October 23rd, 2014
Giving & Investing in Your Own Backyard
June 20th, 2013
June 20th, 2013
When I married Justin he had a dog and I had a car; neither one of us had any money. Justin had been a monk at the Christian Brothers Winery, so he went to work as a vineyard and winery consultant. He had a client who agreed to match our meager income with investments to start a winery. We crushed our first grapes for Silver Oak Cellars the same week we were married. We were not an overnight success. Typically, it takes 25 years for a winery to become profitable, but over time we became quite successful and wealthy.
Our goals were simple: to have a good life, make really good wine, and have fun in the process. We believed in honesty, fairness to our employees, generosity to our clients, and uncompromising excellence in winemaking. Because of these values we always had more customers than we had bottles of wine, and no turnover in our employees. I don’t understand why more people don’t run their businesses this way; it’s a recipe for success.
Soon after we sold the winery to our financial partner Justin suddenly died. I found advisors to help me execute our estate plan. They created a very traditional estate, with numerous trusts designed primarily to preserve wealth. Our investments were also very traditional diversified portfolios of stocks and bonds.
Following Justin’s death, I sold our house for five million dollars and put the money in a donor advised fund. I turned to Rockefeller Philanthropy Advisors to help my family create a giving plan. My two sons and daughter each have their own philanthropic interests, but we work together as a family to fund at risk adolescents and adults. After awhile, I realized that I enjoyed the philanthropy much more than managing the traditional investments. RPA asked me questions I had never thought about, like what brings me joy, and what experiences I value the most. It had never occurred to me that I could use my money to support things that excite me, like successful and innovative businesses.
I truly believe that businesses must do no harm, and if possible, should solve problems. Our planet can simply no longer afford to have businesses that externalize social and environmental costs. So I decided to invest in start-up businesses that had positive social and environmental impacts. The first start-ups I invested in reminded me more of non-profit organizations than for-profit ones because they had very worthy goals but weak business plans. I learned that a good idea doesn’t always mean a good investment. If it looks like a non-profit and is run like non-profit, it’s probably not profitable and therefore won’t be able to sustain its mission.
I wanted to move beyond outside advisors, so I decided to create a family office, the Meyer Family Enterprises, to help manage these investments. I hired Patrick Gleeson, whom I had known since he was five years old, he used to baby sit my kids. I knew he was trustworthy, smart and supportive. He manages the office with the same values that made the winery so successful; work hard, play fair, and have fun. We encourage employees to take care of themselves and their families, to set manageable goals, and to ask for help when they need it. With Patrick’s help and support, I have moved almost 60% of the family assets into investments with positive impact: my goal is 100%.
I love doing this work. I believe that social entrepreneurs are the most exciting people on the planet because they create long-term solutions to social and environmental problems. If I can support profitable enterprises with a positive impact, that impact will keep growing without outside funding.
I still don’t feel like the money belongs to me. My goal is to be a good steward: to do as much good for as long as I possibly can. I know people who have given all their money away. I am a fiduciary, so I couldn’t give it all away if I wanted to. But if I could, I don’t know whether I would have more impact giving it away or investing it. I do know that whether you make grants or investments, successful outcomes depend on doing your homework and funding great organizations.
For example, we used to give $20,000 a year to a micro finance organization. Then a social entrepreneur named Jonathan Lewis started MicroCredit Enterprises to fund micro financing with loan guarantees. Instead of giving money every year via grants, I use the assets in my portfolio to guarantee $2 million dollars in loans to support microfiance. Each $1 million guarantor enables 5,000 women to feed, cloth, and educate their children. In all my years of working with MicroCredit Enterprises, there has been only one default when I donated $11,400 to a microfinance organization that failed, but most years it costs me nothing. I believe that by working with MicroCredit as a guarantor, instead of donating the money, the impact is greater and the cost is much less.
Even though all my children are entrepreneurs, they were uncomfortable with my investing at first. Older people are expected to be more risk averse than young people, but in my family it’s the opposite. My sons used to question my investment philosophy, but they have listened to me and learned to accept it. We just did a performance review and our bond manager scored 83/100 on social impact last quarter and had a 5% return. Overall our entire portfolio is doing well as we align our financial return expectations with a focus on measuring impact. Our target portfolio return is 5% net with 100% impact. I am happy that they are beginning to understand that you can do good and make money at the same time. I never expected that my years working with my husband to start and run our winey would lead me on a path towards supporting other entrepreneurs, but it has been fulfilling to align my investments and philanthropic endeavors with my values and life experiences.