significant pool of capital, WoWE will further demonstrate the potential for strong financial and impact returns across all asset classes and have a seat at the table in the rooms of capital power influencing how other investors see the significant female opportunity to address the world’s ever increasing challenges. I invite you to learn more about WoWE and our strategies for investing in and through women.