Stephanie has always had a passion for helping others invest in quality nonprofits and social ventures. As the founder of Impact Finance Center, she is able to direct fundraising efforts from organizations to interested philanthropists.
Spotlight Summary
With a background in real estate investments and private equity, Stephanie has a unique perspective on the dollar. In this interview, Stephanie speaks on the concept of full spectrum capital and the gap in financial literacy within nonprofits. Her company, Impact Finance Center, partners with community foundations and associations to educate investors on ways to make their dollars more effective and beneficial to their causes.
Resources
To learn more about our On Purpose guest, please visit Stephanie’s website.
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Audio Transcription
Lauren Hong (00:03):
All right. Well, Stephanie, it's so great to have you. Thank you for taking the time to be here. I'm looking forward to hearing more about you and your business. I was just reading a little bit more about your bio and actually really had fun looking at your LinkedIn headlines. So I want to hear a little bit more about all that, especially the systems entrepreneur piece, the dancer. Before I try to attempt a proper introduction, I'll let you share a little bit more about your background, who you are, and I’m looking forward to hearing more about impact finance.
Stephanie Gripne (00:35):
Fantastic. So great to be with you, Lauren. My name is Dr. Stephanie Gripne. A lot of people call me Dr. Steph. I have been working in the financial markets since I started my real estate investing career back in 2000 to 2005 when I was a graduate student. My dad came to live with me and we developed an affordable housing program, helping families going through medical bankruptcy, and I just loved doing transactions. So I stepped away from a career in natural resources. My master's degree is in mathematical ecology and my PhD is in forest economics, but I decided I wanted to do transactions and deals. And so hundreds of deals later, I've lost track, I’ve probably done 300 to 500 transactions. I first did deals and a lot of it started with conservation real estate and funds.
Stephanie Gripne (01:29):
And then I joined a $100 million private equity fund. And so I went from what most of us do, doing individual transactions. I was like, wait, that's not enough. I want to do more. And that's funds. And then I was like, wait, funds, aren't moving enough money. And I want to fix the system. So I was recruited to be a professor at the University of Colorado Leeds School of Business in 2012. I was the director for the initiative for sustainable real estate and a finance professor. I also had a position within the University of Colorado real estate validation. And that's where my journey started in the last chapter. And I just asked myself, why isn't somebody moving? All of these amazing human beings who have access to resources are intelligent. They're mission aligned, and the money's stuck and what's why is it stuck? And I came up with a couple of hypotheses of why it was stuck and a big part was what we call non- conflicted and investor education, people who would provide individuals and organizations with investment education from an organization that wasn't trying to raise the funds to become your investment advisor. And so that was my bet back in 2010 to 2012. And I've been doing that ever since.
Lauren Hong (02:54):
And then with that bet, is that what spun off Impact Finance Center or more about how that got running?
Stephanie Gripne (03:04):
Yeah. When I was a professor from 2010 to 2012, I realized quickly it wasn't the real estate. That was interesting. It was the innovative financial thinking we were doing. And now it's only recently in the last year, I've realized I'm actually just the restoration of college, just in the financial markets, which is really combining my natural resource background with my financial day-to-day job. And I realized a couple of things. We don't think about a grant dollar or if you're in a Fortune 100 company, a marketing dollar, a corporate social responsibility dollar, and an HR dollar or a research and development dollar as having a financial return. We think of it as an expense. And when in fact the financial return is negative 100% loss, which means when we coached the Walton Family Foundation to do a negative 50% return investment for $500,000, I can make a case that that's an above market rate investment at 50% versus giving your money away at negative 100% loss.
Stephanie Gripne (04:11):
And so this concept is what we refer to as full spectrum capital, that we actually have enough money to do what we would do if we would instead of me personally taking a dollar and donating it over here, a dollar of investing it with a friend and lending money at 2%, a dollar that I would invest in the stock market instead if I didn't break those dollars up into three different organizations, but kept them for one organization, I would take a dollar at negative 100%, a dollar at two and a dollar at 6%. That would be $3 at a negative 31% return. And that's the return we need to do the deep impact work to solve our wealth gap and help build community wealth, then grow wages in this country while kind of healing our environment at the same time. And so I think of myself as basically, if money is like the river is flowing, as my ecology background would say, I'm helping that flow from getting stuck and keep flowing.
Stephanie Gripne (05:15):
So I learned that there was full spectrum capital learning, there needed to be nonprofit entities teaching this work that we're trying to get something from somebody, then that these people with money and organizations are really smart. But they're in T-ball. And right now, when we ask them to write a $250,000 check to invest in affordable housing in Kansas City, they've never written a check like that before. That's like asking you and me to go and start swinging as a Kansas City Royal in the batter’s box at a 95-mile-an-hour fastball without ever having gone through T-ball. So we realized there was a deeper T-ball that's learning by doing this full spectrum capital and that the teaching should be non-conflicted. When I had those three ahas, I remember the sinking feeling and I thought, wait a minute, every entrepreneurship center in the United States, every university needs one of these, this curriculum, otherwise you're just building one side of the marketplace and then you'd take a step back.
Stephanie Gripne (06:17):
And you're like, wait, every university needs these classes and curriculum, and this mindset shift to save themselves. And then you take a step back and you realize individual money is organized and YPO loans and community foundations, and there's all these associations of money. And you realize everybody needs this curriculum, but at the time there were only 15 centers in financial innovation and impact investing. And that's when I realized, okay, let's create a nonprofit, which really starts off as a multi-university academic center. So we'll create a community asset of classes, online, in-person, one-on-one small group learning, and partner with universities and other associations of money. So we could bring that education to them.
Lauren Hong (07:02):
Very good. Is that related at all? So I noticed you have a number of clubs as a part of Impact Financial Center. Is there a little bit of a direct relation to that work or is that separate?
Stephanie Gripne (07:13):
Yeah, absolutely. So in Colorado, we built what we call our first marketplace impact from 2016 to 2018. And this was, I'll be honest, a midlife crisis project. A big foundation and university had come into Colorado because we had two billionaires locally who wanted to invest and they told us we didn't have shovel-ready projects. We didn't have impact investments, projects, non-profits, small businesses, startups, and funds that were investor ready, and they call that a capital absorption problem. And I had done a couple hundred deals at this point and I thought they wouldn't know a deal if it's right next to them and then pulled a chair and sat next to them. And so I convinced my team and 34 people to form a steering committee. And we came up with a three-year goal to catalyze $100 million locally and good things happened. There were projects. We ended up with non-profits, small businesses, startups, funds, and co-ops; it got a little out of control as a community project. We did 200 education events in person.
Lauren Hong (08:23):
Holy smokes. Wow.
Stephanie Gripne (08:24):
After 70 of them, we would rent out a big hotel. I literally almost went personally bankrupt cause I'd put all this stuff on my credit card. And then we would do a three-day education event, which we called Colorado Impact Days. And we would literally set up 60 to 100 investment opportunities like a farmer's market. And we activated about 85 investors over three years. We brought existing investors to the table and we would just introduce amazing people raising capital and having money to invest to one another. And after three years, we lost count. It's probably $300 to $500 million of capital. We proved that more money flows if you focus on activating investors and creating the farmer's market. And after that, several of our amazing non-profit lenders and CDFIs, which are community financial development institutions in Colorado, they were like, wait, you're done with the pilot after three years?
Stephanie Gripne (09:30):
I was like, yes, we're done with the pilot after three years. And then I'd still have to raise this money. And we're like, we're not an investment bank. That's not what we do. But we realized we could take a bodega out of the marketplace and have the CDFI advise and non-profit lenders, which we call our main street lenders, create investor clubs that were supposed to be in- person. And then the pandemic hit. So we kind of went from an in-person farmer's market at a hotel to a Sears Roebuck catalog online. And so the investor clubs are essentially bodegas of a larger subset and we ended up having the federal government call us supplementation membership organizations. When the pandemic hit, we got calls asking if you can help us raise capital.
Stephanie Gripne (10:15):
And so if a governor calls me and says, what's the one thing I can do to get money flowing, most people think the answer is to start a fund. And we're like, nope, first thing create a marketplace, but a small one, a bodega or a big one, impact days. If you can only do two things, Kansas and Colorado have 100,000 to 200,000 millionaires, you need to go identify them, educate them and activate them to invest in Kansas and Colorado. Because 1% of wealth in Colorado is $5 billion. If we could teach people in Kansas and teach people in Colorado to invest in Kansas and Colorado, we have plenty of money. And then the third thing is only when those investors are so happy with the abundant joy of seeing the marketplace, they're like, wait, there's so many good things to invest in. Then you build a fund and a rapport out of investor demand, not out of a hope and wish that we had that investment capital.
Lauren Hong (11:16):
Do you mind just speaking a little bit more about investing specifically back in states? You know, Colorado or Kansas, what's the thinking behind that?
Stephanie Gripne (11:28):
Great question. I am still a geeky academic at heart. And so in sociology, we break the world into a community of places. And so there’s a geography, a community of interest and a community of identity and interests could be regenerative agriculture, sustainable forestry identity could be women, people of color indigenous as example. I think what's also interesting in what we learned and I'm a recovering economist also in my earlier days, is that if you would have given me a list and right now a list of a thousand people who could be the first impact investors in the state of Kansas or in Colorado, I would have gotten an F minus on that test, because the first 155 people who've stepped up to invest in Colorado in different communities of interest were not the people I would've thought would stood up and raise their hand.
Stephanie Gripne (12:32):
So I learned I couldn't predict who the early adopters were. And then when somebody calls me with 10 million, a hundred million, a billion dollars and says, Stephanie, can you educate us on impact investing? I also have a difficult time predicting where they want to start because we have over close to a hundred tools across your governance, your philanthropy, your direct investing, or your public investments. And so I have to ask them back. What are you thinking when you say impact investing? Are you talking about evaluating your investment advisor and upgrading your governance and doing investment beliefs and evidence-based decision, education evaluation? Are you talking about your public markets and impact with ESG? Are you talking about direct investing in Kansas or actually trying to make your philanthropy more efficient? And so what we realized when we were in Colorado is we didn't have a bench, a deep bench in any community of interest, place or identity.
Stephanie Gripne (13:34):
And so a lot of people suggested Stephanie, just pick the environment or just pick early childhood to start the marketplace; don't be so big. And I said, the problem is, let's say Lauren, you had this awesome tech startup to help out women and children. The thing is in Colorado, two or three of your investors might invest in you because you're a woman-led startup. Because you're a technology startup, two or three of my investors might be interested. You could say you're supporting children. We didn't have 20 deep in any one of those. And so we needed to kind of build the big tent to find what people said they were at before they showed up at the hotel and said, oh yeah, I want to do women in social justice. And then they get excited about those opportunities when they're there.
Stephanie Gripne (14:21):
And so, it's interesting that I oftentimes get asked questions from social ventures about what the investors are looking for, as if it's dark chocolate or milk chocolate. And I have to remind them that you yourself are this incredible unique piece of chocolate and a box of chocolates. You're the caramel nugget, dark chocolate salted one, and your friend doing something similar as the cherry chocolate, but guess what, the investors are the same way. And so the best thing for all of us in Colorado, Kansas, around the country to do is really get clear on what type of chocolate we are in that box of chocolates and communicate that out to the world. So the social venture chocolates can find the investor chocolates and vice versa.
Lauren Hong (15:04):
Yep. That makes a lot of sense, aligning purpose and all of that. So I'd love to hear a little bit more, because you're doing so much in this space. And you've been able to really move the needle in different ways. What do you feel like is something that you're doing, that you've already done and you're in the process of doing, that you feel is perhaps disrupting the industry or is kind of challenging, maybe the status quo, how things have been done in the past.
Stephanie Gripne (15:32):
That's a great question. There's a new service tool. We're rolling it out right now. We referred to it as a philanthropic opportunity scan and we piloted this three or four times, but we just did the first one with the Gilson Family Foundation. And I'm excited about this because one of the more difficult conversions we have to get people excited about investing is donors. And people get confused about us a little bit. If you're an investor, you're thinking, oh, they're helping donors become impact investors, but we didn't do just as much work with investors to make them impactful. You know, it's having you look at both sides of the equation, but the cool part about the philanthropic opportunity scan is that the math and the money can sometimes get overwhelming to people and confusing. And so in this case, we're really talking about making your philanthropy more efficient from a source and use analysis.
Stephanie Gripne (16:29):
So you can say, Hey, program officer, Hey donor. Just tell us what you love and what you give to. And they might say something like partial scholarships, school facilities, economic development, and hospices, then you say, okay, you're giving that young, amazing person an $8,000 scholarship, which is awesome out of your negative 100% money. When they have a $70,000 student loan at 10% interest, you know, you've had a tax incentive since 1969 to give that student a $78,000 student loan at 1% out of your donor advised fund or foundation, you'll get 101% return plus a tax deduction. And you'll save that student more than the $8,000 you're giving them. And I think 50 to 100 percent of our philanthropy could be restructured to make the nonprofit better off. And the foundation learning about leaving the donor better off is a really rich learning opportunity to onboard a whole cohort of people that might say, oh, I don't do that. I'm a donor, they're investors. And so we're super excited about that new tool that's coming out.
Lauren Hong (17:38):
And what's the timeline on that, that project?
Stephanie Gripne (17:41):
It's live and going well. We just did our first one yesterday. And so it's a simple process and we're a nonprofit, so we make all of our tools and structures available to everyone.
Lauren Hong (17:56):
Congratulations. That's very exciting. It's exciting to hear about, too. And then, what makes you the proudest to be able to work in this space and to do the work that you do?
Stephanie Gripne (18:07):
Oh, that's a great question. We do our work. We spend 85% of our time teaching those with resources how to invest in the product, people leading projects, non-profits, small businesses, startups, and funds to save the world. And so the most heartbreaking thing I do is we hear from 50 to 100 of those people a month and saying, can you help us raise money? And we say, oh, we, we have a pro bono two hours a month and we'll help you as much as we can, but how we help you is by training and activating the money to do this. And so that's a long-term play. And there are a select group of amazing leaders all over the country, such as Anasa Troutman in Memphis, or Ricardo Rocha in Denver, Colorado, or Christina Hollenback with the Justice Capital Initiative.
Stephanie Gripne (19:03):
And these are just extraordinary human beings. Anasa, for example, she wrote a musical for Martin Luther King's 50th anniversary, and then local community members asked her if she would stay and actually find a way through some miracle to purchase the store at Clayborn temple and continue Martin Luther King's vision and dream of doing community wealth building. So when you get to support somebody like Anasa and kind of continue the arc of history in that way and her story in that way, it's pretty extraordinary. You can, when you're in Memphis, among civil rights leaders, and leaders in the religious community and the creative community, and you just, I'm getting chills right now. And I think about it, it's just you're doing your part to help weave together a new path for history.
Lauren Hong (20:04):
Yeah, that is so powerful. And I love to be able to hear it from you firsthand as well. So, you can tell you're passionate about it and, just hearing the narrative, not only of the work that you've done, but how all your background, you know, all blends together as well. So, with that, teaching and being a part of so many projects, what do you do to just stay sharp, to be able to stay relevant with everything going on?
Stephanie Gripne (20:30):
This is interesting. The pandemic was really good for me. I used to live on a plane and the pandemic forced us to be still. And for me, I'm starting to write three books, I'm teaching myself to play piano. I'm doing a lot of road biking and cycling and doing a race this weekend. I love partner dancing. That was the heartbreak for me during the pandemic, not being able to partner dance, but I've been able to go a couple of times as the pandemic got better. I think getting out of my mind and getting in nature and moving my body are key to staying sharp. And I should also give incredible kudos to the others in our space that are system entrepreneurs, that could be raising a billion dollar fund and making a lot of money. And we're choosing to fix the system. And whether that's Todd James of Full Spectrum Capital Partners or Lindy Limbus that realize impact and pledge and investor flow. And I count myself as extremely fortunate to be able to work with some of the best minds of our time that are working to fix the system.
Lauren Hong (21:47):
That's wonderful. And you didn’t answer my question about the dance piece. Where did that fit in?
Stephanie Gripne (21:57):
It's funny because it wasn't until I took a CEO test, the Birkman, and I actually went to school for science for 12 years for my undergrad and graduate degree. And in the Birkman, science was one of the lowest scoring aptitudes I had, tied for first was persuasion and tied for second was music and service. And I didn't really identify as being musical. I was the scholar athlete jock, and in high school and college, I kept at three sports and I joke that I didn't even know where the trials were for drama or theater or anything else like that. And, after taking that test, I was like, I do love these. And I started writing songs and I'm a white girl with no rhythm and it didn't matter. I just love partner dancing so much that I started doing it, three to four nights a week and getting good at it. And it remains my great passion. And I do love giving talks on stage, which is a lot like acting and drama. So I've been very fortunate in my 40s to discover something that was, I think, always in me, but I didn't realize.
Lauren Hong (23:13):
I agree it's so important, as you mentioned earlier, to be able to free your mind and move your body, to be able to have that white space, to think creatively and do your best work. So I'm glad you've been able to slip it in a little bit more now that things are, hopefully, continuing on the upward swing. So, is there anything else you'd like to share?
Stephanie Gripne (23:37):
What I will share is this. We teach a lot of couples and brothers and sisters and families, with a lot of resources right now. And I love this analogy. I have a couple that loves backcountry skiing. And, the fact is, if you have resources and you care about making the world a better place, it is now possible to align your money. It's painful. I won't lie. It's like going on a backcountry ski slope, but it is now possible to do it. And so if your investment advisor says, you can't do it, or somebody says, oh, it's this, or this, or this, you need to find somebody else. And if you're open to going on that adventure, as I told this couple I work with, I'm your backend, your speed guide.
Stephanie Gripne (24:27):
And, I'm not sure how we're going to get to the bottom of the mountain, but we've been to the bottom of a mountain a few times, and we're pretty sure we can get there. And so those people who are willing to be bold and take those steps and do it, I know it's difficult. I just suggested out of a large bank this year and have my money in alignment myself. And it's a lot of work. It took me a year and it's completely worth it. It's what will change and heal our communities and our environment and the way that we all want to live.
Lauren Hong (25:02):
Thank you so much for sharing and also appreciate you sharing your narrative and how you got to where you are today. It's very inspirational and I'm rolling back to the website and if there's any other resources, I’m happy to print those out as well,
Stephanie Gripne (25:16):
I'll share a couple with you and thank you so much, Lauren, for doing what you do and taking the time to interview people.
Lauren Hong (25:22):
Absolutely. And best of luck with the book projects. I look forward to hearing more about those. I know that will feel good, I'm sure. Once you're able to get those out and check that box off.
Stephanie Gripne (25:34):
Yeah. I don't think I've ever said that publicly on a recording. So it is really nice to have the accountability of doing it. And so for those of you who've written those books, you know it's a journey.
Lauren Hong (25:46):
Absolutely. Now it takes a village. Right. So, well again, thank you. I appreciate your time. And we'll link those resources below.
Stephanie Gripne (25:56):
Thank you, Lauren. Have a wonderful day.
