You Built This

We've spent years funding this disaster. All of us. And until portfolios change, the disaster won't end.

We see your social media posts asking what we can do to "save democracy." We see foundation leaders boldly proclaiming they'll increase annual giving from 5% to 6%. We see the hand-wringing, the panel discussions, the somber LinkedIn essays about "these unprecedented times."

Stop. This isn't a hurricane. It's not a passing crisis to weather and move on from. What's breaking is structural, it's ongoing, and your investments are perpetuating it.

The structural force behind the breaking has a name. Last Friday, conservative economist Oren Cass published a piece in the New York Times that clearly laid out our culpability. Financialization: "the term for making financial markets and transactions ends unto themselves, disconnected from — and often at the expense of — the societal benefits that support human flourishing and are capitalism's proper purpose." Financialization, he writes, "contributes to the breakdown in solidarity among citizens, with disastrous ramifications in the political arena, and weakens national security, with serious consequences abroad." That's not us saying it. That's the chief economist of American Compass, a conservative think tank.

Here's what that looks like in practice: Less than 10 percent of Goldman Sachs' 2024 revenue came from helping businesses raise capital. Less than 2 percent of its assets were loans to operating businesses. The rest? Fees. Financial engineering. Speculation. Making money from money.

And the more money Wall Street made from extraction, the more it paid the people doing the extracting, which attracted more of the nation's best talent into extraction. A flywheel of taking that has been accelerating for decades.

Cory Doctorow has a word for what this produces: enshittification. He coined the term to describe how tech platforms decay: first, they serve users; then they exploit users to serve business customers; then they exploit everyone to enrich shareholders. Financialization did the same thing to the entire economy. Finance once served productive businesses. Then it started feeding on them. Now it cannibalizes everything — companies, workers, communities — to generate returns for people who already have more than they need.

Doctorow sees it from the left. Cass sees it from the right. They're describing the same disease. Through financialization, we have enshittified society itself.

You feel it, even if you haven't named it. The main street near your second home has been gutted by private equity roll-ups, replaced by chains or nothing at all. Every customer interaction you have is optimized to extract rather than serve. Amazon promotes its fast shipping as the only convenient option left, because the alternatives were systematically eliminated. And your kids? Glued to platforms engineered to addict them. You feel something deeply broken, and your advisors keep pitching you the same funds that deliver mediocre returns and maximum harm.

You're right. It is broken. And your money is funding the breaking. Look at where your money actually sits. It's in hedge funds and private equity firms loading companies with debt and extracting wealth from the real economy. It's in Meta, a company where six whistleblowers testified to Congress that executives ordered researchers to delete evidence of children being sexually harassed on their platforms. It's in banks whose primary business isn't lending to communities but engineering speculation.

Your money isn't neutral. Your money is doing this.

We get it. Your peers told you this was smart investing. Your advisor called it fiduciary duty — without mentioning that fiduciary duty is far more flexible than you've ever been led to believe. And underneath it all, the faith that the market would correct things. That the invisible hand would sort it out. It’s understandable that you believed it. We believed it too.

But belief isn't an excuse anymore.

The Fig Leaf

Now comes the part where you tell yourself you're different. You've carved out 5%, maybe 10%, for "mission-related investments." You told your advisor to invest in Democracy. You've issued the press release. You've spoken on the panel.

Let us show you what that looks like on a balance sheet.

The Ford Foundation committed $1 billion to mission-related investing. Sounds transformative. Until you flip the page. $5.4 billion in private equity. Another $7.4 billion in "diversified strategies" — a catch-all so opaque that not even their tax form reveals what's in it. That's roughly 75% of a $17 billion portfolio invested in the very vehicles that strip mine the communities Ford's grants try to support.

One billion in mission investing. Twelve billion working against it.

The Rockefeller Foundation is even more revealing. Of their $6.4 billion portfolio: $2.4 billion in private equity. Another $1.2 billion across eight categories of hedge funds. That's 59% in extractive vehicles. Their program-related investments — the money actually deployed for the mission? $47 million. That's 0.74% of assets.

Rockefeller has 325 times as much money in hedge funds and private equity as in program-related investments. The foundation built to advance equity, health, climate, and food systems holds 59% of its capital in vehicles that actively undermine all four.

Ford. Rockefeller. The two most iconic names in American philanthropy. Both telling the same story: mission on the website, extraction on the balance sheet.

That's not alignment. That's a rounding error dressed up as strategy.

The Lie of Outperformance

Here's the part no one wants to say out loud.

You're intoxicated by the promise of market-beating returns. The entire pitch of private equity and hedge funds is that they deliver something extra — alpha, sophistication, access to opportunities the ordinary investor can't reach. You don’t want to leave money on the table.

It's a lie. And the data is now overwhelming.

Private equity is now underperforming a simple S&P 500 index fund over three-month, one-year, three-year, five-year, and ten-year periods. Hedge funds have consistently underperformed a basic blend of stocks and bonds going all the way back to 2008. Businesses acquired by private equity firms are five to ten times more likely to go bankrupt than those that aren't. You are paying premium fees for the privilege of underperformance.

And when private equity does deliver outsized returns? Ask where they came from. They came from loading companies with debt. From slashing workforces. From suppressed wages, externalized environmental costs, and hollowed-out communities. Every point of return above what the productive economy generates comes from somewhere. It comes from someone.

So the choice is even starker than you thought. You're not choosing between high returns and doing the right thing. You're choosing between the illusion of high returns and doing the right thing. The financiers are the only ones who consistently win through fees, not performance.

The productive economy won't promise you 15%. But 15% was never real. It was always extracted from someone. Enshittification exists because you demand those returns.

Stop demanding them.

The Alternatives Are Already Working

We can already hear it: "We'd love to invest differently, but where? There aren't viable alternatives at scale."

That is a lie your advisors tell you to protect your portfolio.

Hope Credit Union is deploying capital across the Deep South to communities that Wall Street won't touch, and generating returns. Apis & Heritage is buying businesses and transitioning them to employee ownership. We've sat across the table from workers who went from having no retirement savings to holding real equity in the company they built — people whose grandchildren will inherit wealth that was created, not extracted. Trust Neighborhoods is creating permanently affordable housing through community ownership via MINTs. The Dearfield Fund for Black Wealth provides down payment assistance to Black homeowners in Colorado, building intergenerational wealth one family at a time. Greenbacker Renewable Energy is financing the physical infrastructure of a livable future. Plus many more.

These aren't experiments. They're proven. They're available. And municipal bonds — funding HBCUs, community colleges, water systems, broadband — have been sitting in plain sight for decades, building the actual infrastructure of opportunity.

The models work. They're just not where most of your money is. 

The Demand

After today, you can no longer claim ignorance. A conservative economist just called your investment strategy a grift in the pages of the New York Times. The data shows your private equity and hedge fund allocations are underperforming index funds. The evidence is not new, but it is now undeniable.

Starting today, continued inaction is not caution. It is negligence.

If you're a foundation leader, stop treating your corpus as separate from your mission. The 95% you're not granting is the most powerful tool you have — deploy it accordingly, or admit your mission statement is more suggestion than strategy.

If you're a high-net-wealth individual or family, stop outsourcing your conscience to an advisor who profits from your complacency. Fire the advisor who tells you alignment is impossible. Find one who will actually do the work.

And if your portfolio looks anything like the average foundation's — 45% allocated to "alternative" investments — you're not diversified. You're deeply invested in extraction.

Move your capital into the productive economy. Into employee ownership. Into CDFIs. Into municipal bonds that build infrastructure. Into renewable energy. Accept the returns of an economy that doesn't require extraction. Those returns are real. What you've been chasing is not.

This is not comfortable. It shouldn't be. It wasn't for us either.

Where We Stand

We came to this work from different directions. One of us spent years inside Big Tech and conventional investing, believing the system worked. The other grew up watching her father build his business in a low-income part of town, throwing a football with the local kids on his lunch break, learning early what it looks like when capital stays in a community rather than leaving it. We both started listening to the people being hollowed out. The numbers confirmed what they already knew.

We know because we're doing it. Not a carve-out. Not a trial balloon. All of our capital.

And we won't pretend we have it all figured out. We're still learning: how to make our capital build in and for communities, how to bring more investors along, and how to make mistakes and correct them.

Is it hard? Yes. The system makes extraction easy and alternatives invisible — by design. Is it complicated? Less than you think, if you actually look. Does it feel good? More than you can imagine. We meet the people we've invested in. The employee owners who have agency over their lives. The communities building something real with patient capital instead of being hollowed out by impatient extraction.

Everything feels like it's on fire. The diagnosis is in — from the left, from the right, from Doctorow to Cass. The question isn't whether the system is broken. It's what you're going to do about it. 

We played a part in building this, and it's time we tried to fix it.