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Categories
Transformative Ideas

Progress or pinkwashing: Who benefits from digital women-focused capital funds?

(Photo by Vanessa Lee / Unsplash)

Along with crowdfunding, biometric cash assistance, cryptocurrencies, and mobile wallets, another growing digitally enabled source of capital is women-focused capital funds (WFCFs). These funds target women-owned, women-led enterprises, femme and non-binary entrepreneurs, and aim to level the access-to-capital playing field.

That’s the good news. However, a newly released study in Small Business Economics on WFCFs suggests feminist investors, policymakers, and entrepreneurs need to be asking more questions before resting their feminist boots. Professors Barbara Orser of Telfer School of Management at University of Ottawa, Susan Coleman of Hartford University, and doctoral student Yanhong Li recently examined the market positioning of 27 funds in the US and Canada. “We were curious to learn if women-centric investment pools, such as WFCFs, aim to alter exchange processes to support justice and gender equality. At the end of the day, we found that the majority of funds focus on fixing women. Few seek to address structural or institutional impediments,” said Orser. “The bottom line is that among the funds that we examined, only a minority sought to counter structural barriers associated with women entrepreneurs’ access to capital. Most were positioned to facilitate individual wealth creation.”

The study found that this kind of pinkwashing is most likely when funds are created as add-ons to mainstream programs and services, rather than as a central element of the organization’s mission of supporting women and non-binary femmes. In addition, few of the funds displayed third-party assessment or an audit of the fund. Opaque accountability and an absence of independent evaluations were common. This means we cannot always be sure that the funds set to advance women-owned and led ventures actually get to them.

According to the researchers, most WFCFs fall short of supporting a feminist agenda to address institutional and market barriers. The team concludes that, depending on the investment, some WFCFs challenge while some simply perpetuate bias and reinforce structural constraints that impede women entrepreneurs by not actually changing investment due diligence and approval orthodoxies. 

The study offers feminist investors insights to consider before assuming that all funds serve an inclusive economic agenda. This study also alerts LiisBeth readers that there are an increasing number of differentiated WFCFs, so it is wise to shop around—and keep your feminist boots walking.

To download the study (for free), click here.


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Related Reading

https://www.liisbeth.com/2019/11/22/righting-who-writes-code/

https://www.liisbeth.com/2019/04/26/where-are-the-women-in-canadas-women-in-tech-venture-fund/

Categories
Featured Our Voices

Don’t "Think" in a Vacuum: Create a Decision-making Framework

Establishing a framework for decision-making isn’t meant to put you in a straightjacket; it’s intended to help you stay focused on the purpose that you’ve set for yourself — to create a successful business. Most of the time, there are alternative solutions to problems; the challenge of choosing the right one will force you to dig deep into your goals, motivations and values.
A decision-making framework guides your response to problems and solutions. It’s how you live the values that you determine are important to you, your business and even your product; and it ensures that those you do business with adhere to these same values. You will need to constantly test decisions against the values you want expressed by your business. It may sound like a lot of work, but we do some of this naturally all the time. Our values guide us instinctively.
What if your only goal is to maximize profits?  
All businesses need to make money, but having that as your singular purpose would guide your decision-making framework. You would pay the lowest wages possible and rent the least expensive space you could find, regardless of its comfort for employees. You would escalate pricing and source the least expensive materials available, regardless of their impact on the environment. You would locate your business in the least expensive jurisdiction available. Indeed, you would make all your decisions to ensure one thing only: the best profit margin. Your employees and the quality of your product would be secondary to making money. You would not think about your clients and suppliers as partners, nor consider how your business impacted their business or your community. For most of us, this is an extreme example.
What does a sustainable business decision-making framework look like?
LiisBeth founder Petra Kassun-Mutch launched the first Platinum Leed certified dairy in Canada in 2008, to produce award-winning, cave-aged cheese. Petra decided her company — Fifth Town Artisan Cheese in Ontario’s Prince Edward County — would not only make excellent cheese but also be a sustainable business, applying a sustainability lens to every aspect. She aligned her personal values with her business goals in her framework for decision-making, and those guided her every step of the way.
Petra partnered with all of her suppliers, learning enough about the business of supplying goat or sheep milk to understand what she could and could not ask of her suppliers. She understood the seasonality of milk production, how farmers built up supply and what it meant if their milk wasn’t purchased. She didn’t ask farmers to do things that would hurt their business for the benefit of her own.
She not only made the manufacturing process sustainable, she also sourced sustainable, organic, raw product, and extended that to elements not obvious to clients and consumers such as the cotton in staff uniforms (organic and sourced through fair trade suppliers); and the packaging, wrapping paper and containers (organic inks and labels adhered with environmentally safe glue). For every aspect of the business, Petra considered and found the environmentally sustainable solution.
What was the impact of her approach? Fifth Town became the number one destination for tourists in Prince Edward County. In its first full year of business, sales hit $1.2 million. People loved the cheese, but they also travelled to experience the entire operation and environmental commitment that Petra had made.
There was a time when sustainability in business was a fringe concept, dismissed as unnecessary or unaffordable. That’s no longer the case, but Petra was ahead of the curve, and she had to keep herself on track, as there was no established path to follow. Creating a decision-making framework ensured everyone who worked with her knew the direction they were going and that taking shortcuts was not acceptable.
Can Feminism be a decision-making framework?
If we recognize that there is now greater comfort in embracing sustainable business practices, what can we extrapolate about embracing equity in the workplace as a decision-making framework? Is it just a matter of time until businesses realize the need for it? Would avoiding the misunderstood and maligned term “feminism” help more businesses adopt the framework for decision-making that could help them achieve more equitable workplaces?
There is no question that feminism is a more difficult decision-making framework to develop and apply, as it’s not simply a matter of sourcing different glue for labels. In fact, it is the glue. It will advance cohesion in the workplace and ensure the greatest contribution by everyone to your business and the economy. Why that isn’t the primary goal of all business, especially those that want to maximize profits, is confusing. Happy employees are the best employees. Happiness comes from having some autonomy in your work, being respected, treated equitably and seeing that the people around you are respected and doing work that is meaningful.
So why is there resistance to even talking about feminism? Perhaps it’s because people think of feminism as an ideology. But wasn’t environmentalism once considered an ideology? Today it’s understood as a practice. Would it really be that difficult for principles of equity to become universal practice? Perhaps there are other barriers to change that we’re not willing to call out. For example, feminism politicizes the process of gender analysis, and politics has yet to become a comfortable and inclusive domain for women.
Plus, applying an expressly feminist lens to your thinking makes you think harder about everything. Next time you make a decision, ask yourself if that decision impacts women differently than men? Is the price of the haircut in your salon higher for women than for men, for a similar cut? Is the cost of a massage the same? Is the cost of tailoring the same for a woman’s jacket as for a man’s? In fact, are alterations included in the price of a suit, as they typically are for a man’s and rarely for a woman’s? Are dry cleaning costs the same?
These are obvious consumer-based examples, but considering them will lead you to more difficult issues, such as pay equity, access to advancement, and mentoring, to name some of the most obvious that we need to discuss openly. Is the government supporting economic development practices that ensure women and men have equal access to capital, for example? Are government programs designed to advance the types of business that attract a higher percentage of men? If so, why? And what can be done to provide equitable support to the business initiatives of women? What’s driving the decisions that lead to inequity?
Learn to question assumptions. In this era of hi-tech, certain kinds of businesses are privileged as being more scalable and global and therefore more valuable. In that environment, how would a disposable diaper be viewed today or maybe a new girdle for women? Spanx, anyone?
Once you’ve put a framework for decision making into place, you’ll discover yourself using it for all sorts of things beyond business. I warn you, though, that will open your eyes to social, economic and political patterns that you probably won’t like. But as a citizen, you’ll then want to push others — government, organizations, and families — to develop an equity decision-making framework too.