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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The writer is director of the Ford Foundation’s Mission Investments team
In 1948, as the UK and neighbouring countries reeled in the aftermath of the second world war, America donated about $160bn in today’s money to the Marshall Plan to rebuild western Europe.
But the Marshall Plan wasn’t just about money. It inspired hope in the face of despair. In the darkest of times, it propelled people towards a brighter future.
When I heard news of the Church of England’s £100mn initiative to combat the effects of chattel slavery and received an invitation to join the oversight group, I was struck with hope. The Church Commissioners’ endowed initiative, named “The Fund for Healing, Repair, and Justice”, has a dual mandate: to generate positive social impact and the financial returns required to do so into perpetuity.
Like the Marshall Plan, this fund seeks to rebuild what was destroyed — and to unleash human potential, ingenuity and innovation. Grants will be made to community-building NGOs, investments made in Black-led businesses, and funding for research into the history and continuing legacy of chattel slavery, whereby people were treated as property. Funds will not go to individuals as compensation.
As with any bold move, the fund will be heavily scrutinised. Some will say it is too small. Maybe, but it’s a vital and symbolic start. Others will point to the irony that everyone, regardless of ancestry, will benefit — even the direct beneficiaries of wealth from chattel slavery, which has grown through compounding over the centuries.
Americans were faced with a similar irony about 150 years ago when their government was lobbied to pay reparations to freed slaves. Those arguing this case, self-interested or not, knew that funds intended to advance financial fairness for Black people would be recycled back to the white economy.
The government did, in the end, pay reparations — but to the former slave owners. So white wealth extracted from chattel slaves and passed down over centuries was supplemented with more government funds on top of previous handouts to white settlers. Meanwhile, chattel slave descendants experienced the negative compounding of a widening Black-white wealth gap that grows with each passing day.
The Church Commissioners have charted a different course, one that is righteous, wise and financially savvy. They recognise that we are all sailing together on ships with a common destiny, and we will all rise together or sink under the heavy weight of sin and unfairness.
Their historic commitment is a template for others to act — those with direct links to the transatlantic chattel slave trade and others inspired to help heal this shamefully injurious chapter of history. Savvy investors will quickly recognise the compounding value that these investments can yield over time, building wealth and bolstering the global economy. As Warren Buffett once said, “My wealth has come from a combination of living in America, some lucky genes, and compound interest.”
Along with critics, there will be those who hold out. In America, powerful people make lame excuses to skirt the subject of chattel slavery’s continuing legacy. They insist that, because they weren’t complicit in its operation, they are absolved of responsibility. In so doing, they hurt the whole country. Data shows that race-based exclusion has cost the US economy $50tn since 1990. A Citi report found racial fairness could generate 6mn jobs and $5tn in gross domestic product in five years.
What’s more, direct responsibility has never governed decisions about reparative investments. The US was not responsible for the death and destruction in Britain or the other Marshall Plan beneficiaries. Yet it poured billions into rebuilding because of the enormous returns. That circular economic effect was part of the philosophical underpinnings of the scheme. The benefits are both financial and social.
Some may wonder whether impact investing can generate the financial returns required for social impact in perpetuity. From what we’ve learnt from the Ford Foundation’s own landmark foray into impact investing, the answer is an unequivocal “yes”. It may be harder than traditional investing but it can flourish with careful, patient and intelligent stewardship — just like any successful investment strategy.
Britain, the US and other nations built massive wealth from the violent and dehumanising transatlantic chattel slave trade. It will take generations to heal the deep moral, economic and social wounds it caused. This first step by the Church Commissioners for England is a giant leap towards a brighter future for us all.
