RECONCILING INDIGENOUS INVESTMENT

Social impact funds and specialized consultancies are changing the narrative of Indigenous philanthropy

THERE’S A MULTIPLIER EFFECT THAT HAPPENS WHEN ENTREPRENEURS FIND INVESTORS WHO ARE ALIGNED WITH THEIR VALUES Bobbie Racette Founder Virtual Gurus

JEFF TODD

For the longest time, Bobbie Racette, an Indigenous entrepreneur, felt like nobody understood her. After being laid off by an oil and gas company in Alberta, she had $300 in her pocket, but big dreams – to launch a virtual assistant platform and revolutionize how businesses operate. So, like many entrepreneurs, she dove in head first and hit the pavement, seeking others that shared her vision. “I approached and was rejected by 170 investors over the first four years of the business,” says Racette, who is of Cree-Métis background. “I had to take a step back from pitching high-tech investors and re-evaluate my audience.” As a young Indigenous entrepreneur with no previous experience in the field, she soon discovered the conventional marketplace didn’t align with her circumstances and worldview. That is, until she met Raven Indigenous Capital Partners, a Vancouver-based social impact fund focused on understanding, uplifting and investing in Indigenous entrepreneurs. Using a sustainable, values-driven approach, the firm is concerned not just with profit, but also poverty reduction, community resilience and the development of an Indigenous middle class. “A lot of doors that are open to others are not open to Indigenous entrepreneurs,” explains Paul Lacerte, managing director at Raven. “Access to capital that is culturally safe, patient and fairly flexible, and comes with support, was a key step missing to help accelerate the Indigenous social economy. So we decided to take a run at setting up Canada’s first Indigenous-owned venture capital firm and act as financial intermediary and translator for people that want to lean into reconciliation.” Today, Racette’s business Virtual Gurus is booming, and boasts more than two-dozen employees. According to Lacerte, the business has increased in value six-fold since Raven’s investment. Principles over profit. Value beyond dollars. However you wish to put it, Racette and Raven represent a renewed, growing interest in Indigenous-led causes and organizations. The issue came into sharp focus in May of this year, when the bodies of 215 children were confirmed on the site of the Kamloops Indian Residential School. The confirmation set off an avalanche of sadness, anger and introspection across Canada, as hundreds of other unmarked graves continue to be found throughout the country. Meanwhile, Canada is fresh off its first National Day for Truth and Reconciliation in September, with Canadians across the country wearing orange to reflect and remember those who died, and those who continue to be impacted by the legacy of residential schools. Many Canadians were left wondering: beyond acknowledging the past, what can I do to help? How can I make a meaningful impact? Put simply, where do I start? It was a question Lacerte and his partners asked themselves when they first started Raven. He says they had no idea how many investment-worthy projects would be out there, let alone investor appetite. Raven has now answered that question, resoundingly. On January 31, the firm closed their first Impact Investment Fund worth $25 million and offering a 6% to 8% return over a 10-year fund life. Lacerte says the investment appeals to those seeking a “blended return” of appreciation and impact in the Indigenous space. Next summer, Raven is planning a second fund in the $50 million to $100 million range. According to Lacerte, the firm has discovered a “substantial appetite” in both Canada and the United States. For investors looking to get involved, Raven provides that secret sauce of cultural understanding and business acumen. “There’s a multiplier effect that happens when entrepreneurs find investors who are aligned with their values,” Racette adds. “If we empower Indigenous entrepreneurs with capital and expertise for success, we’ll have a lasting impact on the strength of our communities.” While Raven is focused on impact through entrepreneurism, others are concerned with empowering Indigenous-led

Bobbie Racette is the founder of the virtual assistant platform Virtual Gurus • SUBMITTED

causes, and encouraging donors, foundations and companies to direct funds to where they are most needed. Kris Archie, CEO of The Circle on Philanthropy and Aboriginal Peoples in Canada, points out that actual dollars rarely it make directly into the hands of Indigenous-led or Indigenous-informed organizations.

Measuring the Circle, a study completed in both 2014 and 2017, found that less than 1% of philanthropic dollars go towards Indigenous-led organizations. “We are working against broad stereotypes that issues related to Indigenous Peoples are not the problems of Canadians,” explains Archie, who lives in British Columbia and joined the national organization in July 2017. “The thinking has been: Indigenous issues are their issues, or the responsibility with them lays with federal government. So I think it is not just about the settler philanthropic sector catching up. I think it is also the Canadian narrative about Indigenous Peoples in this country is rife with stereotypes about Indigenous people always asking for another handout.” The Circle, as the name implies, includes an intimate collection of members that seek to break down these stereotypes, while promoting more giving and bridge building with Indigenous-led and Indigenous-informed groups. The organization offers learning, training and workshops for a broad range of members, from the Toronto Foundation, to Home Depot Canada, to PetSmart.

The second audience is Indigenous-led and Indigenous-informed organizations. “A unique feature of The Circle is they provide us with a lot of guidance on how they want to relate with settler philanthropic institutions and our work is to facilitate those relationships,” she explains. Although listening is important, Archie isn’t interested in commissioning more studies to confirm what her organization knows – Indigenous-led and Indigenous-informed organizations desperately need funding. Support them, she says, and get out of the way. Archie believes too much weight is often placed on the need to understand

Indigenous issues and causes. In other words, the time for action is now. Archie also recommends taking the time to understand whose land and territory you are on. Next, think local: consider supporting your local Friendship Centre, for example, with 125 of them spread out among urban communities across the country. Research other local Indigenous-led or Indigenous-informed organizations in your area, such as the Ontario Indigenous Youth Partnerships Program, where all the grant decision making and programming is done by Indigenous youth. “The balance is to do your listening on your own,” she says. “And then act. And you don’t need to do all the learning in the world to act. There are undeniable issues and causes that need to be supported. You don’t need to know every piece of data and research to understand that not having drinking water is Kris Archie leads The Circle a problem. You don’t need to know how many more children’s on Philanthropy and Aboriginal bodies are going to be discovered beside Indian residential schools to recognize that is harmful.” Peoples in Canada as the Lacerte, from Raven, feels the philanthropic community – organization’s CEO • SUBMITTED particularly the community foundations in Canada – have been “a patchwork of progressively minded individuals and surprisingly conservatively minded folks.” While acknowledging that government spending and donations will always have their place, he believes Canada needs “an avalanche of private capital into the innovation space” to replace the stereotypes and broken narratives around Indigenous communities. “We have armies of brilliant, young Indigenous people and I think all of those old paradigms – ‘Oh it is so complicated to work with the natives, we are throwing good money after bad’ – and all those broken narratives are being replaced by surprise after surprise of excellence and innovation and capacity,” Lacerte says. Regardless of the approach, Indigenous leaders of all stripes can agree – the time for real action is now.

WE DECIDED TO TAKE A RUN AT SETTING UP CANADA’S FIRST INDIGENOUS-OWNED VENTURE CAPITAL FIRM AND ACT AS FINANCIAL INTERMEDIARY AND TRANSLATOR FOR PEOPLE THAT WANT TO LEAN INTO RECONCILIATION Paul Lacerte Managing director, Raven Indigenous Capital Partners Raven Indigenous Capital Partners

WHERE TO START

1. DON’T JUST LISTEN – ACT Do your research and find Indigenous-led and Indigenousinformed organizations in your area. If you can, support them directly and assist with grassroots programs. out and support your local Friendship Centre. There are 125 of them located in urban centres across Canada.

3. TAKE RESPONSIBILITY Indigenous issues are a shared legacy and not simply the responsibility of government. Indigenous problems are problems for all Canadians.