2024 White Paper

Outsized Impact: How Investment Can Address the Systemic Risk of LGBTQIA+ Inequity

This comprehensive white paper from Colorful Capital delves into how historic inequities persist in the structures of today in the U.S. and offers actionable frameworks for investors, managers and allocators to address and assess progress towards rectifying the longstanding exclusion of the LGBTQIA+ community.

Read this report to gain perspective on the reality that LQBTQIA+ inequity is nothing short of a systemic challenge that poses considerable risks to the U.S. economy and financial system.

This report goes on to outline the ways in which investors can extend existing portfolio management tools to counter systemic inequity using approaches including: developing investment belief statements, establishing shareholder engagement programs, and incorporating system-level considerations in manager selection and assessment. For extra credit, read about the ways investors can adopt system-level investing techniques beyond the portfolio level by promoting collaborative action, building shared knowledge bases, and setting industry standards. 

M. V. Lee Badgett
Professor Emeritx of Economics at University of Massachusetts Amherst and Chief Economist at Koppa LGBTI+ Economic Power Lab has this to say about the “Outsized Impact” white paper:

“This report shows the financial sector how to deploy its economic power to make the lives of LGBTQIA+ people better. The resulting returns to equality will be shared by LGBTQIA+ people and by us all, with a stronger economy and a fairer financial system.”

“Outsized Impact” makes the case that investors should set system-level goals including: 

  • Promoting LGBTQIA+ equity at U.S. corporations and financial institutions;

  • Increasing access to capital for the broad LGBTQIA+ community; 

  • Improving wealth-generating financial outcomes for LGBTQIA+ founders;

  • Contributing to the development of LGBTQIA-equitable social structures; 

  • Driving financial inclusion to spur economic growth and social cohesion; and 

  • Improving data capture and infrastructure related to dimensions of LGBTQIA+ progress.

Building upon our inaugural 2022 white paper that illustrated the challenges that face LGBTQIA+ founders in accessing venture capital, “Outsized Impact” is intended to inspire investors to leverage their policies, programs, and practices to drive collective action and begin addressing LGBTQIA+ inequity at a fundamental level.

The report draws from the work of The Investment Integration Project (TIIP) and was produced with contributions from Columbia University’s Impact Investing Initiative: Daniel Sheehan, Olivier Bordeleau-Lavoie, and Vaishnavi Kulkarni.

William Burckart
Colorful Capital GP and co-author of “Outsized Impact”

“Succeeding in spurring systemic change will have very real economic impacts as well, as our report also discusses,” added Burckart. “Removing barriers of inequity for LGBTQIA+ people will unlock a massive amount of economic potential, improving both business performance and investment returns.”

Lloyd He
Colorful Capital DEI & Impact Management Lead and co-author of “Outsized Impact”:

“This work helps investors go beyond DEI and ESG metrics and really think about the downstream possibilities and effects of capital flow by widening the aperture from a portfolio-level to a system-level.”