The Captain's Duties Part 2: Moving from Lens to Lever

In our first post, we argued that the wealth advisory industry has inverted the natural relationship between investors and advisors. 

The advisor chooses the destination. The investor approves the route. And the whole thing is held together by a fee structure that punishes anyone who tries to go somewhere new.

But if we're going to reclaim the captain's role, we need to be specific. Here is what the Captain owes the partnership to ensure capital is a tool for transformation, not extraction.

Declare a Destination, Not a Vibe. "I care about climate" is a vibe. It is passive. It gives your advisor permission to slap a green label on the same extractive portfolio and charge you higher fees. A real theory of change is a destination. 

Be as clear as you possibly can be about your values. You know what you care about. Don’t let an advisor tell you it’s too complicated or that you don’t understand. You know the world you want the next generation to live in. 

For example, part of our theory of change says: We are cultivating an ecosystem where ownership is shared and communities are self-determined. That is a benchmark. It means all investments must examine exits as a part of our strategy. Who is left with agency when an investment ends. That's concrete enough that someone could review our portfolio in five years and tell us whether we're living up to it. It connects to specific investment pathways. It gives our advisors something to navigate toward.

As we shared in our first post in this series, some of our early investments make us incredibly uncomfortable and even embarrassed. We took impact pitches at face value and made assumptions about values alignment. By making some mistakes, we realized we needed to be much more specific about what we meant by “equity,” “racial justice,” and“shifting power” among other things. We needed to learn from those who were closer to these problems and those who had taken the time to pull apart the impact washing to lay bare how those investments were propping up the same old systems. 

We read books like Adrienne Buller’s The Value of a Whale and learned that market solutions are hardly going to make a dent in the climate disaster. We listened to local employee-owned businesses share what changed for them after purchasing their businesses from the previous owner. We remembered the lessons that Katie learned as a kid watching her dad play football in the street with the kids skipping school where he listened to them and didn’t assume that he had all the answers to their lives that they understood so much better than him. 

Most investors we talk to have strong views about the world, but haven't translated them into actionable outcomes an advisor could act on. That's not the advisor's failure. It's the captain's job. And it's harder than it sounds, because it means deciding what you're not going to prioritize too.

Interrogate Where Your Returns Come From. We’ve normalized "market rate" as a natural law. It isn't. It is a benchmark built on wage suppression, externalized environmental costs, & the systematic stripping of community wealth. You should look at who’s paying and who’s gaining from each investment. Does the investor receive an outsized share of the upside relative to other stakeholders?

When 66% of Black and Latino workers retire with zero savings, while workers in Employee Stock Ownership Plans (ESOPs) hold a median of $165,000, that gap isn't an accident—it’s the system working as designed. If you demand a market-rate return without asking who paid the price, you are endorsing the exploitation that created it. The burden of proof must be on the return, not the alternative.

One fund that we invested in describes itself this way: “creating an impact that reaches beyond monetary returns,” “doing well by doing good, and doing good by doing well”, “harnessing venture capital returns for good is core to what we do”, “maximize the positive impact on the world”, and lastly “mission-driven.” These all sound like great things, right? A values-aligned friend encouraged us to join this fund and since we hadn’t done the work to get specific about our values, all of these descriptors seemed to work with our loose theory of change. Needless to say, despite all of these platitudes, this is another fund that we regret investing in. It took being very specific and defining both what we wanted from our money and what we didn’t to make better decisions. 

This interrogation is ongoing. We still hold investments where we're not entirely sure how the returns are generated. We're not claiming purity. We're claiming the practice of asking.

Align 100% of Assets (No More "Impact Side-Hustles"). Most impact investing is treated as a charity project on the side of a "real" (extractive) portfolio. This is equity washing. We believe total alignment is the most serious path. The hard question is whether all your assets align with your values while still meeting your financial needs. Not the lifestyle your advisor assumes you want. Your actual needs.

Several times during our journey to be 100% values-aligned, partners told us what we were doing was too risky, too illiquid, or not “best practice”. So we asked, why? Why is it too risky? Is it really too risky, or is it just different? Why the obsession with liquidity? If we ladder our municipal bonds and maintain cash at some CDFIs, what is the worst emergency we can think of that this strategy wouldn’t be able to handle? Slowly, as we asked for these alarm bells to be explained and for scenarios to be considered, we gained reassurance that, by using strictly values-aligned investments, we could have a significant impact in the world and meet our needs. And what of the assets that we moved out into community? Tell us more about those! Tell us how enabling a community to start investing in itself will compound over time and drive sustainable, generational change.

We must be honest: total alignment has created challenges. Liquidity looks different when you're not holding public equities. Tax planning gets more complex. Some opportunities we believe in deeply don't fit neatly into any financial bucket. We're still figuring out the mechanics, even as we're certain about the direction. But it has been fun to gather a group of partners who know we are more thrilled to hear about true, deep impact before the financial returns. It enables them to be creative and nimble, and to feel urgency about the world rather than be constrained by perceived risks and demands of growth. When you are very specific about your needs then your advisor can meet your needs within a portfolio that also matches your values.

We have divested from traditional public equities entirely. Why? Because we believe you cannot vote your way to justice within a legal structure of shareholder primacy. If a company is legally bound to maximize value for absentee owners, it is structurally incapable of prioritizing workers or the planet. By being clear about our values it helped us to make this argument to our advisors in a way that they could get behind and help us to achieve.

Trace Every Dollar to its Beneficiary. Every dollar you invest ultimately enriches someone. Is it a worker building generational wealth through a cooperative? Or an absentee shareholder extracting value from a community they will never see? Is it creating infrastructure for clean energy or is it helping “a business model built on gaming the system without knowing or even caring what’s being traded” as Oren Cass shares. Opacity is a tool of the status quo. If your advisor can’t tell you exactly who benefits from an investment, it’s usually because the answer is "the system." 

This sounds simple. It's not. Ownership structures are often deliberately opaque. Fund-of-funds layer intermediaries until the ultimate beneficiary is invisible. But opacity isn't neutral. When you can't follow the money, it's usually because someone doesn't want you to.

As we researched investing in Shared Capital Cooperative, we were excited to see their track record investing in co-ops that created well-paying jobs, worker voice in their work, and accounts that helped people to build wealth. We could see how the investment would create real outcomes for people while delivering a modest return for us. 

We try to invest only in structures where the beneficiaries are visible and their interests align with ours: ESOP workers, CDFI borrowers, and community land trust residents as examples. That's not always possible. But it's a lever that we believe is important, and the one we think any captain should consider if not outright demand.

Examine the Power Structure. For us, this meant that we would relinquish power to the frontlines. This is the hardest duty. The best use of your power is often to share it. We don't "save" communities; we invest in their agency.

Through Unlock Ownership, we handed decision-making to the deep experts in shared ownership. Our thesis was that those who understand the problem will be best suited to determine the solutions. We are so grateful to the committee and to Impact Charitable for embracing this vision for the fund and bringing it to life. It has been inspiring and so impactful! The people closest to the challenges possess the best insights and capital should be a tool for their leadership, not a leash for our control.

This is the one that challenges the captain metaphor itself. The people and communities you're investing in understand their own needs better than you do. Community-controlled institutions, participatory grantmaking, and investment structures in which investees shape the terms—these aren't concessions. They're a better strategy.

We invest in self determination, not charity. That distinction matters because it shapes who holds power in the relationship. A charitable framing puts the investor at the center: "I'm helping." A self-determination framing puts the community at the center: "They're leading, and I'm providing capital on terms they shaped."

We can’t say that this is the structure for all of our investments but when agency isn’t present we require there to be dignity for the beneficiaries at a minimum. 

Choose Your Navigator Deliberately. Not every advisor needs to share your theory of change. Some investors want a navigator who is a pure technician—someone who can structure a recoverable grant or build liquidity without public equities, regardless of their personal convictions. Others want a navigator who brings their own investment thesis and challenges yours.

Both can work. But you need to know who you're hiring, and you need to choose deliberately. The worst outcome is an advisor who claims alignment but doesn't have the tools, or one who has the tools but steers toward a different destination when you're not looking.

These duties aren't easy. They require more work from the investor than the conventional model demands. But that's the point. And it’s YOUR money and power in the world that you can direct or relinquish. The conventional model is comfortable precisely because it asks so little of you. But it’s also uncomfortable because you are left wondering, “Is my money doing harm? Is my money doing what I want?” It lets you be a passenger. And passengers don't get to complain about where the plane lands.

In the next post, we'll lay out the other side: what the navigator owes to this partnership. What to demand from any advisor who claims they can help you deploy capital for justice, not extraction. Because high expectations run both ways.