Apis & Heritage Capital Partners: Helping workers of color own their futures
The Apis & Heritage Team (from left) Michael Brownrigg, Natalie Edwards, Todd Leverette, Philip Reeves, Jason Ollison and Kyle Chin-How. Photo courtesy of Apis & Heritage.
Pope Francis has invited and challenged us to join the new economy, the Economy of Francesco, a worldwide movement aimed to change the current economic models and craft a future that is more inclusive and just. – FSPA Seeding a Legacy of Healing Team
Are the principles of Catholic Social Teaching present in this investment? Are we extracting more value and willing to give up return? What is the impact of this investment? What’s the cost if we don’t invest?
As an organization contributing to the solidarity economy — a global movement to build a just and sustainable economy where people and planet are prioritized — FSPA asks these questions to ensure the investment will generate positive, measurable social and environmental impact.
And after researching Apis & Heritage Capital Partner’s employee-led buyout model, FSPA’s Seeding a Legacy of Healing team members knew that they could make an impact by becoming an investment partner in A&H Legacy Fund I.
A&H is a private equity fund that buys privately-owned businesses with significant workforces of color from founders who want to retire and converts those enterprises into 100% employee-owned companies. A&H partners like to say that the first generation of wealth created by a company ought to go to the founders who took the risk and who want a return on their life’s work but that the next generation of wealth ought to go to theworkers who are building value for the company every day. And since A&H focuses on companies with large workforces of color (and low-income workers as well), the model can shift racial wealth and opportunity gaps in our country.
A&H partners and staff are mainly people of color. The intention of Legacy Fund I is to buy at least eight companies from retiring founders and anticipates converting at least 500 workers into employees/owners over the next five years. They focus on buying companies mainly in essential services like waste hauling, landscaping, elder care, commercial cleaning and food processing, although they will consider manufacturing and other sectors as well. Their scope is nationwide. At a minimum, target companies must earn net profits of $1 million and employ 50 workers, one third of which being people of color. Forty years of economic data show that compared to their peers, employee-owned companies are more resilient and likely to stay rooted in their communities; have a greater capacity for profitability and productivity and provide environments for work that are more satisfying.
After A&H acquires a company, they and their partner, the Democracy at Work Institute, provide support and training to create an engaged and empowered workforce and enlightened management team. And while employee ownership’s big payoff for workers comes when they retire, A&H also looks for ways to improve jobs today: paying weekly instead of every two weeks and bumping pay scales, creating family-friendly scheduling or improving benefits. Providing workplace culture that honors all voices with the belief that everyone can contribute is part of the A&H model as well.
On Juneteenth 2021, A&H announced its flagship Legacy Fund I first close at $30 million. We are told that FSPA’s early financial commitment to the Fund helped galvanize other investors too. A&H expects to announce its final close for Legacy Fund I at over $50 million, and it is now closed to new investors.
“We are looking to make life-changing investments with this first fund to address the significant and growing wealth gap in this country, especially for Black and brown workers,” said Todd Leverette, co-founding principal at A&H. “We’re providing a path to financial freedom for workforces of color across the United States.”
Added A&H Co-Founder Phil Reeves, “While there is a myriad of ways to manage wealth in America, there are really only two ways to begin to acquire wealth here: you can own your home, or you can own your business. We are focused on the latter, especially for workforces of color, which have been shut out of the benefits of equity ownership for so long.”
Michael Brownrigg, another founding partner, puts the impact case this way: “Today, two-thirds of Black and Latino workers retire with zero savings from work. This lack of savings, or wealth, is why so many seniors and families are just one unexpected medical bill away from losing their home; it is why families don’t have the resources they need to invest in their children and grandchildren. Whereas, the average worker who retires from an employee-owned company will have close to $150,000 in savings, which can be life-changing and which can, over time, begin to address not just the racial wealth gap but also intergenerational poverty.”
Franciscan Sister of Perpetual Adoration Catherine Kaiser adds that “Other religious communities and Catholic impact investing networks have ventured into impact investing and are joyfully and openly sharing what they have learned. This is jumpstarting our capacity. We are impressed with all the opportunities and the commitment to transforming economies for people and the planet.”
Ayanna Banks is a 20-year employee at Recology Waste Hauling, a $1 billion revenue, employee-owned enterprise operating on the West Coast. In a webinar on the benefits of employee ownership, Ayanna said:
“I was a single parent coming in. With the Employee Stock Ownership Plan it helped me a lot. You know, we can’t take out of the ESOP, but you can show your statement as a form of income that would help you to get loans, to purchase a home. So, with that, it helped me put my oldest daughter through college and now my youngest is at Xavier University studying to be a lawyer. It gave me that stability to help them grow even more, and to educate them more, and have a sense of what you want to be in life.”
Susan Hoop: “For me, being at an employee-owned company meant everything. I was a single mom, with two kids, no child support, no help. I worked at one job, with no benefits or anything. Coming to Recology made my dream come true. Working for an employee-owned company, knowing I have benefits, knowing I have an ESOP. In the ESOP they put shares into your account, and when I look at it today, I think I couldn’t even put $5 into a savings account even if I wanted to, and some days I look at the ESOP and I almost have tears in my eyes thinking, I could never have put that money in that account. And I know if something happens to me, my kids will be OK.
Apis & Heritage’s online resource library is full of books, articles and presentations that have shaped their work and helped them see the world a bit differently. They partner with the Democracy at Work Institute to share real-life employee ownership stories. Visit apisheritage.com to access the library.