Impact Investing: Frontier Stories

Abstract

from Wharton, my dreams were focused on independence, including the financial kind. Right out of law school, with my Wharton buddy John Guffey, I started one of the first money funds in the country. Our financial engineering strategies created the money fund that was not only the highest yielding but also the safest. The first Calvert fund, started in 1975, used guaranteed floating Small Business Administration [SBA] loans. Money rolled in. Within a few years, still in our 20s, we were managing Washington’s largest mutual fund. Then I went to a conference that changed my life. This conference, on a post-hippie commune in New Hampshire, was on the topic of Right Livelihood. Right Livelihood is a Tibetan Buddhist concept, part of the eightfold path for leading one’s life. It’s about integrating one’s work with one’s values, in contrast to the old Western model of making money whatever way we can and then donating. So, here I am at the conference, thinking my life’s work is getting another half percent financial return for our investors over the next guy. Hmmmmm!?? It got me thinking. From these ruminations was born Calvert Social Investment Fund: the first socially responsible investing (SRI) fund to comprehensively integrate my generation’s aspirations with the investment process. The guru from the conference center, Marc Sarkady, served as the first chair of our advisory council, and that council’s vision attracted amazing people. As the first public fund to do social investing, we turned a few heads and got some strange looks: promising as we looked, were we still on some drugs from the ’60s? Even the Securities and Exchange Commission asked questions about a fund that would set aside 1 percent of its assets at below-market rates for the purpose of furthering social justice. They also asked what the word “holistic” meant in our proposed prospectus. We got used to being seen as a little weird.