Equality Funds is a socially responsible investment services agency. While socially responsible or ethical investment agencies have been around for a little while now, what sets Equality Funds apart is that they screen all investment opportunities based on their LGBT friendliness. Only the companies with the highest scores are eligible for inclusion in Equality Funds’ portfolios.
The really cool thing is that not only are Equality Funds doing a great thing from a social/civil rights perspective, what they’re doing also makes financial sense. After all, at the end of the day, people invest with the hope of making money. Some of the most successful companies of the last decade, such as Apple and Google, have had perfect scores based on Equality Funds’ initial investment criteria. Talk about a win-win!
I recently had the opportunity to speak with Marc Delphine, Founder & CEO from Equality Funds. Here’s what we talked about:
When did Equality Funds get started, who started it and what were your reasons for starting the business?
In 2007, I was the Vice President of the Portland Area Business Association (PABA), Oregon’s only LGBT Chamber of Commerce (at the time). One of my responsibilities was to bring in speakers for our member events. One particular speaker I recall was a man with HRC Portland who brought in the “Buying for Equality” guide via HRC’s Corporate Equality Index. He mentioned that it was corporations (most of them large) which advanced our equality much more so than did the law (which, at the time, banned marriage equality, the ability to give blood or the right to serve in the military).
Because I was also a financial advisor (since 2000), I felt it would be of interest to my clients to have a “fund” of sorts in which to invest for long-term gain and for social responsibility’s sake. After doing my research, I found that companies which practiced LGBT equality as a policy had a significantly higher historical rate of return than did the S&P 500 index overall and that trend continues through to today so I believed that this was a solid business opportunity that was not in existence at the time.
So I decided to create Equality Funds, in order to advance the cause of equality for the LGBT community and show that equality is a great investment!
Are your customers typically part of the LGBT community, or are they straight allies, or a combination of both?
There is a definite combination of both. We have had so much support from people who identify as lesbian, gay, bisexual, transgender but also from our straight allies.
It helps to be a certified LGBT Business Enterprise from the National Gay & Lesbian Chamber of Commerce. It also helps when the companies in which we invest have a great track record of performance (but of course, past performance is not indicative of future gains :-)
What’s the one biggest area that lets businesses down in terms of their LGBT-friendliness, and what possible solutions would you recommend for them to implement?
I would say it is more about ignorance than sinister behavior (Exxon-Mobile could be a giant exception). Most companies simply do not know they are not practicing equality and need a “dangling carrot” rather than a stick.
As an example, for the majority of companies we’ve researched, the idea of offering benefits or insurance plans to transgender employees which includes transition surgery/therapy was not even known or affordable based on their employee makeup. While that is changing, there are plenty of companies which haven’t been enlightened on the benefits packages available to them and their LGBT employees.
Our objective is to enlighten them by enticing them with the potential of purchasing their stock. If we can exercise “shareholder activism” with our ability to purchase enough stock (and with a solid public relations strategy), we can change the way companies operate through market-based solutions.
We believe this is not only how to best change corporate policy and culture, but also the hearts and minds of the employees who work for these companies.
As LGBT rights continue to advance, are you seeing more companies becoming increasingly LGBT-friendly as well?
Absolutely. It is now becoming “cool” (in a business savvy sense) to be LGBT-friendly. In my current hometown of Seattle, entire blocks of businesses (specifically, on Capitol Hill) were celebrating Pride and advertising their support for the community for weeks prior to the parade weekend.
Companies are now target marketing to the community in order to gain market share and we are seeing them lead the pack on not only equality, but on becoming more aware of the fact that all of their employees are one of the, if not the, greatest resource available to the company.
This is creating a shift in culture and business, which we intend on promoting and investing with Equality Funds.