From the Outside In: An Interview with ImpactAlpha's LGBTQ+ Journalist Founder
David Bank is a long-time journalist who covered Microsoft for The Wall Street Journal’s San Francisco bureau at the height of the dot-com boom. He later penned a book on Microsoft. Today, David is editor and CEO of ImpactAlpha, a subscription-based digital media platform covering the field of impact investing that recently raised $3.3 million in financing.
David is also the reason that these authors (Megan and William) first met, enabling our collaboration on LGBTQ+ access to capital to take root. The following is our interview with David Bank in which he talks about everything from being an out journalist, to his equity raise for ImpactAlpha, and his advice for LGBTQ+ founders today.
Let’s start with a level-set about how being LGBTQ+ has influenced the arc of your career.
I was a newspaper reporter back in the days when there were these things called newspapers. I did that work for 20 years, starting at local newspapers in Los Angeles and moving to the San Jose Mercury News in 1990 and the Wall Street Journal in 1996.
Back in 1990, Leroy Aarons, who had been the editor of the Oakland Tribune, started the National Lesbian & Gay Journalists Association. He had conducted a survey to get a sense of how many queer reporters and editors there might be. In the early 90s, Randy Shilts at the San Francisco Chronicle was known as the only out gay newspaper reporter; there was also Jim Dickey at the San Jose Mercury News, where I was. Roy’s survey led him to convene the first conference of gay journalists in San Francisco in 1992, which I attended. I was interviewed by Jane Gross, a New York Times reporter, and was quoted in the paper, saying "I'm looking forward to making my writing and reporting more direct because the first step in telling the truth about somebody else is telling the truth about yourself," citing Andrew Sullivan, who had just spoken at the conference.
I had been out to my family and friends, but now I was out as a bylined reporter – in the New York Times. The conference was a watershed moment. Where previously there had been two out reporters, suddenly there were a thousand. In short order I was covering the gays in the military story when a sailor at the local Navy base came out. Being out was helpful both in covering the story and going to the editors - bringing authenticity to the journalistic process.
I never identified myself as a ‘professional gay’ reporter, though. I wasn’t particularly interested in that as a beat. I did over time do a bunch of stories – gays in Silicon Valley and gay marriage and gay startups back in the dot-com days and now in impact investing. I was always comfortable writing about gay issues, but I was just a reporter who was out and gay.
How did you make the transition to covering impact investing and ultimately deciding to launch ImpactAlpha?
When I wrote my book about Microsoft, Bill Gates and other tech guys were venturing into what was then called venture philanthropy. They were employing a philosophy of applying business practices and tech ideas to address social challenges. I became enamored with that kind of pattern-matching as I pioneered the philanthropy beat at the Journal.
My thinking about the limitations of philanthropy, however, was galvanized when I learned about the IRS’s 5% payout rule for charitable foundations. A McKinsey consultant named Paul Jansen ran an NPV analysis of foundation endowments with this 5% payout rule and found that foundations were essentially squandering half the spending power of their endowments by sitting on their money.
In the mid-late 90s, AIDS researchers had just developed the anti-retroviral cocktails for HIV and were rolling them out in the U.S. To get them into Africa was seen as a $10 billion project. I thought it was insane that these foundations with $500 billion in their endowments couldn't find the necessary dollars to treat this vulnerable population and head off a devastating epidemic. They behaved as though the 5% rule was a limit rather than the minimum. I had a front-page story in the Journal that opened up the topic of ‘giving while living.’
Essentially I had the right problem but the wrong solution. It wasn’t about the 5%, but the other 95%. Not only could charitable foundations put their entire endowments to mission-driven use, but why not turn the entire global financial system into an optimization engine for social and environmental benefit? This was my intellectual journey to ImpactAlpha.
In the early days, everyone I talked to said, "You're the only reporter who's interested in this." That reinforced my interest in this largely untapped domain. I thought I could contribute something with my journalism. That confluence of things is where my current journey began.
ImpactAlpha has become a cornerstone for all those interested and engaged in impact and sustainable finance. How are you thinking about growing the scope and reach of the platform and its journalistic outputs?
For a financial publication level, the scope of ImpactAlpha is kind of audacious – across all asset classes, geographies, sectors and stages. Our throughline is what we call “Agents of Impact.” Change must happen on multiple fronts, so it requires engagement from many people doing a variety of things.
Climate is obviously a big focus of ours, and we've done a ton on emerging markets and small business financing, fintech and financial inclusion, worker ownership, racial equity, community finance. Important across all of this is DEIJ. We think that representation, both in founders and in fund managers, is an essential part of impact. We haven’t made much of a point about it, but ImpactAlpha’s co-founders are a gay man and a Latina woman.
We've tried a number of different business models over the years. We had some nice sponsorships and project support at the start but found that was not sustainable. So in 2018 we pivoted to a subscription model. Fortuitously, subscriptions took off during the pandemic. We're now 75% subscription-backed. With our subscriptions, it's easier to collect audience metrics, which has paved the way for more sponsorship engagement and revenue. So today we have growing subscription and sponsorship revenues and are becoming a true multi-revenue stream media and data company.
We just raised an equity round led by the Ford Foundation for $3.3 million. We are pleased to have Ford Foundation as our lead investor because they’re mission-driven and thus a mission anchor both now and going forward. ImpactAlpha is anchored in the impact space and we're a mission-driven publication, so we wanted to find aligned investors. We wanted the lead to be somebody who wanted us to extend our leadership voice and build a growing platform in the impact world for the long-term.
As a successful LGBTQ+ founder, what thoughts would you like to leave those looking to establish and grow their enterprises?
Having a view on things that comes from a slightly different angle is an absolute strength and asset. Yes, there may be biases and challenges, but I say lean into the way you can see stuff that other people can't. That's not just on queer issues; it's just by being a little bit of an outsider. It’s a competitive advantage in a world of conformity.
Megan Kashner is Co-founder of Colorful Capital and a professor and Director of Social Impact at Northwestern University's Kellogg School of Management. William Burckart is Co-founder of Colorful Capital and CEO of The Investment Integration Project, an applied research and consulting services firm that helps investors manage systemic societal and environmental risks.
This article was written with the contributions of Lloyd He.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.