Social Enterprise

Mainstreaming Gender Lens Investing

Investing in women is an opportunity, not a constraint—and one that can accelerate change for everyone.

“We’d love to have a gender lens, but we’d have nothing to invest in.” I rocked back on my heels, absorbing this statement from the head of the Africa division of a large social investment fund.

Yet he is not alone. Two years ago, when I first talked with the head of a domestic fund investing in women entrepreneurs, she said, “Jackie I don’t have a gender lens.” Her concern was that a “gender lens” made her appear soft, not return-focused.

For the last two years, I’ve led Women Effect Investments, a field building initiative for gender lens investing. In the process I’ve discovered multiple challenges talking about gender in the investment world. It surfaces concerns about quotas and quality, culture and stereotypes. It is seen as soft, unnecessarily feminist, or limiting. I see a huge opportunity in transcending these concerns. Given women’s centrality worldwide to economic development, health, education, and a strong civil society, investing with a gender lens illuminates opportunities and highlights risks.  Take, for instance, the need for electricity in maternity clinics or the challenges that emerge when loan officers are all men. If more investment vehicles employed a gender lens, we could accelerate change for everyone.

To clarify what I by lens—I mean the point(s) of view by which we can analyze investments. There are at least three different lenses that highlight investment opportunities, and they can and often do overlap.

Access to Capital. Women entrepreneurs represent great investments—whether they run micro or high growth businesses in the developed or the developing world. Yet they are often capital constrained. While many people think 90 percent of microfinance loans are made to women, the number is now near 6o percent—and drops even lower for the larger loans. In the United States, The average venture-backed company run by a woman had annual revenues 12 percent higher than those run by men using one third less committed capital.  And an NCRW study found that while women fund managers outperform their male counterparts, they manage significantly less capital.

Workplace Equity. Studies show that women’s leadership and employment positively affect the financials of companies. Fortune 500 companies with the highest percentages of women board directors outperformed those with the least by 53 percent return on investment, according to Catalyst. Leadership behaviors more often applied by women reinforce a company’s organizational performance on several dimensions, according to McKinsey. And gender diverse teams make better decisions. These are just a few examples of workplace equity lenses that drive stronger businesses.

Products and Services. With women making 80 percent of consumer decisions, many companies are looking to design for the female consumer. But there is less attention on investment in products that directly addresses the issues disproportionately affecting women: maternal mortality, clean water, cook stoves, safety, human trafficking. Investing with a gender lens can help scale the companies that significantly improve the lives of women and girls.

So returning to the African fund manager, yes a gender lens includes women entrepreneurs, and we should not be satisfied with their limited numbers. But opportunity lies also in the roles women play as loan officers and managers in microfinance organizations, in the gender diversity of boards and design teams looking at solar appliances, or in the implementation of policies that train cooperative producers to address domestic violence and report trafficking.

Simply put, gender lens investing holds a very clear opportunity to accelerate impact. The data is overwhelming that investing in, by, and for women accelerates social change and drives return. Goldman Sachs has documented what it calls a “gender dividend,” created by the rate at which women reinvest increased earnings in health, education, and nutrition—80 percent vs. 40 percent compared to men. So why aren’t more impact funds focused on enabling this dividend?

Some investment vehicles are emerging, fueled by both opportunity and investor demand. The Calvert Foundation recently launched WINWIN program, which provides investors with a (reasonably) liquid fixed-income instrument and an entry point of just $20! Women’s World Banking’s ISIS fund demonstrates the true impact of a gender-focused microfinance fund, and US Trust’s Socially Innovative Investing strategy can be customized for a variety of gender lenses in public equities and debt. Further, investors seeking to understand and increase their impact on women has led to the creation of Root Capital’s Women in Agriculture Initiative, which seeks to finance 200 gender-inclusive businesses and reach 200,000 female producers in rural Africa and Latin America. There are now opportunities to invest in women moving out of poverty, such as WISE, and to invest in high-growth entrepreneurs, such as Golden Seeds. Women Effect Investments is producing an online map of gender lens investment opportunities, which I imagine will be increasingly populated.

Joe Keefe, CEO of Pax World Funds and a gender lens pioneer, once said: “Conventional wisdom dies a hard death. You have to drive a stake through it.” I say: What will it take to mainstream gender lens investing? The benefits in impact and return are waiting.

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  • Jaya Dargan's avatar

    BY Jaya Dargan

    ON June 13, 2012 09:04 AM

    Great article Jackie - pertinent points all, and key factors in the right direction for encouraging focus on investing and empowering women to affect change in all the ways that such a strategy would mean ~ Good luck with all you that you do !

  • BY Mary Flannery

    ON June 13, 2012 10:14 AM

    Thought-provoking article.  You ask: What will it take to mainstream gender lens investing? For it to be recognized as a mainstream investing consideration, it may require constant vigilence to raise the issue and regular attention to provide compelling evidence. The best way to change perception and behavior is to repeat the same message over and over again.


  • BY Kevin Jones

    ON June 14, 2012 05:41 AM

    I see the pervasive and positive effect of gender lens investing, and I think your examples are compelling. But I am not sure what specific advice you are giving the African fund manager. To actively look for teams led by female entrepreneurs would be a good idea. Incorporating the other ways a gender lens has a positive effect on impact as someone managing a portfolio would also be good, as we do with the fair trade impact, literacy impact and reforestation work the GoodCap portfolio companies do, and report into the GIIRS ratings.. Maybe the gender lens becomes an established metric like that? In what way are you maximizing impact on women? So it’s an impact metric, and not an operational metric? I am all for seeing investments through a gender lens and think the impact is higher the more you focus on having impact on women. Maybe it’s a shift in consciousness that leads to new actions and the measurement is beside the point.

  • BY Jackie VanderBrug

    ON June 14, 2012 03:49 PM

    Thanks Jaya, Mary and Kevin -  I completely agree that a key strategy is raising awareness of the compelling evidence.  We often say, while we need more research, we have a greater need for smart dissemination of the remarkable body of research which exists.  I applaud groups like CGI which designated “girls and women champions” to take a gender lens across all working groups at their recent gathering.  As for advice for the fund manager, Kevin I think your ideas are on track.  Actively looking for women entrepreneurs - and supporting the ecosystem that enables those who are not quite ready for your capital to take the steps to be ready.  We are beginning a project with BLab to look at you to have stronger metrics for the holistic analysis of impact on women.  It is a shift in consciousness but also a shift in possibilities.  And is starts partly by asking questions:  What is the gender breakdown of your board?  How might your supply chain leverage the leadership of women to reduce costs?  How does your product or service impact the lives of women and girls?  And more….

  • Irene Kao's avatar

    BY Irene Kao

    ON June 14, 2012 05:07 PM

    A traditional investing approach—predominantly led by white males (which seems to be the overwhelming default race and gender lens in the industry in the United States)—has proven to be extremely vulnerable and has not necessarily demonstrated greater returns, in the long-term, than what we currently term “alternative” investments, like the examples cited.  Given that this is the case, how do we make a compelling and systemic case that overcomes what clearly must be bias?  Echoing Jackie’s question, how do we build more financial and social capital for a gender lens to be recognized as just good, sound business?

  • BY Willa Shalit

    ON June 14, 2012 06:55 PM

    This is the single most persuasive piece on gender lens investing I’ve seen.  Instead of arguing about what can be done, or what should be done, it demonstrates what IS being done by women when they are given an opportunity, and trusted with capital. 

    The act of investing—whether by individuals or by firms—is as much a culturally-shaped act as ordering lunch or picking out a suit.  Dominant global cultures have taught us, falsely and against all the current evidence, that men handle money more wisely than women.  In that fundamental cultural belief lies the seed of distrust that blocks the investments which would most—as Vanderbrug demonstrates—give men (and women) what they say they want: a better return on their investments.

  • A James Heynen's avatar

    BY A James Heynen

    ON June 14, 2012 07:34 PM

    Vanderbrug wisely rolls out the evidence that women bring better returns on investments than do their male counterparts.  What’s needed is a look behind her altogether correct and convincing piece.
    * The average venture-backed American “company run by a woman had annual revenues 12 percent higher than those run by men using one third less committed capital.”  Why?
    * Fortune 500 companies with the highest percentages of women directors outperformed those with the least—by no less than 53%!  Why?
          *    Gender diverse teams make better decisions”—How do we know? And why?
    * Golden Sachs famed “gender dividend” has been proven repeatedly—the 80/40 rule on reinvestment of earnings—but so what? What difference does it make?

    Vanderbrug has assembled the facts smartly: Investing in and with women pays, on average, the highest dividends financially and socially.  The answer to the question, “Should we invest in women?” is an obvious and resounding “Yes!”  But she, or someone, should take a look behind the evidence to answer what may be harder questions: Why do women outperform men? And why does the disparity in available capital continue?

  • BY Josh Kwan

    ON June 15, 2012 08:35 AM

    Kevin’s point about turning the gender lens into an impact metric that’s commonly recognized is a good one. Investors and donors alike should be asking if they’re benefitting from the gender dividend. Asking this question over and over, as Matt suggests, is a way to mainstream and socialize the idea. Press ahead, Jackie!

  • BY Kevin Jones

    ON June 15, 2012 11:55 AM

    Good answers, Jackie. I’d love to know more about the BLab work.

  • BY Bonnie Foley-Wong

    ON June 15, 2012 01:10 PM

    Thank you Jackie - your work and perserverance inspires me.  It could very well have been our meeting last year and attending the Convergence conference in October that led me to build Pique Ventures - a women investors network in Canada, to invest in entrepreneurial women.  It’s only the beginning.

    As attendees at Convergence discussed - it is not a man/ women issue.  It is a diversity issue.  We have witnessed in nature and ecosystems - when we lack diversity, ecosystems fail.  In investing, in business, and in our economic systems, we also need diversity for those ecosystems to thrive.  I think you’ve done well Jackie for laying out the stats, the information, and inviting conversation.  Gender lens investing (and impact investing for that matter) requires stepping into someone else’s shoes.  Sure, some folks seek advice, but advice at the end of the day is just information.  It is not a decision.  Gender lens investing (and impact investing) to me is about making different investment decisions - in an integrated way that takes emotions, intuitions, and our bodies into account, alongside analysis.  Metrics?  Helpful - but it’s only part of decision-making.  Everyone is capable of making integrated investment decisions.  My hypothesis is that women are already leaders at this.

    All the best,

  • Tina Browne's avatar

    BY Tina Browne

    ON June 17, 2012 05:45 PM

    Jackie, what a thoughtful piece that clearly outlines the success of Women Effect Investments and the challenges that lay ahead.

    It seems that gender can be applied as a primary or secondary factor for investments.  For gender lens investing to be mainstream, to what extent do you think it is necessary for it to be a primary criteria? I think that if we talk about gender as secondary, we risk trivializing the goal and the true value and impact of investing in women may not be realized. On the other hand, simply acknowledging gender is important and a step forward, even if it is secondary. How will we known when gender lens investing is mainstream?

  • BY Jacki Zehner

    ON June 20, 2012 10:54 PM

    Jackie what a great piece! I am a proud supporter of this work as giving dollars alone will never be enough to create greater gender balance.  I can’t wait for the idea of having a gender lens to investing becomes mainstream and we can look back and say I remember when… Thank you for your leadership.

  • Andrea Turner Moffitt's avatar

    BY Andrea Turner Moffitt

    ON June 21, 2012 07:28 AM

    Great article Jackie - compelling evidence framing out the business case for gender lens investing.  Addressing your question on making it mainstream, I echo previous comments on the importance of raising awareness. I would add that we need to do so both on the supply side in terms of growing the investment vehicles and on the demand side encouraging more retail investors, particularly women, to be actively engaged in aligning their values with the allocation of their financial resources across philanthropic giving and market investments.

  • BY Servane Mouazan

    ON June 22, 2012 01:50 AM

    Thanks for this piece Jackie and also for all contributions thereafter that provide even more light on the topic.
    Gender Lens Investing in our organisation ( means also encouraging women social entrepreneurs to learn to invest in themselves, learn to go through the soul-searching, the assumptions, the pre-conceptions, learn to say clearly what they want and what they don’t want. It’s about working with them on the confidence issue, shifting from the stereotype that they are risk adverse and making them see that they are just risk-aware. In fact, when we engage women to invest in themselves, in their learning, they are more likely to claim their space, their pay-back time and to become greater investors in others in their turn.
    I also have an issue on the diversity topic. why on earth be sex and gender be aligned with categories that define you AFTER your sex and gender. You are born with one or the other sex, you grow with one or the other gender. That comes before being poor or rich, or able bodied or disabled, black or white… This is where i think a bit of work is needed, adjusting the concept of “diversity” and how it is understood in the investment/work/life context.

  • BY Nellie Morris

    ON June 25, 2012 11:49 AM

    Great article Jackie, thank you for sharing your insight and the pioneering work you are doing. I agree with previous comments that the data and evidence is becoming more available and clearly demonstrates the advantage of investing with a gender lens. I look forward to seeing if the research will inform an emergence of investment vehicles both on the retail and institutional side that allows for greater visibility and accessibility for increased capital to flow towards women.

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