January 1, 2014
Vol: 21 No: 1

Director's Corner

This year, Real Change received a generous gift from a childhood friend

by: Alan Preston , Managing Director

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Every year, prompted by the frenzy of consumption that accompanies Christmas, I reflect on how hard it is for any of us who benefit from capitalism to find our way to an ethical life. This year, a generous gift from a childhood friend brought that home to me like never before.

My friend, whom I’ll call Jason for the purpose of anonymity, is a principal of a hedge fund in New York City. Last week, he made a $20,000 donation to Real Change.

I’ve known Jason since childhood and have always been struck by his values and his integrity. After graduating college, Jason worked as a journalist for progressive newspapers such as the San Francisco Guardian, Village Voice and In These Times. He prided himself on going after stories that weren’t getting told and lived by the Guardian’s mantra of “print the news and raise hell.” After eight years, however, he came away frustrated with how hard it was to get those kinds of stories published and, moreover, how little people seemed to pay attention.

Many of the groups Jason wrote about asked his advice about raising money and creating businesses to advance their missions. Jason began to believe that progressives would be more effective in creating social change if they were more sophisticated in their understanding of business and controlled more capital.

Jason pursued a Masters in Public Administration from Harvard University’s Kennedy School of Government with the intention of going into economic development. He got an internship at a hedge fund to get the hard finance skills he figured he’d need. “I felt like I was dropped behind enemy lines,” he said, “and I was learning the language of corporate America.”

Four years later, Jason was asked by a friend to start their own firm. While he was tempted to leave the financial services industry altogether, he ultimately decided that he could have a greater impact by creating a successful firm and redirecting the profits to social enterprises that lacked access to capital.

In 2007, Jason began investing heavily in social venture capital and “impact investing,” which focuses on investing in companies and projects with the intention of generating positive social and environmental impact, not just financial return.

Since then, he has given away his entire share of the hedge fund’s profits — about $15 million. He’s directed two-thirds of that money to impact investments. He has given the remaining $5 million to progressive nonprofits and political groups fighting for social change.

Upon hearing about his gift to Real Change, I called Jason to say thanks and ask, “Why us?” Without a moment’s hesitation, he said: “You know, my firm has a holding in a firm that operates private prisons, and it’s always bugged me. When I was out visiting you in Seattle earlier this year, and you were talking about how the paper provides an immediate income opportunity for many ex-felons who are attempting to transition back to the workforce, it all kind of fell into place.” Jason offhandedly characterized what he does as “redeploying blood money” and was delighted to support Real Change.

On the surface, it is striking to consider how our careers have taken completely different trajectories. After college, Jason worked in progressive journalism and pursued a degree in public administration, while I worked on Wall Street and earned an MBA.  Since graduate school, he has worked in the financial services industry while I have worked in and around progressive nonprofits. Yet despite our different career paths, Jason and I are both trying to live a life of integrity amidst the paradox of challenging systems that we are benefiting from.

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