Our founder, Jack Brill, started as a socially responsible investment advisor in 1985. Jack and his son Hal ran a thriving, father-son business for 22 years, and when I joined Natural Investments in 2000, we became a firm. Manager Christopher Peck and I became co-owners in 2007 and one of the first B Corps in the world, a certification which proved we walked the walk as a green and responsible business. Nevertheless, we were a firm of white men. We worked to change that over the last 15 years by adding women and people of color to the team. However, our ownership remained all male until Wealth Advisor and Trust Steward Malaika Maphalala became a partner in 2017.
In the past seven years, Natural Investments successfully achieved gender parity and attained 24% advisors of color. Our plan had always been to gradually sell ownership stakes to these younger advisors, but our unanticipated growth in assets under management brought a much higher company valuation. It became prohibitively expensive for people to buy in.
An alternative ownership model for us emerged when some of our clients invested in Organically Grown Company, a wholesale organic produce distributor profiled in this report, to help it transition to a Perpetual Purpose Trust ownership model. When broad interest in that model led OGC to form a consultancy to advise other businesses, we hired them to help us explore various forms of ownership. Having settled on the Perpetual Purpose Trust in 2022, we spent all of 2023 making the transition.
As such, Natural Investments became the first financial firm in the nation to be owned by a purpose trust. We also became a Public Benefit LLC last year, which means we are legally able to make social and environmental considerations without violating our fiduciary duty to act in the best interests of the company.
The transition from 38 years of individual ownership to a trust accomplished several of our longstanding goals:
- Establish a democratically elected governance structure and a pathway for anyone in the firm to be a strategic decision maker, which instantly changed our leadership demographics to include more women and people of color without their having to incur debt to be in that position.
- Enable partners to sell their ownership stake gradually at a price that would not cause financial hardship to the firm and assure our advisors can continue to assume fiduciary responsibility for client assets.
- Formalize sharing economic rewards equitably among all advisors.
- Assure the firm would not face financial pressure to change, merge, or sell itself, thereby preserving our unique company culture and role as an innovator in the industry, while maintaining a decentralized, cooperative business model that provides advisors with both autonomy and collaborative interdependence.
ITS STATED OBJECTIVES ARE:
- Sustain our fiduciary duty to clients
- Ensure advisor autonomy and encourage collaboration for the good of the whole firm
- Aim for a budget that reasonably balances the importance of the firm’s operational reserves, expenditures that preserve and enhance the firm’s organizational viability, pool of profit distribution, and expenditures that bring value to advisors collectively, as well as to clients, communities, society at large, and the environment
- Provide infrastructure and ongoing regulatory, legal, and administrative services that bring value to advisors
- Promote an inclusive sharing of power in firm-wide decision making
- Share economic rewards equitably among all advisors
- Operate responsibly and equitably for the benefit of advisors, staff, clients, communities, society, and the environment
Next year marks 40 years since Jack started us on this journey, and we know he’s smiling upon us from above for carrying his heartfelt intent. And while Christopher, Hal, and I transition out of ownership after many years, Christopher and I will continue to serve as managers to mentor and cultivate the next generation of leaders from within the firm. We have drawn caring, conscientious, competent, and committed people to Natural Investments. Having more women and people of color guide us forward, and seeing them shine brightly with enthusiasm, new ideas, and a desire to maintain our identity and culture is extremely fulfilling.
For as much as we love the social change and environmental regeneration impact of the investments we make, we are just as proud of modeling the business practices we wish to see in the world. For decades we have known capitalism could evolve into something based on ethics of care for people and the planet, and it is gratifying to continue to pioneer ways to show how that’s possible.
