ImpactPHL Perspectives, Volume 2: Making “Risky” Local Investments for the Common Good
About ImpactPHL Perspectives:
If you are curious about pursuing financial returns while influencing the positive growth of Greater Philadelphia and the world at large, then welcome to the conversation. ImpactPHL Perspectives is a multi-part series which explores the many facets of the impact economy in Greater Philadelphia from the perspectives of its doers, movers, shakers, and agents of change. Each volume is written directly by a leader in this space, to discuss best practices and share lessons learned, while challenging our assumptions about the returns - financial and societal - on engagement in the impact economy. For more of ImpactPHL Perspectives, check out the ImpactPHL Blog.
By Elizabeth Killough, Untours Foundation
It is little wonder that the Untours Foundation is noted for taking risks since we were founded by an original risk taker. Hal Taussig, Sr. (1924 – 2016) was just starting to make serious profits through his travel company, Untours, when he decided to create a foundation and give away all his money. ALL of his money. Hal kept one pair of shoes, one perfectly fitted suit that he bought at Salvation Army for $5, one gorgeous bike that his Untours staff gifted him, one unfailing sense of humor, and a substantial number of political t-shirts that became his daily uniform. He lived in a modest house and eventually retired on Social Security, confident that his risk had paid off in rich rewards – for himself and the world.
We carry this torch as risk takers at the Untours Foundation by investing our modest pot of capital with entrepreneurs who create jobs for vulnerable populations, solve social and economic problems, and take seriously that our earth is about ready to shed us all unless we make some significant changes. Banks will not touch this crop of generous, hardworking, super creative entrepreneurs, so the Untours Foundation and angel investors have them largely to ourselves. We throw our weight behind these entrepreneurs because they are solving problems faster than just about anyone we see on the horizon.
The financial services industry has the tools to solve some of our region's and the world's biggest challenges!
Join us at Total Impact on April 26th & 27th to get the insights and connections to adopt socially responsible investment strategies.
There’s a collective societal consciousness that thinks of traditional stock and bond markets as prudent and safe while viewing direct investments into businesses and non-profits as risky. This consciousness falls apart in times like 2008 – and perhaps 2018 – when everyone scrambles to readjust their market investments, to cut their losses. In 2008, many of our fellow foundations did this scramble as their endowments took dives. Perhaps their levels of risk are not so far from ours after all.
Meanwhile, in that same year, many of our foundation’s “risky” investments experienced only small blips in their growth and sales. Our equity investment in Equal Exchange, for example, was and is impressive. This 30-year old Fair Trade cooperative has a steady growth chart ending at its $70 million in sales last year. It benefits farmers in the global south, the earth through its organic product line, and its staff with great jobs. The Untours Foundation was an early equity investor, and we have celebrated their good and steady success by investing in their fruit company, Oke USA.
We do not deny for a second that the Untours Foundation takes risks, but the point is that risk is subjective. When we are all taking the same risk, we often don’t acknowledge it: like getting in our cars each day. We experience car accidents as a surprise instead of the high probability that they unfortunately are. The stock market will also surprise us when the next market “correction” happens. But however our small and mighty foundation is judged, risk taker or not, we continue to build our endowment portfolio business by business.
"We do not deny for a second that the Untours Foundation takes risks, but the point is that risk is subjective. When we are all taking the same risk, we often don’t acknowledge it: like getting in our cars each day."
We look far and wide for stellar businesses that are raising the bar in their industries. Being located in the Philadelphia region, we hear of lots of local opportunities. Hence, about half of the $8 million we have offered in loans and equity over our 25-year history have been made in our own backyard.
One of our backyard investees is Kitchen Harvest, a company that composts residential and consumer food scraps. Unlike most competitors in our region, Kitchen Harvest is composting locally at a farm instead of driving the food scraps an hour away to an industrial composter. A state permit was secured for the local farm, and a new low-mileage, low carbon footprint composting system was born that others can replicate.
Many readers are familiar with the success of Wash Cycle Laundry, a bicycle powered green business that is a second chance employer. The Untours Foundation was the first investor after “friends & family” contributors. Our investment attracted other investors. These are the successes for which we exist!
The Untours Foundations inspires individuals and foundations to invest locally in hand-selected businesses and non-profits as a means to match more of their assets to their values, their missions, their passions – and thus increase the impact of the good work they already do. There are opportunities to match every investor's taste for risk. Come on in.....the water's fine.
Elizabeth Killough is Director of the Untours Foundation. She directed an anti-hunger organization and co-directed an organization that addressed US policy toward Central America. She was self-employed for a decade leading retreats and consulting on organizational development for businesses and non-profits. A long time peace activist, Elizabeth focuses on sustainable development issues as the avenue to peace. Elizabeth holds a Masters of Public and International Affairs from the University of Pittsburgh.