Diversity is the brand of Canada. Also in Canada, nearly ninety per cent of venture capital investment deals are directed to companies founded exclusively by men. Black charities receive as little as seven cents for every hundred dollars donated to Canada’s big charities. Indigenous organizations receive just over one-half of a per cent of charitable donations in Canada.
Eighty-five per cent of money invested in Canadian venture capital funds goes to funds with no female partners. And less than three per cent of venture capital is invested in women founders, with nominal investments in women of colour. Canadian Foundations that invest in impact investing, invest almost exclusively in white or male fund managers.
We often think of being good or bad as binary and static. As Canadians, our attachment to being good people risks our ability to be better.
Despite the conversations on equity and diversity, there are growing inequalities in capital flows — amplified through the impacts of COVID-19 — that threaten economic growth and social cohesion. From philanthropy to impact investing to venture capital, communities with diversity across gender, ethnicity, ability, sexual orientation, geographically, among others, lack access to capital.
When it comes to addressing capital flows, action towards equity is fragmented, siloed and slow, while displays of commitment to change are rapid and abundant.
Toronto Raptors President Masai Ujiri reflected on the composition of the audience at his recent Giants of Africa gathering. He noted that had George Floyd been murdered a week ago, the room would look different. Making meaningful change is not accomplished in a moment. It requires a movement and a sustained commitment.
We can move beyond a scarcity mindset which makes us believe that we do not have enough money to invest in diverse leaders and founders. This mindset amplifies that one investment we made in a diverse founder or fund while ignoring our broader portfolio. It leaves those with the least power without access to capital.
We can collect disaggregated data to know our baseline, set targets and build accountability systems to help make capital more inclusive.
We can approach increasing capital to underrepresented communities as a business problem, mobilizing the appropriate resources and capacity to solve it. Building a competitive and economically prosperous Canada is accelerated when we tap into the vast talent across all of our communities. When capital flows are limited due to risk perception, networks and systems, we miss out on this opportunity.
Through collaborative research, shared resources and increased transparency, we can accelerate access to capital to those excluded. We can advance inclusive approaches to increase social and economic prosperity for all by flipping orthodoxies, challenging the status quo and investing in undervalued founders, managers and leaders.
Equitable capital flows will not be achieved through diversity days. Just as a single workout does not result in rapid health transformation, meaningful progress toward equity requires sustained action.
Narinder Dhami is the Executive Lead of New Power Labs.