Owned by Movement Leaders, This Financial Firm Is Shaking Up Nonprofit Investing

When Just Futures launched last year, its founders hoped to move some of the nearly $1.3 trillion in combined nonprofit retirement accounts — a sum greater than the assets of all U.S. foundations — into investments that aligned with nonprofit workers’ values.

Now, the team has now reset its sights — and it’s aiming even higher. After hearing from more than 200 social justice organizations during a national listening tour, the organization remains committed to its original goal, but is now offering management services for two other types of funds: charitable institutions’ assets and community investment funds.

As a first step, it will be managing the new $20 million Just Transition Integrated Capital Fund, recently launched by the progressive grantmaker network Justice Funders, which aims to demonstrate to foundations how they can use their assets to provide support to communities of color and the working class via financing like no-interest loans. The goal is to move financial investments away from extractive relationships, to use the popular progressive lexicon that the firm also employs.

“Philanthropy is largely addicted to the accumulation of wealth,” said Alex Saingchin, cofounder and president. “If they’re serious about addressing racial inequality, if they’re serious about restoring the planet, and our climate crisis, it needs to start moving away from making money as the status quo.”

That’s not the only development in a busy inaugural year for Just Futures. Last month, the firm announced the five national nonprofits that will eventually be its majority owners, a measure the founders hope ensures a long-term commitment to people over profit. 

Chosen to represent a mix of geographies and constituencies, the groups are the Center for Economic Democracy, Chisholm Legacy Project, National Black Food and Justice Alliance, NDN Fund (the investing and lending arm of NDN Collective) and Right to the City Alliance.

The firm’s founding idea — a retirement plan — is also up and running. For now, it has about a dozen clients representing about $1 million, invested in a custom mix of existing funds. Reflective of its values, the plan is set up to minimize exposure to 30 companies and asset managers, with a goal of limiting investments in sectors like fossil fuels and private prisons. It set up those screens with support from the Action Center for Race and the Economy, Majority Action, Worth Rises and other BIPOC-led organizations focused on corporate accountability, according to Saingchin.

Just Futures’ long-term vision is still to launch its own index fund that prioritizes social justice. But for now, it is focused on “slow and steady” growth, said Saingchin. Other than the $20 million fund, clients have pledged $2 million in various types of investment capital, and the firm has raised $2.5 million in grants and investments for its operations.

“This is just phase one,” Saingchin said. “The current financial system is not really set up for the type of effect that we want.”

“The most powerful thing possible”

Whether in on-stage speeches or in private meetings, Jacqui Patterson says she has many chances to tell philanthropists and others what she thinks they should do.

The founder and executive director of the Chisholm Legacy Project, one of Just Futures’ five future nonprofit owners, has a new reason to point to her own organization as an example of change in action.

“So often, I’m haranguing other people to do things,” Patterson said. “To be able to say, ‘we’re doing it, and this is what we’re experiencing from it,’ that’s just the most powerful thing possible.”

The five nonprofits will be granted a combined 30% equity stake in Just Futures through a trust that will launch in 2024. That share will increase to 55% as the firm grows both its revenue and its assets under management. Called the Movement Trust, organizers said the arrangement is roughly comparable to the ownership structure announced by Patagonia’s founder last year, and it follows through on a pledge made by the organizers when the firm was launched. 

“We wanted to be accountable to organizations that are on the front lines,” said Saingchin. “These are organizations that are really trying to flip the dynamic of our current financial system.”

When your financial advisor tells you “that can’t be done”

Dana Kawaoka-Chen, co-executive director of Justice Funders, has had many conversations with potential investment services providers about structures that reflect her members’ values. As she puts it, that means relying on investments that are regenerative rather than extractive, serving community rather than profit. 

Several of those chats have been with firms that currently serve her members, but reactions fall along a similar spectrum. “It ranges from disbelief to, ‘Oh, that’s cute,’” she said. Some have told her flat out, “that can’t be done.” 

So partnering with Just Futures as it got off the ground was a natural fit. It helps that she’s known Saingchin for more than a decade, as his career has moved from law to philanthropy to finance, including a spell as board chair for Justice Funders.  

The pairing is as much collaboration as client-provider relationship. Justice Funders hosted three popular webinars featuring Just Futures’ research in the run-up to the firm’s launch last year, and the former’s senior director of just transition investing, Maria Nakae, sits on the latter’s investment committee. 

Now, the two are joining forces on Just Transition Integrated Capital Fund, designed for foundation assets rather than retirement accounts. The fund recently released its investment policy statement, a cartoon-aided guide to its structure and driving values. Ten Justice Funders members, including the Arch Foundation, Ceres Trust and Grove Foundation, have committed grants or loans to the fund, ranging in size from $100,000 to $5 million. Similar to Just Futures itself, the backers of the fund will report to a governance body made up of leaders from five movement groups, flipping the traditional power dynamic. (The two bodies are different, but one group sits on both boards.)

“We’re changing what it looks like to be accountable, who should take responsibility for having to report out, who has the privilege to be able to take the most risk,” Kawaoka-Chen said. “We’re also hoping that these become new practices for philanthropy.”

“What are you actually waiting for?”

As Just Futures gets off the ground, Saingchin and the team are consciously balancing what’s possible today with what they hope to bring about.

For instance, the organization launched amid a Republican attempt to score culture war political points against what Wall Street calls ESG investing — considering environmental, social and governance factors in decision-making. Meanwhile, watchdog groups are compiling a mountain of evidence that such standards are often simply marketing, if not greenwashing. Yet Saingchin does not dismiss ESG.

“We do actually see ESG as a step in the right direction,” he said, highlighting the SEC’s recently released regulations as a positive development. “At the same time, that’s sort of for the herd.”

The racial diversity of Just Futures’ team and new management is, on its own, radical in the financial sector. The firm’s study last year, “Building a Social Justice Investment Chain,” found that the wealthiest tenth of the American population controls 77% of all U.S. wealth, and their share accounts for 84% of the capital managed by Wall Street, which in turn is 98.9% controlled by white men.

Foundations can help change that reality while also addressing entrenched challenges, said Saingchin.

“The racial wealth gap is still getting wider, the climate crisis is getting worse,” he said. “If philanthropy is serious about addressing these issues, then they need to invest in communities of color in a different way.”

For Patterson, who is a past op-ed contributor to IP, simply looking at the world around us leaves her wondering what exactly it would take for foundations to try something new instead of sitting on their assets for a future “rainy day.”

“We are in an active deluge,” she said. “What are you actually waiting for?”