Michael McAfee | Rewiring Corporate America To Advance Racial Equity

Jennifer Tescher:
Welcome to Emerge Everywhere. I’m Jennifer Tescher, founder and CEO of the Financial Health Network. For two decades, I’ve worked with leaders across industries to answer one central question, how can we make people’s financial lives better? Now I’m sharing these conversations with you. Listen in to hear how these visionaries are rewiring our society to support financial health for all.

2024 marks the 20th anniversary of the Financial Health Movement. And so for this season of Emerge Everywhere, we’re focusing on the progress we’ve made and what lies ahead, the headwinds and tailwinds that may impact our progress and what we need to do about those. In this episode, we’re going to talk about the role of equity. We’re going to discuss the role that companies play in advancing racial and economic equity and how to embed equity in corporate America’s practices so that everyone can participate and prosper. Joining me for this conversation is Michael McAfee, president and CEO of PolicyLink. PolicyLink has historically focused on changing government policy, but under Michael’s leadership, the organization has set an even more audacious vision that all sectors of the country, including the private sector, have practices in place to ensure that the 100 million working poor Americans, Black and white, can reach their full potential.

Michael, welcome to Emerge Everywhere.

Michael McAfee:
It’s a pleasure to be with you.

Jennifer Tescher:
I know both of us are really interested in talking about corporate America and their role in driving towards equity and towards equitable financial health, but you have done so much as it relates to equity, not just in corporate America, and PolicyLink is such a storied organization. So I want us to back up and set a little context for this conversation before we dive in. So equity appears to have been your North Star for really your entire career, long before you joined and ultimately became the CEO of PolicyLink. Why is that? Where did that come from? Where did that drive or that anger as I’ve heard you talk about it come from?

Michael McAfee:
Well, thank you for recognizing that this is my soul work, and I found my soul work very early in my life, even before I knew there was the word equity, but it comes out of my family’s story. My grandfather and the family, they were ran out of Mississippi because he struck a white man who would not pay them after picking cotton one day. And that’s a death sentence. And so my family is from Mississippi on my mother and my father’s side. And so I grew up with those stories of oppression, the lived experiences of it. I would watch my dad’s energy cower a little as he would tuck his pistol under the seat every summer as we would drive from Kansas City to Mississippi to play with my grandmother and hang out.

And I always resented that and I said I would never do that when I grew up. But I also watched so many in my family be absolutely brilliant people and never have the opportunities. My dad didn’t finish high school. He was probably one of the best mathematicians that I’ve ever known. And so I grew up in that world where it didn’t matter if you were brilliant and talented, most folks were going to end up working a factory job, never fully being recognized or deemed even worthy to even ascend to management in those positions. And that’s the world that I grew up in. And then it also didn’t help that my family was always able to cobble enough money together to send me to private school. They took me out of public school when the school started busing people.

And so I lived in two worlds. I could see that there was another world where there was opportunity and things like that, and then I would go home in the evenings. And so it was a blessing for me to be able to be exposed to that. But it was also a curse because so many of my friends in the neighborhood weren’t. And so even as I began to grow up and evolve from hearing the stories of my family, I began to really see what happens when they say your zip code is a proxy for how long you live and how well you live. And so that’s what started making me want to begin to take this work on. It’s why I left home when I was 17 and joined the military. That was me saying, well, I don’t really know what to do. Even while I went to a private school when it was career day, the counselor just pointed to a set of files with some jobs in them, kind of like examples of what jobs could be. I didn’t know what the hell to do with that.

And so my parents knew enough to say, baby, get a good education. And I saw my dad in the military and so I went home one day after going to the recruiter and said, would you sign for me to go in to the military? So I went into the military that summer between my junior and senior year, and that was my way of hedging my bets to say, until I figure it out, at least I’ll have that to fall back on. So I was trying to figure out the game very early on in my life.

Jennifer Tescher:
Wow. I appreciate you sharing that story, Michael.

Michael McAfee:
Yeah.

Jennifer Tescher:
Let’s now fast-forward a little bit, and for those who aren’t familiar, tell us about PolicyLink. Let’s start with the history. It has a long and really powerful history.

Michael McAfee:
PolicyLink is a national treasure to me, and I don’t say that just because I work here, but it is a place nearly a hundred people now where it looks like the United Nations. Some of the best smartest people in the world, smart professionally, even smarter personally and just beautiful spirits. But PolicyLink was started in 1999 as a result of Angela Glover Blackwell feeling that the DC think tanks did not carry the voice, wisdom and experience of everyday people, especially people of color, into the halls of power or into policy deliberations. And part of the reason why she felt that people didn’t do that is because hell, people can barely say Black people without having a panic attack or having to get board approval. So when your institution is formed out of the fear of being able to do the work, how can you really serve them?

And so Angela Glover Blackwell started PolicyLink and policy in the link is very important in our name. Our work, we believe, is to design a nation that works for all. That we believe that policy is the way that you do that and the link in our name is to ensure that we always stay rooted in community no matter what the color of your skin, it could be the white community, First Nations, whatever, but that when we design policy solutions, they come from the ground up. That’s how we do our work. And so that’s how actually PolicyLink was founded to be able to create policy solutions that would actually work and honor that voice, wisdom and experience of everyday people.

Jennifer Tescher:
So policy is a big word, can mean a lot of things. And when I think about the challenges that Black people, people of color face in this country still around equity, it touches so many different spheres, so many different sectors. How do you approach that work?

Michael McAfee:
We approach the work very methodically and in a results-based way. I tell people, PolicyLink may be considered a progressive think tank, but I do not consider us a progressive think tank. I do not want to be an ideologue. I want us to be results-based leaders. And so we center a population and that population is the 100 million in America living at 200% of poverty, one in three people economically insecure. And the dirty little secret is that half of that population is white. And so what you can begin to see in our work is that the design of the nation is not working for a large section of white America either. And it’s not working because that anti-Black racism that designed school systems so that folks didn’t have to be educated next to me, that red-lined neighborhoods so people didn’t have to live next to me, that designed highway systems that created these islands of despair in every city across the country.

Now, if you consider it a cancer, it has jumped hosts. Now it’s just not about Black people. It infects all of us. And a real practical example of that is if I live in the Bay Area, no matter what color of your skin, you could be making two or $300,000 a year in the Bay and you’re still like, it just doesn’t feel like I can make it. And in many ways, if you have children, it really feels tough because we gave up on the public education system. If you read a book like The Color of Law, you’ll see how we did that.

But we did that because of that anti-Black racism. And so today people who had nothing to do with that, suffer under it now because the public education product is not necessarily the best product if you have buy-in options. And so that was a policy decision that created that type of outcome, whether it’s around education, water, housing, et cetera. That’s why we deal with public policy because we believe that we’ve got to redesign this nation in its entirety so that it works. If you only do the charity aspect of the job, your charity work gets undercut every day by the crushing impact of policy decisions in communities.

Jennifer Tescher:
Wow. A few years ago you launched a campaign called Winning On Equity. Tell us a little bit about that. This will, I think, help to make tangible the work you all are doing every day.

Michael McAfee:
Yeah. If you look at PolicyLink, we’ve secured over $5 billion worth of policy wins in places.

Whether it’s designing promised neighborhoods for President Obama, a program that was designed to ensure that the time a child is born to the time they enter the workforce, they have the supports that they need. It was modeled after the Harlem Children’s Zone. We helped to design the Healthy Food Financing initiative to finance grocery stores that would go into places that didn’t have healthy fruits and vegetables, et cetera, for people to access. We’d help to design Choice Neighborhoods, a program that provides financing for mixed income communities to be developed in neighborhoods all around the country. And in spite of doing all of that, that hundred million number continues to go up. And so Winning On Equity was my recognition that what we were doing is insufficient and it’s insufficient because it was time for us to raise our gaze and to say that we need to be so bold to believe that we are founders of this nation as well, and as founders, we actually need to do deeper structural work.

I’ll give you a practical example. Grover Norquist was phenomenal with the no new taxes slogan and their impact. They changed the nature and logic of government to starve it. So today, in many instances, if you wonder why government could barely get PPE out or PPP out in a pandemic, it was because you had weakened the infrastructure so that it couldn’t serve the will of the people. Well, we need to be so bold as to think that we can change the nature and logic of government as well, not just play around the edges creating a program here and there. We need a government that is not hostile towards that hundred million, does not criminalize poverty, does not choose to take away women’s reproductive health. And until we change the nature and the logic of government, while the programs are important, they won’t produce the outcomes that we need.

So this was the stone-cold, brutal reality of being a results-based leader and looking at that hundred million and saying, you know what, yes, $5 million of policy wins is great, and all these programs are wonderful, but if government doesn’t fundamentally change at its core, we can’t get to where we want to go in terms of outcomes. So that’s why Winning On Equity was established, and you see why it’s needed ever more today. Think about it. The 14th Amendment of Protections for folks is being dismantled. When I say we need new laws and regulations, we’ve not thought about a new constitutional amendment to strengthen 14th Amendment protections.

Our landmark civil rights legislation is based in 1965, and it’s being dismantled. So Winning On Equity is about not just doing good charity work, absolutely doing that, but also saying, it’s time to do the founding work. Amend the Constitution so that it works for everyone, redesign our governing institutions so that they will actually have the heart space to actually see people, see all of people’s humanity and work in service of their thriving. So that is what Winning On Equity is about. It is time for us to finish this last mile of what the aspiration of equity was about, creating a just and fair society where all can participate, prosper and reach their full potential.

Jennifer Tescher:
Well, when I think over the last few years of President Biden’s term in office, which essentially I think follows the same stretch of time as this campaign, I think about just how incredible the success has been. I think about President Biden’s very first executive order on advancing racial equity and all of the other things that that administration has done to take a whole of government approach to thinking about equity. Talk to us a little bit more about some of the other ways that you’ve succeeded in embedding equity processes in the day-to-day work of the government.

Michael McAfee:
Well, we helped OMB, the Office of Management and Budget, create a circular guidance that would encourage legal grounding for federal agencies to strengthen their existing cost-benefit analysis to have a racial equity focus. This is huge because OMB provides the guidance to all of the federal agencies about how to behave. This is one area where we were able to provide deep federal guidance. When the infrastructure bill was launched, we helped to create infrastructure standards so that they could be applied whether you are at the city, county, state, or federal level. And so we created those infrastructure standards, and now we are working with the agencies like HUD and FEMA to think about what does having an equity consciousness look like if there is a disaster? And this was huge for FEMA to say, you know what, we can get better at making sure those hit first and worse actually are prioritized in the process.

You think about the major floods or pandemic or whatever we’ve had and catastrophes we’ve had in this country, too often the folks with the least resources wait years to be served. And those of us with insurance and other things, we’re still in the front of the line even though our insurance carriers are right there to take care of us. And so these are huge steps at changing the nature and logic of government for FEMA and HUD to say, you know what? When it comes to disposing of our properties or repurposing them, we’re going to do that with an equity consciousness. That’s what HUD is thinking about. For FEMA to say, you know what? We can strengthen our response to crises and make sure that people who are the most vulnerable are prioritized. These are really big deals. And so these are some of the things that we’ve done over the last few years.

Jennifer Tescher:
Yeah, it’s really encouraging and exciting and inspiring. And now I think we’ve set the context so we can talk a little bit now about corporate America. Where does Corporate America fit in all of this? You’ve made a really strong and impassioned case for why if we want to change the score in this country as it relates to equity, we’ve got to do so at the policy level and from a foundational place. Where does corporate America fit?

Michael McAfee:
Well, if you really want to achieve equity in America, all three sectors have to be involved. First of all, that is sometimes a tough recognition for folks in my space to want to accept. But from a market share standpoint, there is nothing bigger than corporate America. So you’re kind of being rather foolish to think you’re going to leave them on the sidelines and nonprofits are going to carry the day. That ain’t happening.

Especially because corporate America, I believe, have a superpower that we need them to use in service of equity, and that is that they know how to bend the legal and regulatory frameworks of this nation to their will. They know how to do that, and so we need them doing that for this work. And so it is essential, but it’s also essential that sometimes when we started our corporate racial equity work, our staff did not want to work on that work. So myself and Josh Kirschenbaum stood it up, because we said, well, how foolish it is that you’ve worked for 20 something years to get the world to come to your work. They’ve come to it and you’re going to sit on the sidelines now and critique them. It’s important for us all to recognize none of our institutions are perfect.

They’re all highly flawed. And so corporate America has an essential role because of their impact on the environment, their hiring capacity, their money and influence that they use to create a set of laws and regulations that either works for people in the environment or that do not. And so they are essential. And what we’ve seen is that they’ve been coming to this work. There’s always going to be skepticism. But what I can tell you, being on the road about 60% of the time and being close to leaders of all walks of life, I have never seen since George Floyd, so many leaders, especially white leaders, be on their personal journey of awakening in corporate America, civil society and government. And we’re still working with these leaders around our corporate work. Now, the thing that I always caution people when they think about equity is to remember that the work isn’t just for white America.

We all have to be willing to do our work because just as this nation is about to become a nation of color, it doesn’t mean that it gets better just because of the color of my skin. It only gets better if we have the right head space and heart space. And so sometimes there is an arrogance that can build up where we begin to think or we rely on a muscle that is too easily activated, which is let me just tell white people all the things wrong with them and what they got to do. We all have to do our work. And this is where corporate America fits into this equation. They’ve got their work to do, just like civil society, just like government.

And PolicyLink’s role is to begin to set standards for how we should govern and how corporations can do this work and do it best in class. And so that’s what we’re doing with them right now. Setting a set of corporate standards that will then be followed up with accounting practices, a legal or new regulatory framework, even reporting requirements through the SEC, so that if you don’t want to do it, eventually you’re going to have to do it. And so that’s why they are involved. They have out-sized influence in America. If they adopt things, it can change substantially, and that’s how we’ve entered the space.

Jennifer Tescher:
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So you brought up George Floyd. It was only two months after his murder that you together with FSG and JUST Capital published a CEO blueprint for race equity. You had to have started that prior to George’s untimely death?

Michael McAfee:
That’s right. So much of our work has always, it’s always started and then it meets a moment and then it can accelerate. That’s right. At PolicyLink, we don’t really respond to moments because oppression exists every day. So we don’t need a moment to respond to something. The moment gives us an opportunity to accelerate into the opportunity.

Jennifer Tescher:
Got it. So you sort of laid out the vision of where these standards could go, but let’s back up a little bit. What is this blueprint and what are these standards going to be like? What are we asking companies to do?

Michael McAfee:
So the CEO blueprint was to begin to give leaders who were really saying, what do I do, tangible ways to think about their leadership and their company and to take action. It was just guides. The standards is a step above that now.

You think about the LEED certification, there’s a standard for if you want to create green buildings. Well, we need to have a standard for how to behave in this economy that actually works for people in planet. And we really don’t have that right now. We have remnants of it. And so our corporate racial equity standards are our way to say, corporate America, if you really want to be a good citizen and you really want to serve all, here’s how you can do it without quotas, without all these things that just legally don’t work for us, but here’s how you can step into it. Here’s how you can step into it inside your firm, in community and in the broader system. There’s practical things like for example, don’t finance politicians that would make my mother stand in line for eight hours to vote and then make it illegal to give her water, and then on your philanthropic side, be given money for voter registration.

Think about how dumb that is and how harmful it is. So on one side, the philanthropic arm is trying to do good, and you’re wiping it all away by those types of decisions that are being made for other reasons. And so that’s bad practice. So we want to be able to give them standards that helps them consistently behave with the best set of values in mind. And we’re not so naive to think that standards are going to get you there alone. This is why I’m saying you need a legal and regulatory framework. So in addition to the standards, we need to change the accounting standards so that you can value the things that we’re talking about. This is that unsexy work of getting into the bones of the economy. If you don’t change the accounting practice, it’s hard for CEOs to behave the way we want them to behave because they’ve got real world pressures around stock price and other things. 

Jennifer Tescher:
And so ultimately, how do you think you’ll hold companies accountable? Is the idea that ultimately this is just going to be required as part of the things that companies have to do to report publicly?

Michael McAfee:
It’s going to be a wide variety of ways. One, when the standards are done, think about all the shareholder activists out there now who have a North Star, who can focus their energies now on holding an organization accountable. So for the activists out there, there’s a way to organize the energy of the activists in a way that we don’t have right now, but as we work with the SEC around reporting requirements, this is the work that we’re going to have to do. Think about if companies could only form adhering to a set of these standards. What you really hear me laying out is 20 plus years worth of work, this isn’t going to happen just because we create some standards and it’s good stuff.

We got to wade into the white water of democracy and make this stuff happen for real. And so we’re in the early days of creating, this is our way of acting like founders, as you heard me describe earlier, by beginning to do this work. So we think some companies will come to it. There’s places like Forbes and others who do all of their lists that we think as we do these standards, you’ll start seeing people be listed. I hope the standards will become a part of that type of public recognition. And then if that doesn’t happen, we want to create the legal environment so that folks can take action if a company does go into a place and does harm. Today, you don’t have a lot of protection.

Jennifer Tescher:
Interesting, interesting. So lots of big companies made lots of commitments in the wake of George Floyd’s murder, and we can debate whether or not they achieved anything. But one thing is for sure, they’re largely over. Most companies have checked the box, if you will, and in many cases, maybe some of those commitments did some good, but they don’t really appear to have changed anything systemically within these institutions, in part because those commitments were done kind of over on the corner of the desk as opposed to really pulling it through the day-to-day processes and systems of these companies. And now given the political divisiveness in this country and the attacks on being woke, ESG, all the things I don’t need to tell you about. I think a lot of companies and executives are hiding under their desks, taking a few steps back on any issue where they might catch some public flak. What are you seeing and how will you get companies to play in these early days in particular?

Michael McAfee:
We stay focused on the fact that with what we are laying out, there’s an opportunity for you to come to it with the carrot and there’s an opportunity to come with it with the stick, right?

So we own this nation and we’re going to play as hardball as they do to make it be what we need to be. Everything that I’m describing, we’re not asking permission to do. We’re beyond those days. And that’s the beauty of why I say PolicyLink is a national treasure. We have the financial strength to do what we want to do. We have the talent to do what we want to do, and we’re not afraid to just go do the work. And we have a board that fully supports us behaving and leading responsibly. And so these environmental moments tragically are going to come and go, but here’s what I know about where we are at, and this is why I always say to people, All those people who said, you know what? I don’t have any dog in that fight around women’s reproductive health.

Oh, now that your eggs are being threatened with the new IVF policy in Alabama, tell me about it. You see, now you’re starting to scrape against upper middle class, high income folks now, and you’re starting to mess with their liberties. See, this is why equity is not going anywhere. You cannot say the words. You’re going to come right on back to PolicyLink and say, please help me, please. Right?

That hundred million number is going to keep going up. It’s going to continue to create market stability. Think about our down towns today. Most of us are scared to go into them. Businesses are saying, please help me, I can’t deal with the crime. So you’re going to come to this work one way or the other. You might as well go on and step into it now or come crawling on your knees, but you’re going to have to do this work in America. And the thing that is so tragic about this country is that it has never asked itself the question, A nation that was founded on stolen land, slave labor and genocide, what is the natural conclusion of what does that look like when it runs its course? We’re seeing that now. 50 million white people are struggling in this nation in that hundred million that I described.

It’s not sustainable. It’s not working. So I laugh at people who think that they can kind of just ease on away from the table and not have to deal with equity, or they’re not going to say the word, all I got to do is just sit back and let life happen, and you’re going to come knocking back on PolicyLink and others’ doors to say, can you please help us with this work? And that’s the tragedy of it all, is that I know for a fact someone else is going to get shot. There’s going to be another calamity, God forbid, but there will be, and the work will get centered again.

Jennifer Tescher:
You said earlier that this is 20 year work, that this is a very long time horizon, but you also said at the beginning that you are results focused, deeply results focused. How do you know that it’s working? How will you know along the way, I know it’s going to take a long time, hopefully less time, but it will take time. How do you know if it’s working?

Michael McAfee:
Sometimes you know and sometimes you don’t. And that’s just the honest truth. The reality is there’s always a way to measure our work. At a basic level, you could always measure how much you did, how well you did it. That’s quality and quantity. The real question, is anyone better off? That is the ultimate question and the difference made, those are the questions that we’re always trying to get to.

Jennifer Tescher:
Totally.

Michael McAfee:
We can tell how many people are signing up for our standards pilot in corporate America, and we’re getting the feedback. In our racial equity surveys we can see how much market share we have out there, people that are with us today, it’s around 18%, which is a big number given the size of the equity sector. But we need to get that number up to 30 to 40%. And then you’re going to start seeing a real tipping point where things will happen. So there’s always a way to measure our work, but there is also a randomness to it all. The thing that you thought might do it, might not do it. And so what I always tell people is our best laid plans are always going to go awry. The North Star has to be the focus on the result. This is adaptive work, and leaders that are doing adaptive work need to just understand the reason why it’s called adaptive. The answer is unknown, and it’s not a technical solution that gets you there. But having said that, we measure every single thing that we’re doing.

Jennifer Tescher:
Of course.

Michael McAfee:
We know the indicators that we’re trying to move. We know how we’re moving them and where they’re not moving. We have a learning agenda that is born out of that. But what I also know is the nation is making progress. So if you were to say, how do I really know that this is going to happen? You’ve never had a more beautiful multiracial coalition who wants this work. At the same time, you have a multiracial coalition that wants something very different in America. But what I’m becoming more excited about is the folks who say they want to create a loving, caring nation are starting to resist the urge to run and hide. I tell folks all the time, it’s time for us to stop working in the shadows. Why are we ashamed of this work? Why are we ashamed to say equity. They get to participate in this democracy freely, and so do we, or not. And our job is to stop begrudging them and to do what we can do. And that is our biggest barrier. The reason why we’ve lost the word equity right now I feel in this moment is because we’ve never defended it.

I think about so many places I’ve gone or Angela Glover Blackwell has gone and someone said, Hey, Michael, we talked about equity last year, you mind not talking about it this year. Or, I don’t know if I can say race or Black people. Well, how can you win on your issues if you are afraid, you’re afraid to say poor whites for God’s sake. But that’s changing. I see the progress. I see the momentum. You recently think about it when you asked, some folks are stepping away from equity. Robert Wood Johnson Foundation and 80 foundations just came out and said, Hey, we’re down with reparations. What?

Jennifer Tescher:
Yeah. Wow. That’s awesome.

Michael McAfee:
You see my point? That was just like two weeks ago. 80 foundations in this political environment have gone beyond the word equity and talking about reparations for God’s sake. That’s progress. And so this work will not be completed in our lifetime. That’s the thing that I have made peace with, but I find joy in it because every day there’s a thing like that that you can witness and you’re like, wow, just five years ago, that would’ve never happened. And here we are.

Jennifer Tescher:
I would like to keep listening to you all day as I suspect my listeners would. But I think this is a good place to end our conversation. Michael McAfee, thank you so much for joining me on Emerge Everywhere and for doing the incredibly important work that you’re doing.

Michael McAfee:
It’s an honor to be with you. Thank you.

Jennifer Tescher:
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