Courageous Capital Stewards – Doug Spencer

Courageous Capital Stewards
Courageous Capital Stewards
Courageous Capital Stewards - Doug Spencer



Dr. Steph

Hello and welcome to the Courageous Capital Steward’s Podcast. I’m your host, Dr. Stephanie Gripney as founder and leader of Impact Finance Center. I’m thrilled to bring you insights and stories from the forefront of financial innovation and impact investing. Our podcast is dedicated to those bold and visionary individuals and organizations who are actively transforming the way we think about and manage capital for the greater good.


Each episode will dive into the strategies, challenges and successes of stewarding capital courageously. Whether you’re an investor, entrepreneur, philanthropist, or just curious about the world of impact finance, you’re in the right place. So let’s get started and explore the exciting world of courageous capital stewardship together. My name is Dr. Stephanie Gurney and this is episode two for 2014.


Today, we’re honored to have Doug Spencer, impact investor, friend, colleague and amazing actor, both in the state of Colorado and nationally. And we’re super excited to have him here because his journey is one where I think a lot of people can connect to and he has a way about him that makes impact investing very accessible from my perspective.


So we’re excited to have you here today, Doug. 


Doug Spencer

No, thank you, Stephanie. Flattered with that introduction.


Dr. Steph

We have lots of connections. I don’t know if you know this. My family goes back five generations. Minnesota in four generations. 


Dough Spencer

I did not know that. 


Dr. Steph

Yeah, we had the Minnesota Colorado thing. And I don’t think you and I’ve ever even explained that a little bit.


But a lot of what I’ve created at Impact Finance Center, we’ve created an Impact Finance Center has been inspired by and sometimes in response to some of the great innovations in Minnesota. So I’m excited to dive into that with you a little bit. So why don’t you tell us a little bit about yourself. Where did you grow up and how did you find yourself today?


Dough Spencer

Well, I’ll try and be as brief and succinct as possible. I grew up in Minnesota. My parents were actually from Chicago, but my dad moved there for business back in the 1950s. And that’s where they raised their family. I was, I guess, a child of that, to be brutally honest, a child of wealth and privilege.


And I went to private schools for most of my life. I went to a boarding school in Arizona, college in Oregon. And but throughout all that, my parents’ real influence on my life in terms of where I am today was my mom. She was always deeply involved in our local community school boards, health and hospitals, museums and boards, stuffing envelopes, doing all that sort of all the levels of work that a volunteer does for an organization.


So me and my siblings, we all grew up firsthand sort of seeing the sort of joy and the fun that my mom got out of being engaged in her local community. And that really has rubbed off on me over the course of my life. Graduate from college in Oregon, chased a woman to Colorado who became my wife of now 44 years.


And this is where we’ve made our home. I started out my first real job, actually, in Colorado was selling advertising for a little Spanish language newspaper in Denver called Lovers. You may not remember it, and it went out of business some years ago. There were two salesmen, Antonio and I and Antonio had north Denver, north of Broad or north of Colfax and everything south of Colfax.


So that was my sales territory. I learned Denver really fast in that job. But then I also got me very close to the Latino community in Denver. I happened to be fluent in Spanish. And so I put that to good use early in my career, getting to know Denver and the Latino community. And then I went to work for United Way as a fundraiser.


And that really was the beginning of my real nonprofit and fundraising career. I worked for United Way for 11 years, ended up as the development director running the citywide campaign, left in 93. Ran a manufacturing business in rural Montana for nine years. 


Dr. Steph

Where in rural Montana?


Doug Spencer

Stevensville Little Well south of Missoula.


Dr. Steph

And when were you there?


Doug Spencer

1989 to now. I started the company in 89 with a partner. I went full time in 93, sold the business in 98. 


Dr. Steph

Wow. Gorgeous country. Gorgeous country.


Doug Spencer

Gorgeous country. And then I went back into the nonprofit world as a fundraiser for Friendship Bridge, which at the time was an evergreen based microfinance institution. Very, very small. And I took a like the joking way.I say this to my wife and kids. I took a 90% pay cut to go work for a little mom and pop nonprofit, and so I worked in microfinance for a number of years for Friendship Bridge. ended up as the executive director left there, went to work for Water for People, a global water sanitation business. I’m getting to the conclusion here.


Dr. Steph

Yeah, it’s I mean I mean, I learned a lot and I know you this has been really fascinating.


Doug Spencer

And water for people. Well, both Friendship Bridge and Water for people gave me a very global perspective and sort of a little story which describes sort of why I’m where I’m at today is I did a study abroad in high school, my junior year in high school, spent a semester living with a family in Mexico, central Mexico.


And the woman was that my mother was head of the household in every respect. I mean, she ran a weaving business. She had two women who came and worked looms at her house. Her husband was kind of a drunk who managed a little mule pass plot up in the hills. He’d go up every day and do his thing and then come back into town and sell his proceeds.


And my brother Juan and I would have to go down to the bar and bring his sorry ass home for dinner every night. Because Karmen, my mom, was, you know, she ran the show. And I learned there at an early age, I didn’t know it at the time, but the real power and influence and integrity that women have and how hard they work every day to ensure that their families in their communities are healthy and strong and vibrant. And so a lot of my impact investing focus since then. I mean, microfinance was small loans for women throughout the world. Water sanitation work that I was doing was mostly figuring out innovative and low tech ways to alleviate the burden of women having to fetch water every day. And so long story short, my mom died in 2012. And as we were taking care of her, I had a conversation with her one day about, you know, what I ought to do with the rest of my life.


And she said, Do something good and do something that makes you happy. And so it was really then that I, on some reflection, decided that I was going to go whole hog into impact investing writ large. And the way it started was really when I started I had a public equity portfolio that I had built up over the years, and I had inherited a pot of money from my mom.

And so I took a look at all that and I said, Well, you know, what’s it doing? So I first started by educating myself, you know, I had all the stuff I didn’t know much about. I mean, I knew about it, but not really. So I was sort of early thinking hard about ESG and how to make my investment portfolio something I could take some pride in, in addition to, you know, making money.


So the first thing I did was I divested all of my oil and gas and put that into a donor advised fund at impact assets. I went to a SO cap event in 2013, and that was kind of a seminal thing for me because it gave me exposure to a lot broader range of opportunities, a range of people who were doing really cool stuff in a lot of different ways.


I went to Unreasonable Institute for three or four years when I was running out of Boulder.


Dr. Steph

I was a professor when they were undergrads way back when. 


Doug Spencer

Yeah. Oh, yeah? 


Dr. Steph

Yeah, I was. I was a professor at Leeds School of Business 2010 to 12 and. Actually, I’m going to want you to continue, and I want to backtrack just a teeny bit because what you said was so profound.


I have two questions for you. One, what town in Mexico were you in? The second question I’m going to ask you is, I mean, how lucky for you to have that experience like your life could’ve turned out in such a different way. And I think people that are deeply committed to climate are oftentimes really surprised when they follow the work of Project Drawdown, which is deeply inspiring if people haven’t looked at it and it says we have all the solutions to solve climate change, we just have to scale them.


And if you look at I believe it’s the number four solution and the number six solution, it’s education, educating women and girls, and it’s access to health care and reproductive choice for women and girls. And most people that are deeply committed to climate don’t realize, like the answer is invest in women and girls. 


Doug Spencer

Right I mean, it’s certainly a huge part of it.

Yeah. I mean, we have to have strong communities, therefore, at a community level, we can solve some of these bigger problems for women. That’s what women are about building community. 


Dr. Steph

And you said it when you were talking about your mom, both moms. You know, the there’s a real discussion right now of half of the country isn’t even voting and it’s it’s open it’s it’s that volunteer work you do to stuff those envelopes to sign up people to vote, all of those little things that that social that really tough to measure volunteerism, social capital that stuff of that. So it’s super interesting that you got to experience that multicultural early from June strong humans in that way and in a beautiful way so where were you in Mexico? 


Doug Spencer


I was in a little town on the other side of Lake Pátzcuaro called Erongarícuaro in Morelia province in central Mexico.


Dr. Steph

And did you speak fluent Spanish before you went down there? 


Doug Spencer

No, no, I had studied it in school, but I became nobody in the household spoke a lick of English. And so I. I learned fast. 


Dr. Steph

Wow, that’s amazing. So am I. My second question on your journey is there’s a lot of people who look at their portfolio and go, wait, what am I invested in?


Why does that matter? But very few people actually took action the way you did. And I’m imagining I don’t know the answer, but you probably had capital gains issues.


Doug Spencer

Absolutely. Yes. Right. 


Dr. Steph

And so a lot of people will be like, well, I can’t do impact investing because I’m stuck in these stocks. Can you walk me through how you mentally worked through that hurdle?


Doug Spencer

Well, I knew that I wanted to go all in, and as part of that thought process, I really looked hard with my wife at Kathleen at and our lifestyle and sort of came to a decision personally about how much is enough, you know, in terms of what do we need to live the life we want to live and let’s be happy with that.


And that sort of opened the door pretty wide for how to think about the rest, how to allocate resources towards the things we wanted to do. So basically, I have five buckets. It’s my life bucket, you know, when I need a new laptop, I get a bit I want to be able to buy a new laptop or pay the bills, whatever.


There’s a philanthropic bucket and we have an allocation typically of one and a half to 2% of our net worth annually. It’s a fixed number and sometimes that’s big, sometimes it’s not. I have a concessionary bucket which is, you know, interest free loans book way below market rate investments. As an example, I am an investment with the CDFI on the Northern Cheyenne Reservation in Montana.


That’s an interest only for two years. And then 2%, you know, principal and interest over five years kind of thing, financing the CDFIs loan portfolio. Then I have a market rate bucket and then I have a venture bucket. And the venture bucket is I mean, I call it a venture bucket. And of course I have, you know, return expectations, but it’s really 100% risk capital, you know, So that’s sort of how I thought.


And then on that market piece, which is sort of more to your question about the public equity stuff, I just I’ve discovered Sustainalytics, which was kind of an early analytics tool, and then Morningstar started picking up, you know, more information and their different tools out there. And I basically had to do it myself, learn by doing because the money manager I had at the time had no clue about or didn’t care, you know. 


Dr. Steph

Or wasn’t incentivized.


Doug Spencer

Right, Right, right, Exactly. So it took me five years, seven years to find a manager that I could work with who understood me and what I was trying to do with both my alternative investments and my public market investments. 


Dr. Steph

There’s so many interesting pieces that I want to dive into here because, one, there’s an impact investing leader named Kathleen McQuillan, and she’s famous for what’s your number?


And I, I really think there’s a movement called Death over Dinner. And I want to create money over dinner. And a big part of money over dinner is you get 12 friends together and instead of talking about dying in a structured way and kind of reviewing some videos and materials together, we have this conversation about money.


And I think a big part of what we do is we all live with not all, but most of us have this fear that we don’t have enough and we haven’t actually sat down to go. What is enough? And it gets even more interesting if you take you and your family and combine another family like the amount you need goes down as you have mutual aid with each other and it goes up as if you go at it alone.


And I think that insight, you had to be like, hey, what what’s it is, is the first piece that allows you to have courage with more of those resources and go, Why am I not tackling this? 


Doug Spencer

So culturally, culturally, we are trained to chase this thing out there called money and quote unquote, success. And, you know, it’s just it’s a silly measure of anything.


Dr. Steph

It is. And the second thing, I think the kind of I don’t know if you’ve seen it, but Investor Circle has an RFP out right now to kind of revamp itself. And I’ve been thinking a lot about, you know, how we work really upstream, like we identify, educate and activate individuals or organizations to become an impact investor.


We help them with their first three steps, but it’s not lost on me that unless you can go into a tonic or a tiger 21 most of the other investor groups are really almost created by asset classes which aren’t to the benefit of the investor. And in reality, we need to have, you know, Main Street investor groups essentially and that crossover all of the asset classes, even the public markets and shareholder activism also do real estate and all those things a little bit more how Seattle Impact Investing Group is kind of morphed into and so you could see having these dinners of money over dinner and then you end up having a Main Street investor group which are more people with their friends going on, friends and family going on this journey together to have these, these conversations. And then Ken Tsunoda is a dear friend and colleague from TechSoup, and he’s he’s in his third act right now and he’s gotten 12 families and they formed a LLC and some are accredited and some are non-accredited and they’re kind of going at it in the same way that you’re you’re going at it with those five buckets.


But it’s amazing that you said that you did that you went there and then you’re on this journey, right, as you said. So cap was important. What have been the other organizations that have helped you kind of find others like yourself, find deal flow? Like how do you think it’s a journey? It’s hard right now.


I think of it like a backcountry ski slope of like you got to go down and it’s kind of a meandering different journey for each person and doing and, and then addressing the fact that most investment advisors are not trained nor compensated, nor have an out to help you figure this out. 


Doug Spencer

Right. Right. Well, I mean, I think that in the case of public markets, you can actually if that’s your only focus, I think you can do really you can you can be a lot more virtuous with your public market investing and you may think is possible.


I mean, there are more and more products out there all the time. Right. So back to your question. I mean, it took me a long time to find my tribe, in effect. I mean, I was part of Investors Circle very early on at Unreasonable Institute, I met a ton of people. SOCAP, I went twice. The second time I met the class owners and they sort of roped me into Tonic for a couple of years.


And I went to a meeting in Boston and I found Tonic to be not my cup of tea at that time. Anyway it was a lot of and I don’t want to sound trite, but it seemed more about navel gazing than it was about actually investing and doing, you know. And I wanted to move money. So then I was interviewed by Barron’s magazine.


A while in 2016. I don’t know what it was, but anyway, Eric Jacobson, the founder of Gratitude Railroad, read the article and just cold called me. That’s awesome. And we talked for a long time because he was interested in sort of this whole public market. How do you know, you build a portfolio that makes sense and one thing led to another and a year later I joined Gratitude Railroad.


I think I was, you know, one of the early ones. And the whole focus is around moving money into impact, but more specifically building products and investment products in the investment impact investing marketplace that don’t currently exist, that could be accessible to retail investors or other investors, you know, who want to get into different kinds of things.


For instance, we had a long, short impact hedge fund called Analyst Partners and we Inclusive Capital Fund, which is a venture fund that funds women, first time women managers or even individual deals directly like Recompose, which is a really fascinating business. The woman CEO out of founder out of North Carolina. Well based in Seattle she was a professor at North Carolina UMC and yeah it’s based in Seattle but she’s figured out a technology for composting human remains.

And that’s a really cool kind of business that relies on zero carbon. 


Dr. Steph

Yeah. Katrina is great. So how many people do you think are involved with the Gratitude Railroad right now and what size of an investor do you need to be to participate there? Because the last time I attended was pre-pandemic, so it’s been a few years.


Doug Spencer

Yeah, we have about 100 individual investors and family offices and foundations that are participating at different levels in investing. But it’s all about investing. I mean, I’m a partner and as a partner I help underwrite the operation. You know, it’s designed as a for profit business, but I can’t suggest that it’s making any money yet. But when I first started, it simply came to a couple of meetings.

Let’s start looking at some deals. I think I’d invested about a quarter million bucks before they actually approached me and said, you know, you should just be a partner and then you get access to everything and it can be part of the family. And so I did. And so they have an annual conference there. As I said, about 100 people involved and either directly or indirectly, I think we’d have something in the range of four or 4 to 500 million in impact, not just from these people, but we get excited about a deal and we go out to our network and we, you know, we help try and raise money into these direct or fund type investments. 


Dr. Steph

That’s amazing. A couple of things around that. Emerging managers, I’m not sure I’ve said this on a podcast, so I’m going to say this too, so the audience can hear it. But pre-pandemic I was. I don’t know if you knew the late Bruce Byington at the Colorado Health Foundation. He was amazing. And the chief investment officer was Stan Willie.


And we had breakfast at Racine’s, which is no longer there. And I said essentially, Boss, you’re going to watch me have a conversation with the chief investment officer so we can understand why it’s so difficult when you have $3.2 billion. Why and are led by a woman of color. Why is it so difficult to invest in emerging diverse managers?


And the first piece of the equation was at that moment, they switched plans, but back then they outsourced to Towers Watson and their emerging manager database that Towers Watson started at $500 million. So if you’re a woman, a person of color raising a fund. Yeah. I mean, if you’ve, like, had a miracle happen, you know, be financially self-sustaining, that $35 – $80 million on your first fund.


Second fund, maybe when 5200, if you’re triply lucky on your third fund, you get to 500. You know, just like it. And so Stan said, you know, the Kresge Foundation has 13 teammates and we only have two. And boss Bruce said, You mean on the program team? He’s like, No, on the investment team. So at that moment, like, it was clear, like they hadn’t had that conversation yet.


If you actually want the investment team to invest with deep impact, you have to stack them up to make it possible. And then he said, you know, they’re at higher risk, not because they’re diverse, but because they’re emerging. And Bruce says, we give them grants. And, you know, so the chief investment officer wasn’t thinking about or asking, Give me grants, and the boss wasn’t offering.


And then he said, you know, who’s going to do the due diligence? Two of us have to allocate $3.2 billion. Typically, our minimum check size is 25 million. We can’t be more than three, you know, 3 to 5% of the investment opportunity, which puts it at like 250 million. And so we came up with a concept which we’re rolling out this year and it seems like a lot of what gratitude is serving is a shared due diligence model.


And most people don’t realize that a lot of foundations don’t like to share due diligence, But there’s people like yourself, people like all the members of Gratitude Railroad who are like that. We want to get that money into first time fund managers, absolutely diverse, underrepresented. And in order to do it, we have to carve off. And so we have funding from the Margaret Casey Foundation to to basically stand up a share due diligence membership model, which is cool and say, hey, let’s split the cost.


You co-owner you won’t have the non Reliance letter and make a multimillion dollar multi-year commitment to say let’s do 5 million in five years to emerging diverse right but it seems like that a lot of been yeah but you’ve been leaning into. 


Doug Spencer

I mean you have to plan for it but I also I mean as I was listening to you, Steph, what’s something that really has struck us at Gratitude Railroad when we were looking at diverse managers and how difficult it is for women and people of color to raise money for funds.


I mean, the reality is that white folks have all the money. So the only way things are going to happen is if white folks start investing their money. You know, I mean, that’s a very crass way to sort of be very true. We look at all the data. You know, I’m a 67 year old white guy, and I decided a long time ago that, you know, I’m not taking it to my grave. So I might as well, you know, see if I can make the world a better place. 


Dr. Steph

That’s where, you know. Yeah, it’s absolutely amazing. I think the other issue is when we go and where to get to housing in a minute, but before we get to housing, is that most people when you say, we need money for this to solve a problem, they’ll say, let’s raise a fund.


And when people come to me and say we need more money to solve a housing crisis in Colorado, my intuition is we don’t need a fund first. What we need is to grow an investor database that we don’t have. We need 5000 investors. We have to go identify them, educate them, activate them. People like that. When I go on a journey like you did so that we have investors and then the question is, what’s the next best form for that to take?


And we are so lucky in Colorado to have Katrina an impact fund, which is like Joan Doug, I don’t know if you’re familiar with Katara or not. You know, I like to think of it as he’s created a401k IRA for Main Street, like that’s a great street. Yeah. And it’s 60% real assets and 40% businesses accredited non-accredited investors can invest. Blake started Namaste solar and yeah and clean energy credit union and so I love that piece and then and the one I want you to walk me through is the other piece I love.


I’m like, wait a minute. If you take Kashua, if you aggregate capital at scale and you take Kashua and MCE and have a baby, you could be raising five to basically have the state of Colorado have a self-directed IRA. You could have a self-directed CD, which is a community note and then a private guarantee program. And so you have actually invested and seen social capital.


And most people I know feel like it’s a super super secret, amazing tool that nobody really knows about. Do you want to talk about MCE and how you found it and your experience with it? 


Doug Spencer

Yeah, well, having a background in global microfinance through Friendship Bridge, I knew about MCE from a distance and then I met a couple of guarantors.


I went to a meeting here in Denver, heard about it, looked at it, and I thought, Wow, what a cool idea. I mean, I have a strong balance sheet and I’m not actually, why don’t I look at this guarantee model? I knew enough about microfinance to know what I was looking at. You know, I mean, we were at that time we were lending to 40 or 50 microfinance institutions around the world pretty quickly, and got on the credit committee.


So I was doing all the due diligence. And so I had confidence and comfort that we were making lending decisions. I mean, MCE’s model was to provide low cost capital to in a competitive marketplace, low cost capital to MFIs, and then support themselves on the spread between what they could borrow at at a U.S. bank and put it out there.


So they were, you know, borrowing it at 2% back down and putting money out at seven or 8% kind of idea to microfinance institutions. And so it didn’t cost me anything. Right. I mean, that’s sort of appealing to my balance sheet at the end of the year. 


Dr. Steph

And you didn’t have to sell anything, right? 


Doug Spencer

Right, right. No, I just gave them a copy of my stock portfolio and they said, fine, you know, get a credit check and and and then the unique model is MCE is a non profit.


So we had 75 or 80, maybe 100. Now guarantors each putting up $1,000,000 and then the bank would lend 50% against that. So we had a $50 million loan fund in effect with a million with a $100 million guarantee behind it. It’s a no-brainer for a bank. And then what happens is that any losses, you know, you’re funding 50 or 100 businesses, you’re going to run into trouble once in a while.


And credit losses were spread, amortized out across all 100 guarantors as a charitable gift at the end of the year. So I’d get a pro-rata share of, you know, some years I didn’t write any checks. Other years I would write a $5-7,000, you know, whatever the call was kind of thing. So it has ten years of being a guarantor.


I think my net cost was zero in effect, but I made, I don’t know, 25 or $30,000 worth of philanthropic contributions to a great organization. 


Dr. Steph

And, you know, it’s great. They’re actually up two they’re up 246 years in terms and the average time a guarantor has stayed in historically is eight years. And people are shocked that there was no return on the guarantors.


And so that’s my dream for actually solving the housing crisis as it is. And I want you to talk about the work you’re involved with the native CDFI too, but what’s really clear to me is affordable housing and workforce housing. Real estate developers, native women, led CDFIs they are exceptional at producing the transactions or originating servicing the deals.


But raising money is a whole other business. And I love the MCE model of like let’s raise money at scale. And I also like the investment cooperative model of like what returns do we really need if, if I can get an S&P 500 return and invest in Main Street and if there’s even a customer insurance product that attributes it to the marketplace, S&P 500 and maybe if you make less than 250,000, you get an extra liquidity option from that. Like, why wouldn’t you invest in your own community on Main Street? So I love those two things coming together. 


So just re-clarify. It’s MC Social capital. They have both a community note program and a private guarantee program and they essentially create a revolving loan fund and we call it the democratized aggregation of capital.


Right. And you have something where Wall Street isn’t coming in and taking their 20% piece out of it. Right? Like, right. Pay the people Well, aggregate capital at scale use these unused balance sheets that aren’t using in a profound way. And so we’re actually talking with the Department of Interior in and rolling out this model at Indian Country, like giving grants to grow Main Street investors and in taking the MCE model domestically with the contour models.


I’d love to talk to you about something interesting in terms of some of the investments you love. I know you’re working a lot with some native women seed buyers. You want to tell us about that transaction? 


Doug Spencer

Sure. There’s a I originally came through the Gratitude Railroad. Actually, we got invited to a meeting in Red Lodge, Montana of the Mountains and Plains Regional CDFI Coalition, which is kind of a mouthful, but it was a group of nine CDFIs and a couple of other native organizations Montana, Wyoming, Colorado, North Dakota, all on reservation.


CDFIs. And they had been meeting for a couple of years just with the premise that if there’s power in numbers, if we work together, we can get some things done. And they got to the point where they were ready to invite in other people like me who are non-natives, but very interested in prospective investors. So the Gratitude Railroad didn’t take any formal role.


But out of that in Red Lodge, I became very good friends with the founder and her husband, who’s an Oglala-Sioux native. And then I supported the coalition and we ended up writing a grant to the EDA, Build Back Better grant to the EDA for $55 million. And over the course of writing that grant, we had been working and talking with a group of foundations and banks and individual investors who we had invited in or wanted to be part of and how to move this thing forward and part of that grant came with a 20% private sector matching requirement. And so Northwest Area Foundation jumped in, Bush Foundation jumped in, Wells Fargo jumped in. And this $55 million, pot of money from the government, 20 million of it is going into a loan fund, basically a revolving loan fund to support small business entrepreneurs on reservation growing, starting, you know, accelerating new businesses.


And as my commitment, my private sector commitment as part of that match was a $250,000 beginning balance for a loan fund for the North and the Northern Cheyenne Reservation and that CDFI is run by a woman, Sharon Small, who’s northern Cheyenne. And she and I just met at one of these meetings, started talking. One thing led to another, and then I made the investment.

Dr. Steph

That’s amazing. And your mom must be smiling down at you on this one. So I hope so. Yeah, I’m sure she is. Yeah, That’s amazing. I talked about that seed buys. I feel like our Main Street zero hero. Like these people are just unaware of how miraculous they are. And in some ways it’s microfinance in the United States and all of these seeds. 


Doug Spencer

And by the way, all of these CDFIs are run by Native women.


Dr. Steph

That’s amazing, amazing.


And we just made a Native woman investment into a film and we were trying to come up with an equitable equity investment. And we did this through our Women’s Foundation of Colorado Impact Investing Giving Circle. And so we, you know, the film didn’t want that. And we looked at the can and we had done a -50% loan with Walton Family Foundation.We’re like, what’s the equivalent of a -50% loan in equity? And so we kind of backed out. We’re like ten x less extractive, two and a half X is better, but still too extractive. And so we ended up landing on 1.25 x return on only profit. 


And so that’s how we’re going to structure this, this equitable kind of equity like investment into that piece of it.


But these leaders, anyone who critiques a CD balances all of the interest rates are too high. I say you should be taking the investors in this CDFI. I because the CDFIs are not out there getting rich doing this. Yeah they’re mostly nonprofits I mean you know they are so if you give them -10% money they’ll lend it out at negative two or zero right there.


They’re just passing their minimum cost of origination and servicing. What people also are unaware of is CDFIs were the highest performing asset class financially 2008 to 12 2022. So if you look at your portfolio holistically over time, microfinance in the U.S. is a really good bet. 


Doug Spencer

Well, you know, I think about it. You go back 150 years in this country, Stephanie, and in any town, you know, we’re going to be one or two banks.


And you knew the bankers. They came to your school, they came to your business, you knew them. Yet coffee with them, you know, they knew their community and they knew who they could trust. And and they made lending decisions on handshakes and, you know, a pencil kind of idea. And that’s what CDFIs are today in local communities. They’re the ones who are on the street.

They know their customers are visiting the businesses. You know, their kids are going to school together. You know, I mean, that’s the way I think about it. It’s almost I mean, it’s a lot more risk free than investing in, you know, Wells Fargo. 


Dr. Steph

I say people say, well, so I couldn’t agree with you more about your framing of that than people push back on me and say, this is so complicated.


I say, is it really 150 years ago? That’s how we did it. That’s right. And then they say, Why are you worried about losing money on Main Street? And I say, I lost money on Enron and Dirty Diesel, Volkswagen and Wells Fargo. So if you’re asking me on the whole, I’ve made money in both portfolios, I’ve lost some in both portfolios, but I rather lose to people I love versus some corporation I can’t look in the eye.


The answer is very clear about, you know, what we’re going to do with that. If we’re getting ready, one of the reasons we are excited to speak with you is we’re getting ready to explore whether or not you can take that MCE model and apply it domestically for housing. And so there’s a housing project up in Dillon, Colorado. And for the federal government and state governments, especially in ski resorts, workforce housing is becoming a critical issue.


It is the reason they can’t hire or retain people? And we are short, about 22 million. I think we’re down to $15 million, and that’s brutal given that the Forest Service is using a new farm bill Authority, they have basically put up free land. The county has come in with a long term patient investment over 15 years, the state and feds have given a grant and to still be short, that money is wild.


And so our dream is, can we do what we did with Colorado Impact Days and build a database of housing investors that want to show up and co-invest in housing solutions. And we’re super interested in it. I think I was shocked and surprised when we were at $22 million. It would take five $1 million guarantors or $5 million of guarantors if there are $250,000 every year for ten years, that would reduce the interest rate.


And I, I just love your story about how your balance sheet was sitting there and it was unused and you didn’t have to sell securities. 


So do you want to talk about why you’re even open to exploring like why it sounds like you’ve been doing a lot of seed buys businesses microfinancing? Why would you even consider looking at this project and housing?


Like why? Where does housing fit in your portfolio? 


Doug Spencer

Well, I, I honestly, Stephanie, it historically hasn’t fit in my portfolio beyond the house that I live in. So, you know, it’s about what I know about real estate, what I know about real estate. But then when I, when I started getting into impact investing, one of the early investments I made was in a fund called IAX investments.

I don’t know at the time I was out of California and one of their portfolio companies is a green housing business that was doing a sort of moderate income, not low income, but moderate income housing project in the Las Vegas area, primarily for nurses and firemen, you know, service people. So I got a little bit of exposure there. And then I became aware of Jonathan Rose out of Philadelphia and some of his work. And so, I mean, I have invested in a couple of funds. 


Dr. Steph

She was my Ford Foundation programing officer, way back when. 


Doug Spencer

Yeah. Is one that I’m currently in. So I know a little bit about it, but it’s interesting to me because I mean, I become more both on reservation, right?


I mean, part of this 55 million is going to go for some affordable housing projects in the country. And I mean, the need is desperate across the country. We even have it at a local level. A local restaurant here tried to buy a house to put up, you know, put 3 to 4 employees in a house.

It was going to be a rental market rate rental unit. But in order to do that, he had to go get a public hearing in the neighborhood around and you talk about not my backyard, the neighborhood around him said, no, you know, and just go for show anyway. 


Dr. Steph

It’s kind of a no, it’s a downer, a crisis.


You know, the Denver airport is short 500 employees. And I would guess housing is the root cause. Right. A lot of that. Right. Like the ability to have a place and live with integrity and have work. And it’s we’re actually rolling out a we were doing it with large corporations more like why are we doing this with ourselves?


So we’re rolling out, we call it Operation Oxygen Masks, that we’re refinancing our debt with all of our workers and contractors and creating a homeownership program that we piloted with myself, expanding out. And then the third piece is can we get everybody up to a thriving wage, even using income sharing agreements? And we love that simple, cool idea of refinancing debt, increasing wages, and getting people into homes.


Doug Spencer

Well, the thing that was interesting to me is, as you describe your project you’re working on now. Yeah. I mean, it really is a public private partnership, right? I mean, you have to be creative in figuring out how to put a capital stack together that makes sense, that isn’t burdensome, that meets the income threshold so that you actually can sustain it. Right. And it takes a lot of creativity and ingenuity to figure those things out. 


You know, when I heard about the Forest Service, I dried up because I’m actually involved in and I just helped raise $40 million for Yellowstone National Park for employee housing. Yeah. I mean, that’s their biggest issue.They cannot keep seasonal people in the park.


Dr. Steph

That’s it, you know? Yeah. 

They’re sleeping in their cars at 6000 feet. 


Doug Spencer

Yeah, It’s these sort of moth ridden 20, 50 year old, you know, RVs and stuff. So anyway, this particular project sounded interesting. It, it, it looks like you’re at a point where you’re trying to figure out the last mile. 


Dr. Steph

We are figuring out the last mile.


And luckily, when determined to be MCE, social capitals are your neighbor. An Evergreen is our point person. So thank you for being able to work with us to kind of figure out the pathway of as we begin to develop. 


Doug Spencer

Well I’m hoping that you know fairly soon Wendy and I can sit down and actually look at some financial models, you know, because I think that the guaranty model could easily work.


But it’s but, you know, part of the challenge is going to be making the numbers work so that the guarantor sees that it’s actually a business model. You know, not a mask for, we’re going to lose a bunch of money or whatever, you know. Yeah, right. So it’s not to be a sound business proposition in then and then it’s a matter of developing the case and finding the right people to pitch it to.


Yeah, you said it and getting a local bank. I know. Do you already have a local bank? 


Dr. Steph

That’s so the developer. Yeah. So it’s super interesting that you said that. And I think this is worth saying if they went to a large community bank at first and they got a hard no and then when I got involved with the project, I saw that same bank and I said, You know, when they came to you and you said a hard no.


Did you talk about guarantees? Did you talk about low cost debt? Did you talk about, you know, an equity investment construction refinance or bringing additional grant dollars to the table? And they said no. And they said we’d be happy to reopen up the conversation. So that’s exactly where the teams are right now. They’re working with Cerberus, the developer and the Forest Service, to figure out which banks we’re going to use and come to like a hypothetical agreement.


If we bring this much guarantee money or low cost debt or equity or grant money, what’s the combination when you need to bring here to get the two to close the gap? 

And what we’re super excited about is we you know, there’s 800,000 millionaires in the state of Colorado, 87 million, and now we get to crack that code of allowing it to not be a solo journey that you went on, but have it be more of a group journey and figure out how we start activating more and more of our communities to take just a fraction of their money out of Wall Street.


Invest in Main Street to solve our own problems because it’s very doable. Is there any last comments you’d like to make or grants or impact investments you’d like to showcase? I know we talked about the project you’re working on with the Native Women led CDFIs. 


Doug Spencer

Yeah, well, there’s I mean, there’s two things I would say, one specific one that I’m pretty proud of is that I was a founding investor who changed finance and it’s created on the public markets seed. It’s really Morningstar’s highest rated fossil fuel free carbon neutral fund on the market.


Dr. Steph

That’s pretty cool. I’m so glad to hear them. I haven’t talked to them since before the pandemic. That’s really cool. 


Doug Spencer

Yeah. And then I mean, the other thing I would say, if my experience is any measure, is if you have a notion in something, get involved. You know, I learn by doing, you know, I was not afraid to meet people.


I was not afraid to stick my toe in the water then my foot and my knee. And, you know, as I got more and more comfortable over the course of a few years, I decided, you know, I can do this. And it took me a while to hone in on sort of my thematic interest areas, you know, but find what you would but float your boat and go for it.


Dr. Steph

You know, one of the other beautiful parts about you is it’s not just your money. It’s your time and your wisdom. Like we’re getting ready to set up the first independent trust company. Focus on Impact Investing could be in Colorado. And I’m already going to be like, Doug, will you look at our It’s like, could you give us advice and look at how we are framing this? Who should own it? How should we structure it? 


And that leads me to the question, if somebody is listening to this, whether they’re thinking to becoming an impact investor or they might be a good fit for you, for an investment, what’s the best way to get in touch with you and 


Doug Spencer

[email protected]


Dr. Steph

Well, look at you.


I was going to offer if you wanted them to go through with us happily. But I just want to say we’re at the end of our time today. So as we come to the end of today’s episode, I’d like to extend a heartfelt thank you to you, Doug. Thank you for joining us. Yeah, it really has.


Thank you for joining us and sharing your valuable insights. Your perspective added great depth to our conversation on impact investing and philanthropy. 


And for our listeners, stay tuned for upcoming episodes as well. Continue to explore groundbreaking topics in the world of impact Finance. We have some exciting guests and discussions lined up that you won’t want to miss.


Also, keep an eye out for the news and updates related to our podcast will be sharing on our social media channels and through our newsletter. 


Thank you once again for everyone for listening in a special thanks to our guests for their time and wisdom. This has been a courageous capital steward’s podcast with Dr. Stephanie correctly. Until next time, keep making a positive impact with your investments.


As we wrap up another insightful episode, I Dr. Stephanie Gripne would like to extend a heartfelt thank you for tuning in to Courageous Capital Steward’s podcast If you found today’s conversation enlightening and want to stay updated on future episodes, please make sure to subscribe to our podcast. Your subscription helps us grow and continue to bring valuable content.


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