'The role of investments in addressing racial equity' – Bonnie Chiu, co-founder, Pathway Fund

In this piece, Pathway Fund 's co-founder, Bonnie Chiu , writes on the role of social investments in addressing and promoting racial equity.

She outlines the role played by Pathway Fund in ensuring that social investment is used to to catalyse Black and Ethnically Minoritised communities - and details the work still to be done, the assumptions still to be questioned, if we are to ensure that we see those communities so catalysed, over the long-term.

By definition, when you invest in something or someone, you are investing in their future and their potential.

Pathway Fund believes that, if we are to see a more equitable future brokered - a future that repairs the harm inflicted upon minority communities - that we need to invest in that future… and in turn, those communities.

We need to invest in those not treated equitably, those who have not seen their futures, always, supported. Indeed, Pathway Fund believes that investments are crucial to achieving racial equity. And that’s why we do, what we do.?

That said, we do recognise that investments, within the capitalist system and structure that we live in the UK, are often at odds with our mission of addressing racial equity.???

Poet and activist Audre Lorde famously said:??

“For the?master's tool?will never dismantle the master's house”.?

Can we genuinely inspire racial equity, using a capitalist tool – investment – that has led to so many of the inequities we currently experience, in the first place???

We believe for now, yes, but this is a question we need to keep coming back to. To create systems change, we need to constantly challenge the assumptions upon which we base our work.?

Investments, traditionally, are instruments that are used to generate financial returns. But according to Justice Funders, we, in a somewhat more regenerative future, can take a different view on capital:?

?“Rather than being accumulated by individuals and institutions, capital must support the collective capacity of communities most impacted by economic inequality to produce for themselves, give to, and invest directly, in what their communities need, and retain the returns generated from these investments.?All aspects of collective wellbeing must be prioritised over the wealth and power of a few.” ?

Within the context of the UK, there is a pronounced racial wealth gap. Less than 1% of asset managers are Black, despite the group making up 13% of London’s population, where the vast majority of asset managers, are based.??

Pathway Fund 's role is to increase the number of investments managed by Black and Ethnically Minoritised communities, catalysing this process, so that those investments, and the charities that they benefit, can, in turn invest into Black and Ethnically Minoritised communities.

Building community and intergenerational wealth means building self-sufficiency – and helping Black and Ethnically Minoritised fund managers so build that self-sufficiency, is a number one priority for us, at Pathway.??

Over the past two years’, we have provided core grants to three Black-led, first-time, fund managers, to support them in their raising of investment funds – those fund managers, our partner organisations, and even political advocates, tell us that they feel this all to represent an incredibly important step forward for the UK’s social investment sector.??

We are also actively thinking as to how we can enable a great number of real assets to be owned by Black and Minoritised-led organisations.

And we want to actively support fund managers and intermediaries in their creating of alternative structures that enable financial returns to be more equitably distributed, so we are not just repeating the extractive practices of investment funds.??

Redistribution and wealth creation are not mutually exclusive strategies. Philanthropy and policy are needed to address market failures – hence we deploy philanthropic capital and work actively on policy change. But philanthropy and policy need to catalyse investments, as these ultimately can drive innovation and unlock sustainable solutions.?

In the wake of Black Lives Matter movement, the International Monetary Fund published an article to explore the role of race and racism in economics. It found that, within every article in the top ten journals focusing on economics, over the past 10 years’, only 0.2% of the 7,920 articles analysed, covered issues relating to race, racial inequality, and racism.??

Coverage of race is also several times lower than other inclusion-related topics, such as income distribution (2%), poverty (1.4%), and gender (0.8%). Thought leadership is one of the three pillars of our work – alongside enterprise development and asset acquisition – and this statistic reinforces the need to bring forth new ideas, at the intersection of racial equity and economics.??

Can investments really create a new, equitable future? Or are investments merely a transitory mechanism towards the new, somewhat more liberated future, that we have yet come to know? We are making sure that we examine the tensions and contradictions in our work, and we welcome friends, allies, and others, who want to challenge our thinking.??

Bonnie Chiu is the co-founder of Pathway Fund – an impact investment wholesaler dedicated to catalysing opportunities for Black and Ethnically Minoritised communities across the UK.

Find out more about Pathway Fund's work, here: https://www.pathwayfund.org.uk.

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