Frequently Asked Questions
In sticking with Candide Group’s affinity for literary characters, Olamina’s namesake is Lauren Oya Olamina, the protagonist of Octavia Butler’s novel Parable of the Sower. Set in California in the 2020s — where society has largely collapsed due to climate change, growing wealth and racial inequality, and corporate greed — the novel centers on a young woman of color who possesses what Butler dubbed hyperempathy or "sharing" – the ability to feel pain and other sensations she witnesses. Olamina boldly leads her community to search for a better future in the midst of their dystopian reality. Fittingly, Olamina has its origins in the African-Yoruban language, meaning “this is my wealth.”
The impact investing field is actively discussing the gaps in many of our systems, specifically the financial system, as a result of systemic racism. Potential noteholders are looking to invest in local communities with institutions that have an established track record of repayment to investors, low default rates, and the ability to work in collaboration with the communities they serve. Foundations and Donor Advised Funds (amongst others) have significant appetite for loans and investments that could be activated towards social and racial justice. CDFIs and private funds are seeking patient and flexible capital to fund their loan programs and low- to moderate-income communities that serve demographics that have been historically excluded and abused by the financial system. The Fund will provide CDFIs with capital that meets these needs and offers noteholders a way to support these organizations in a low-risk, high-impact way.
WHERE IS THE MONEY COMING FROM, AND WILL INVESTORS MAKE A RETURN?
The money is coming from two Donor Advised Funds held by Candide’s clients.
Yes — the investors will make a return — 1% per annum fixed for five year notes, and 1.5% fixed for seven year notes. To be clear, when we are investing in communities that have experienced historic extraction, systemic racism and predatory practices, what is considered “reasonable return” to investors must be redefined beyond mere financial return and oriented first toward social return. Our hope is that we can encourage the field to talk more concretely about what it means to invest in social justice, especially when discussing restoration and repair.
WHO MAKES DECISIONS?
Decisions on loans will be made by the Credit Committee. The Credit Committee will be comprised of the Managing Director and the two founding partners of Candide, Morgan Simon and Aner Ben-Ami as well as two representatives from the Community Advisory Board. The Community Advisory Board members have a veto vote in that no loans can be made without their consent.
Additionally, the fund has been set up with the intention to share profits from the fund with all stakeholders: the Borrowers, the Investors, and Candide Group as the ultimate owner. This is a discussion on how the Community Advisory Board members can participate too. The decision on what this profit share is ongoing and we look forward to sharing that with you in the future.
WHY IS THIS FUND, FOCUSED ON RACIAL JUSTICE, CURRENTLY LED BY A WHITE WOMAN?
This is a great question that we are actively talking about. While Lynne has significant experience in finance and is committed to her own work around white privilege and being accountable to black women — and believes it is the explicit responsibility of white people to take on racial injustice — her lived experience is very different from that of the communities Olamina Fund will support. This is part of the reason that, in hiring for the portfolio manager role, we were explicit in that the ideal candidate would have lived experience that supports the values of the fund.
The fund is hyper-intentional in who it chose as service partners and from what communities those service partners are based. We are committed to getting outside of our “Bay Area bubble” and spending more time in community learning about the intersectionality of issues that racism and white supremacy upholds. Lynne is grateful for her community of Integrated Capital Fellows that keep her accountable in the work and a trusted group of allies, also with growing businesses committed to social justice.
That all being said, there is a discussion internally on what it would look like to have a timeline to transfer the management of this fund. In the interim, we expect the Community Advisory Board, which will hold a lot of decision-making and power, will keep us accountable to community.
WHY THE EMPHASIS ON CDFIS?
CDFIs have been doing their work quietly and consistently for the last thirty years in significantly disadvantaged communities, supporting a wide variety of businesses owned by women and people of color. In 2001, the Brookings Institute wrote that CDFIs helped prove that gender and race are not reliable indicators of financial performance. The financial system has been built centering race and gender as an adverse indicators of financial performance, from racial covenants in loan agreements in the 1920s, 1930s and 1940s, redlining, or the market failure within venture capital funding that allocated 2.2% of $85B to women founders and <1% or women of color founders in 2018. Since this study came out, CDFIs continued to grow and weathered the great recession despite lending to populations that the traditional financial market deemed risky. They have been flowing capital to the most impacted for many years and have been disproving the systems assumptions. They have work to do around ecosystem building and how they think about community wealth but in reality, CDFIs are some of the first social justice funders.
HOW DO I GET INVOLVED?
The fund is closed to investors for the first year. For community members: if you know of awesome CDFIs, funds, and/or social enterprises that are rooted in community and justice, we’d love for you to introduce us directly.