What We’re Learning: Shaping Financial Decisions Using A Racial Equity Lens

The John Rex Endowment is committed to advancing equity for children and their families who have been made most marginalized by systemic racism. As board chair Matt Leatherman said in his May 25 message, “Only by challenging ourselves on matters of race and by intentionally – and constantly – striving for equity in our work can we fulfill our mission.”  In this “What We’re Learning”, the chair of the John Rex Endowment Finance and Audit Committee, Kate Simpson, offers insight into what it means for the committee to do its work through a lens of racial equity.

Q: Why is the Finance and Audit Committee talking about racial equity?

A: Our entire organization, the Endowment’s board and staff, has embraced the need to learn about race and systemic racism and, to take action. Each of our board committees will be reviewing its practices and procedures to ensure there is alignment with our organizational commitment to racial equity. Without any internal review, we may unknowingly be perpetuating actions that conflict with our ability to have the impact we seek in Wake County. At the Endowment, we say that we’re centering race in everything we do.

Q: The purpose of the Finance and Audit Committee is to ensure the continued financial health of the John Rex Endowment. How does racial equity connect to this purpose? 

A: In the spring of this year, the Endowment’s equity consultants, CounterPart Consulting, attended a committee meeting in which we discussed the financial services sector. Broadly speaking, the sector is dominated by white male traditions. There is little race/ethnicity and gender diversity as seen throughout leadership as well as in the composite of portfolio managers.

There is national recognition that change is needed in the sector. While change is happening gradually, it’s important that we, as a foundation, use our influence to contribute to the transformation. From our racial equity discussions, we agreed that two questions should always be explored while doing our work: one, how is race operating and secondly, where should we raise our voice to interrupt? We’ll use these questions to guide us in our responsibility to oversee the processes and mechanisms that make sure the Endowment’s assets are safeguarded and invested. It’s doing our work with a racial equity voice.

Q: In 2019 the Endowment began its racial equity journey in earnest. How would you describe what you have learned so far and the actions the committee has taken?

A: This racial equity journey that we are on is challenging. Each of us openly accepts that we’ll make mistakes, individually and as an organization. When we do, we’ll acknowledge the mistakes and move forward.

We’re proud of the steps the committee has taken so far. These steps are not necessarily linear but first and most important is having the conversation, which we have done. From there we are:

  • discussing with our investment firm its diversity/equity and inclusion policies, investment manager selection practices and ESG (environmental, social and governance) policies;
  • learning about community development financial institutions (CDFIs) which are dedicated to delivering responsible, affordable lending to help under-resourced individuals and communities; and
  • exploring the alignment of investments with strategies that advance the Endowment’s mission.

Q: How do you see racial equity influencing the committee’s work long-term?

A: Right now, the process of embedding a racial equity lens into our committee work is a priority and the actions we are taking are intentional. Over time, equity will be part of the foundation’s DNA so the questions we ask and the decisions we make will be the natural course of our business practice.  All of this will lead to more informed and impactful funding and investment decisions.