Austin Justice Coalition invites The University of Texas at Austin to a New Form of Reparations: Intentional Investing.
This story, like all stories, could start in a bunch of different places — but this one starts with the book Decolonizing Wealth: Indigenous Wisdom to Heal Divides and Restore Balance by Edgar Villanueva. Sidebar: it’s a good book, I recommend reading it. The heart of the book is that we can reclaim money as medicine and use it as a healing tool to repair the world. My only caveat is this: we can’t use, as medicine, anything that we’re currently addicted to… so we’ve got to break our unhealthy relationship with money before we can use it as medicine — the book focuses on the former and seems unaware of the latter. All that said — one of the primary substantive provocations of the book is the analysis that the modern philanthropic foundation is a machine in two parts: the corpus of the endowment that is invested in the market to maximize growth and return (the current default setting) and the fraction of returns on the corpus that are used to fund projects and programs, offer grants to individuals or other organizations, and to fund the operations of the foundation as an organization. Here’s the unsurprising but crucially important fact: the fraction of returns is tiny to the point of near insignificance when compared to the corpus. One of challenges set forth in the book is for foundations to start evaluating the mission-aligned impact that could be made by investing part of the corpus in endeavors that do work that forwards the mission of the foundation. Just to pick one example, the Ford Foundation has started two programs: PRI (program-related investing) and MRI (mission-related investing). Both of these programs accept proposals from organizations that are seeking investments and whose programs and purposes align specific Ford Foundation programs or the foundation’s mission to “reduce poverty and injustice, strengthen democratic values, promote international cooperation, and advance human achievement.” Here’s the difference — these aren’t grants, they are investment proposals that can include programmatic impact, mission-related impact, and return on investment in their portfolio of deliverables. This opens up a range of possibilities previously difficult to imagine. A foundation could chose a proposal that makes a modest impact on its goals and returns a modest profit on its investment, or it could pick a proposal that promises much larger impacts and much higher financial risk, but it now HAS CHOICES where before, in the default model, the only option was to ‘invest for maximum financial gain.’
Let’s pull in another thread, one that needs to be woven into this picture for it to be complete. The contemporary market economy is essentially a single-value crowd-sourced decision engine. Now, when it came into existence we had neither the language of crowd-sourcing, nor data to validate it as a strategic approach, nor comprehension of how vital problem framing is to crowd-sourcing performance. We have some idea about these things now, though more research remains to be done. So, markets aren’t magic & Adam Smith’s invisible hand has been revealed — it’s called crowd-sourcing. Essentially, crowd-sourcing says that if you let a bunch of ‘independent’ actors make decisions, the aggregation of those decisions tend to be ‘good choices’ i.e. significantly better than the average or random choice of single individuals with their idiosyncratic perspectives. What we also understand is that crowd-sourcing is a lot like any socio-centric process — it is highly attuned to framing. How we define the ‘problem we want to solve’ and ‘what methods are on/off the table’ and ‘what the desired outcome is.’ All these cause massive shifts in the results and un-framed crowd-sourcing isn’t effective — without the framing it is just unfocused social energy with the expected randomness and chaos. So, what sort of crowd-sourced engine is the market? Well, to put it in the words that a financial advisor once said to me, “You just let me do my job and go out and make you money, you can put as much or as little of the money I make you into ‘good causes’ as you want…” In other words, the corpus is mine to manage and you can do what you want with the fractional return. Does this sound familiar — hey, you want to retire right? Just let me go out there in the market and make you the money you need to do that… This is the standard (read default) line of the contemporary financial operative — what they don’t talk about, what they would really appreciate us to continue to NOT talk about — is that the lions share of that profit they are promising you is THEFT. I could pick other words. The contemporary terms used in ecological and social justice movements and their push toward ‘just transition’ (a move I support BTW), would be exploitation and extraction. Exploitation of workers and communities — for example, Amazon workers who can’t take a bathroom break and an Amazon CEO who made enough profit to build his own space program. Extraction of natural resources and land value: habitat destruction, toxifying mining and drilling practices, and export of community resources for private gain.
There is no move forward without understanding that the single-variable crowd sourcing system that is modern capitalism is a big part of the problem. Not because crowd-sourcing doesn’t work — it absolutely, got the data to show it, does. But because the single yardstick for success in that crowdsourcing algorithm is the difference between how much is invested and how much you get in ROI (return on investment). Let’s frame this as a thought experiment: if I had, in an envelope on my desk, a proposal that, if followed, would result in the following: meaningful gainful employment for every human being on the planet — and enough non-working leisure time for them to engage in arts, community, etc., a production of all essential resources (food, clothing, shelter, healthcare, education, communications, research, etc.), and the one ‘downside’ of the proposal was that no one would get rich because there’s no ‘fat left for skimming’ in the system… Capitalism would take a hard pass. Would you? Would any human being who isn’t already too damaged by the traumas of our current system pass on such an opportunity? The opportunity is real and in front of us… but that’s another story. Let’ get back to our main thread.
One of the main objections to reparations talk is the resistance to ‘hand outs’… now, this is, of course, total BS. The reason we’re having these conversations is, in large part, due to the exclusion of communities of color from previous generations of hand-outs. But let’s put that aside for a second, and deal with another reality. Investing money is deciding which plants in your garden are going to get water and fertilizer, this is not an analogy — it is literally the same process. When we invest in fossil fuels — because they are making record profits — we are creating a world that extracts more fossil fuels from the ground and puts them in the atmosphere. When we invest in companies that union-bust and union-block and exploit their workers, we produce a world with more worker exploitation. So, to grab that thread about corpus and fractional return — when a foundation picks ‘traditional, default investing’ for its corpus — it is voting for a world that continues to be dominated by exploitation and extraction — because that is the algorithm that we are running in the crowd-sourced process we call ‘the market’. So, intentional investment of the corpus is not about a hand-out, it is not about foresaking the concept of ROI. Intentional investing is about recognizing that the corpus of our investments is MORE POWERFUL than what we do with our fractional returns — whether we’re multi-billion dollar foundations or individual investors trying to retire or universities trying to use philanthropic endowments to stay funded in an era of ever-decreasing financial investment from the state and political pressure to keep tuition low (yes, I’m looking at you <insert name of public university here>!”
So, what the Austin Justice Coalition is requesting from The University of Texas at Austin is both cutting-edge and explicitly not-a-hand-out. For those of you who’d like a deeper understanding of the relationship between UT Austin and Austin’s black community — you can start with The History of the Black Experience by Dr. Leonard Moore (video series). It is well worth the time — here’s my favorite highlight: in order to avoid integration as long as possible, The University of Texas at Austin used to provide full-ride scholarships to Harvard for students of color who were perceived as ‘lawsuit risks’. In other words, if you were black and wanted to go to UT and you came from a family with the educational, political, financial, and cultural capital to bring a lawsuit — the University would offer you a full-ride to a BETTER school, to avoid 2 things: (1) you coming to their school and (2) you suing them for exclusion from that school to which your families tax dollars had been contributing. It was a pretty creative way of saying, “We don’t want you here.” So, some naysayers might add, those students got a great deal — why are we even talking about reparations? Because for every student who got one of those scholarship, there were 10’s and 100’s of students of color who were deserving of admission and whose families did not have the bevy of resources and influence required to bring a successful suit against one of the most powerful institutions in the state. Is that plain enough? Okay, another aspect worth mentioning is the impact of eastward expansion of the UT campus on gentrification… short pointer, long story…
According to (UT’s own) report (Uprooted: Residential Displacement in Austin’s Gentrifying Neighborhoods and What Can Be Done About It, 2018), Austin’s gentrifying neighborhoods will become enclaves primarily for white and wealthier residents, without intervention by the City. “To address these disturbing changes, the City of Austin needs to think big and act boldly,” said Heather Way, a professor at The University of Texas School of Law and co-author of the report.
You know who else could ‘think big and act boldly?’ The same University whose scholars authored that report. The same University whose new sports fields east of IH-35 are direct displacements and key catalysts for accelerating gentrification. Bold action might be to answer the call of Austin Justice Coalition and ‘take its own medicine’ by taking 5% of it’s huge corpus and investing it in an east side of Austin that is a bulwark against the past 40 years of black flight from Austin. UT Austin was creative in how it told blacks ‘we don’t want you here’ it needs to be just as creative now, as it finds a way to say ‘stay, please, we want and need you in our community.’
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