Antony Bugg-Levine, co-founder of the Global Impact Investing Network, recently published a new book: Investing in America. The book features multiple stories of employee-owned firms and lessons for employee ownership advocates.
🥃 Top Shelf Insights
On the importance of language that invites people in, from someone who helped coin the term, impact investing: “We too often use language that prevents people who could be our allies from working with us…I just think every minute you spend debating definitions is a minute you’re not spending figuring out how to get more workers the capacity to own the companies they work in.”
On connecting with other movements: Growing employee ownership “has to occur within a much broader shift in how our society understands the role of capitalism and ownership in general. For centuries, the right to incorporate a business was given as a privilege in order to enable groups of people to come together to invest in something that was good for society…We just happen to have lived in this weird time in history where that’s been forgotten.”
On finance as the obstacle to the growth of employee ownership: “I think this is one of the main reasons why employee ownership is stalled. The challenge of the financing of employee ownership is how to create a level playing field, in which workers have the same access to financing the way the private equity guys, the strategic buyers, and the rival companies do…It’s just the workers are shut out of that.”
On the importance of market shaping and crowding in mainstream capital: “If your vision is a world in which every worker has a chance to buy their company, then let’s do the math: What would it take to finance the acquisition of every company in America and transition them into employee ownership? The numbers would get into the trillions… At the end of the day, you are going to have to get financing from people whose motivations are not impactful, but who simply want to make reasonable investments… where the structures have been created around them so that is a logical decision for a profit-maximizing investor to do.”
The Interview
In addition to co-founding the Global Impact Investing Network. Antony Bugg-Levine is a senior fellow with LSE’s Marshall Institute and fellow with Renaissance Philanthropy. His earlier book with Jed Emerson, Impact Investing, remains a staple in impact investing courses around the world. And he just published a new book, Investing in America: Expanding Access to Finance to Solve Our Shared Challenges, which includes stories of—and lessons for—employee ownership. Below is a condensed version of the full interview, which you can find here.
Kate: Antony, how did you come to employee ownership?
Antony: I worked with the South African Human Rights Commission, right out of undergrad in 1998, two years after the new constitution was approved. It really crystallized for me this realization that even though on paper we were the freest people that the world had ever known, in reality, because those people in that community had no economic power, they had no ability to realize their rights.
Economic power without a strong constitution doesn’t give you freedom, but neither does a great constitution with no economic power, in the capitalistic systems we live in.
The more I learn about employee ownership, the more clear to me that this is a public policy miracle. The data’s really clear: It’s great for employees, when it works, it’s great for the people selling the companies in the U.S. because of the tax breaks if you’re using an ESOP, and in other ways with other structures. It’s great for the economy. It’s great for our democracy.
So that’s why I’m excited. And the question I keep getting is, why is this not bigger? With a lot of other policy issues, that’s not the first question. The question usually is, does this really work? Can it work, who wins, who loses? But the question I keep getting with employee ownership is, why is this not bigger, and we should get into that.
Economic power without a strong constitution doesn’t give you freedom, but neither does a great constitution with no economic power, in the capitalistic systems we live in. - ABL
Kate: We definitely will. But this is the perfect segue into your new book, Investing in America. Tell our readers about it, why they’ll find it as compelling as I did.
Antony: Yeah, thanks so much. People will ask, “What does it mean to invest in America?” I’m talking about the act of using for-profit investments to expand who has access in this country, to turn their towns, hard work, and opportunities, into progress for themselves, their community, and our country.
And to answer the question, what does it mean to invest in America, I will go back to Benjamin Franklin. In 1789, Benjamin Franklin is living in Philadelphia. He’s just returned from years in Europe. Months after the Constitution of the United States gets passed, he amends his will where he creates a loan fund to enable workers to become owners. It’s amazing. You can see it in that incredible 18th-century handwriting. Or you can read it in more of a legible form.
Now 83 years old, he writes that when he came to Philadelphia as a young man, two friends arranged a loan that allowed him to start his own print shop. He describes a loan as the foundation of his success and all good that can be ascribed to him. So he took £1000 sterling in Boston, and £1000 sterling in Philadelphia, and created revolving loan funds to provide start up capital for new businesses.
So this idea Benjamin Franklin had, that you could completely transform the life trajectories of people just with a small startup loan, given to the right person at the right time–That’s the spirit of Investing in America.
And it’s not just around giving workers’ loans to start businesses. It’s also about providing non profits with loans to buy 100,000 acres of forests in the Appalachians, which they can then steward for multiple generations. It’s about getting people, who can’t qualify for student loans because they don’t have parents to cosign, a non-exploitative loan that allows them to finish a four year college degree. It’s about getting homeowners who can’t afford a 20% down payment, an investment partnership that allows them to buy their first home in an affordable way, and own at least a part of an appreciating asset.
So the book is about that spirit of operating like Benjamin Franklin did, and finding innovative ways to provide fair financing, so that people can turn opportunities and hard work into progress for their families, their communities, and our country. It’s happening all over the country, and it’s a powerful tool we need to harness, to solve a set of national challenges that most of us can agree on. This isn’t about being Democratic or Republican, or coastal vs. heartland.
Kate: Let’s get into the financing of employee ownership. You have a chapter in the book on protecting our natural resources where you observe that, “Solutions often require upfront costs that few community members or service providers can afford while generating long term financial benefits that they cannot wait for.” How do you think about that same lag in the employee ownership space and the patient capital required in transitions?
Antony: This is the heart of what I mean by Investing in America and it’s the same with employee ownership. I think this is one of the main reasons why employee ownership is stalled. The challenge of the financing of employee ownership is how to create a level playing field, in which workers have the same access to financing the way the private equity guys, the strategic buyers, and the rival companies do. They have connections to institutional investors, or they can go get a bank loan or issue bonds. So, it’s not that other people aren’t finding ways to finance these acquisitions. They are. It’s just the workers are shut out of that. Most owners, with all else being equal, would rather sell to their workers than any other scenario. So the financing question isn’t the only answer to what we need to do to expand employee ownership, but it’s certainly a big part of it.
Kate: What else do you see?
Antony: A lot of people have been doing a lot of work on this for a long time. Awareness is an issue. We certainly need to expand the understanding in our country that this is a viable option for more people.
It also has to occur within a much broader shift in how our society understands the role of capitalism and ownership in general. In the history of capitalism, it is not normal to assume that the only purpose of business is to maximize financial returns, that there is no obligation of a business owner to its community. For centuries, the right to incorporate a business was given as a privilege in order to enable groups of people to come together to invest in something that was good for society. So there was an understanding that the corporations should exist, not just to enrich their shareholders, but also to create some better social purpose. We just happen to have lived in this weird time in history where that’s been forgotten.
So I think at a very high level, we just need to reconnect this idea. I like the phrase shared prosperity, and this idea that we have both an obligation and an opportunity in America to share the prosperity of this incredible economy more broadly. If that again became a more dominant foundational part of how people think, then that’s more fertile soil for that employee ownership seed to be planted.
There’s a growing number of investors who recognize that they want their own capital to not only pursue maximization or financial return, but also to have some other utility in how it helps create the world they want their kids to live in. And that’s certainly something we can harness.
In the history of capitalism, it is not normal to assume that the only purpose of business is to maximize financial returns, that there is no obligation of a business owner to its community. - ABL
Kate: Something else we could harness: In your book, you describe CDFIs (community development financial institutions) as lenders with unique strengths. They can structure flexible loans, They understand how to operate in chronically under invested communities. Seems like a really good fit for employee ownership. Where are you seeing CDFIs and employee ownership already connecting, and where could they connect more? [Ed. note: Antony ran Nonprofit Finance Fund, a CDFI lending to nonprofits, from 2011-2021]
Antony: CDFIs exist to fill gaps left behind by mainstream lenders, who historically, and for profit-maximizing reasons, systematically underinvest in certain places and people in this country. CDFIs came out of the civil rights movement, to help close the racial wealth gap in America.
That history is really important. Part of the answer to your question –what’s it going to take for CDFIs to be more effective and to be part of the movement to grow employee ownership– is to reconnect to the spirit of the origins of the CDFI movement.
It was a movement about political liberation, and it was staffed by activists. Then they started working as the intermediaries of the banks. As a result, the people who lead a lot of the larger CDFIs, especially, are a different kind of person than they were a generation ago, because they are professional bankers. To be frank, many of the institutions they run are now less easy to distinguish from what the major banks are doing.
So there are huge opportunities to connect the liberatory spirit that underpins part of the employee ownership movement, with the history and the spirit of the community development financial institutions, and to have those CDFIs be engines of innovation and collaboration, and figuring out new ways to solve the financial challenges that limit the expansion of employee ownership.
I don’t think the burden should fully fall upon CDFIs, partly because they’re not as well capitalized as the very large banks and some of the other investment firms who, for that reason, should also be able to innovate.
People in CDFIs should absolutely be able to find common cause with the people in the employee ownership movement, because they are similarly people who are trying to harness capitalism to bring community outcomes, to close gaps, and to share prosperity more broadly. I suspect there must be CDFIs that are doing interesting things in employee ownership. I just don’t happen to know them. But I do think the employee ownership movement will be well served, as well as the CDFI movement, as will the impact investing movement, if everyone can just figure out how to work together, and make an effort to get out of our silos.
People in CDFIs should absolutely be able to find common cause with the people in the employee ownership movement, because they are similarly people who are trying to harness capitalism to bring community outcomes, to close gaps, and to share prosperity more broadly. - ABL
On the Language of Employee Ownership: A Critique
Antony: The chapter where I talk about employee ownership in my book isn’t called, “We Need to Close the Racial Wealth Gap and Expand Good Jobs,” although I believe those things. It’s called, “Everyone Should Be Able to Earn Their Own American Dream.”
I am trying to be bipartisan, because we too often use language that prevents people who could be our allies from working with us. And I’m also trying to speak in ways that don’t require a finance degree or an insider status in the employee ownership movement to be understood. The starting point of broadening our movement is finding ways to work together with people who agree with us on this, even if they don’t agree with us on everything.
In the book, I write about 70 different innovators, who are investing in America, operating in 42 states. One of the things that really stands out about them is their ability to, within their organizations, bring together people with diverse backgrounds –professionally, not just from other identities– and to work together across differences, whether it’s a business person or a government, someone from New Hampshire, or Missouri, which is just something that fewer and fewer Americans are doing well right now.
The starting point of broadening our movement is finding ways to work together with people who agree with us on this, even if they don’t agree with us on everything. - ABL
Kate: What have you seen with the language in employee ownership? Where are we strongest at drawing people in, and where are we maybe getting in our own way?
Antony: Employee ownership is a gift. It’s a rhetorical gift, a political gift because, unlike almost anything else, it has in its fundamental form, the ability to be attractive to so many people in this country. And I feel like we’re squandering the gift when we do a set of things, that we can talk about, that do not make this as universal as it could be.
So the first thing is just getting really clear on the language. I keep coming back to this phrase, you know, how do we share prosperity more broadly? That, to me, is the best field tested phrase that can be bipartisan that I’ve heard. Jim Sorenson first told me that. And so I do think it’s starting from that core language, but is also the thing that really gets me frustrated about employee ownership. And again, I’ll speak frankly. At The Stakehold, I feel like I’m with family.
It’s the schismatic focus of efforts. It’s the time people spend debating what is and what is not ownership. At what point is ownership pure enough to be called ownership? Pete Stavros sends out a LinkedIn post about some new deal he’s just done, and then suddenly people rally behind this idea that, how dare you use the word ownership? Well, is it not a good thing for us that a very effective communicator is on 60 Minutes talking about the power of employee ownership to improve how capitalism operates in America? I just think every minute you spend debating definitions is a minute you’re not spending figuring out how to get more workers the capacity to own the companies they work in.
If you look at it from the outside, it’s a bunch of people who share a ton more in common than they do differences, who are basically rowing the boat in the same direction. And outsiders look at these debates like, what are you guys even fighting about? Because while we fight, we remain this peripheral, tiny part of the economy. So, instead if we could find ways to work together and support each other, grow that small thing into something super significant, and then let’s have the debates. But they’re very self-indulgent right now.
So that’s more of my critique. As for what we can do? Again, what a gift we have: The worker testimonials. It’s got to start from the narratives. The work we do is far more interesting than discussions we normally have about it. One of the reasons I wrote the book was to close that gap.
The most exciting thing you can do about employee ownership is to get people who are employee owners to describe in very personal ways the incredible differences this has made in their lives, the lives of their families and their communities. - ABL
Market Shaping for Employee Ownership
Kate: In Investing in America, you make some observations about how the market, if left to its own devices, might not invest in some of these places. What market shaping do you think employee ownership needs based on what you’ve learned about the ecosystem?
Antony: This really goes back to the work I did, where we coined the term impact investing back in 2007 and the work I’ve done the last 20 years. It’s a very simple observation, which comes with no judgment: The vast majority of the capital needed to solve problems generally, and in our specific case, to finance employee ownership transitions, sits in for-profit capital markets, where investment decisions are made with mandates or expectations that they will maximize the financial return against reasonable risk.
So how do we raise more and more money so that there is financing available to employees to buy their companies? You can go to people who value the fact that employee ownership creates social impacts, impacts they are willing to pay for, while accepting a for-profit return that’s below market rate. Those are the impact investors. And there’s no reason why employee ownership should not get its fair share of that money.
The latest report from the Global Impact Investing Network, which came out yesterday, said that there’s $1.76 trillion dollars around the world of impact investing, which is money intentionally being invested for social purpose. If that number’s right, then there is around $200 trillion of money that is simply seeking for-profit market-rate returns. And so, it’s just a question of scale.
If your vision is a world in which every worker has a chance to buy their company, then let’s do the math: What would it take to finance the acquisition of every company in America and transition them into employee ownership? We should run those numbers, but it’s certainly more money than we have in the pockets of impact investors.
The numbers would get into the trillions. Employee ownership is very capital intensive. It’s expensive to buy the company. At the end of the day, you are going to have to get financing from people whose motivations are not impactful, but who simply want to make reasonable investments, and that’s where this idea of market shaping comes in.
The idea that, ultimately, what an investor who simply is making for-profit investment allocation decisions, is going to decide to invest in, is not simply going to be because of a business plan. There is a whole set of market shapes that will steer their money, i.e. tax privileges, subsidies.
Our government in the 1950s recognized that, left to their own devices, banks will not lend to the number of small businesses that society needs. So the government created the Small Business Investment Corporation and 7(a) lending programs that, between them, now mobilize $100 billion for small business investment. You can definitely make the same case for employee ownership, which is what the AORA bill does, for a similar structure. It simply says, just as society is better off when we lend to small businesses and help shape a market that allows banks and investment funds to do that, the same will be true for employee ownership.
So putting that all together, it’s a question of, what do we do to create the conditions in which investors –i.e. pension funds, insurance money– will make investments, will find ways to provide capital to workers so they can buy their own companies, where the structures have been created around them so that is a logical decision for a profit-maximizing investor to do?
And one thing I talk about in the book is, we’ve done this in our country before. It is not unprecedented in US history, the government working with citizens and with mobilized businesses. We have had similar visions and pulled them off, as audacious and crazy as they might seem at the moment you describe them. The example I love to talk about is what happened in the housing market in the 1930s.
We have this affordability challenge in America right now, but sometimes we forget that there’s also this incredible miracle in the American housing market, which is that 60% of us own our own homes.
Having a home that appreciates in value is the only way most middle class people in this country have been able to hand wealth down to their children. That didn’t happen because of a free market. It happened because in 1933, the Roosevelt administration came in with the ambition to fundamentally transform housing and home ownership in this country. And they did it through a partnership with the banks that created, among other things, the long-term fixed rate mortgage.
Something similar is going to be needed in the ownership space if we are serious about solving the problem or capturing the opportunity at a massive scale, if we are serious about living up to the visions that we say we have for the economy we want to live in. There’s no way to get there without financing that transition because most business owners are not going to sell to their employees with a 20-year seller’s note.
We’ve done this in our country before. It is not unprecedented in US history, the government working with citizens and with mobilized businesses. We have had similar visions and pulled them off, as audacious and crazy as they might seem at the moment you describe them. - ABL
Kate: What’s your perspective on investing in communities vs ownership by communities? For instance, could Opportunity Zones be pushed to play a larger role in the transfer of ROI-generating ownership, instead of going to outside investors?
Antony: The new Opportunity Zone designations just came out. They’re taking effect in January. That program is now permanent. Like many other things in our government, it is both an advance and an imperfect program. And the thing about policy advances in America is, you don’t win the moment the bill gets signed. There’s a huge amount of organizing that happens among private citizens, for-profits, nonprofits, individuals, churches, and others who take advantage of these bills. They have to ask, how can they be relevant to our communities?
I do think there’s a really interesting opportunity for the ownership movement to look at the tax incentives created by opportunity zones, and ask ourselves, what could we do to harness those tax incentives, to create the conditions in which they can not only move outside wealth into communities that then buy up properties, which is largely where that investment incentive is going, and rather really increase the amount of businesses that are thriving those communities, hiring people from those communities and ultimately providing them with an ownership stake.
I don’t think that it’s inevitable that the opportunity zones will lead to that benefit, but it’s certainly an interesting area for people to explore and figure out ways to harness that kind of legislative change for the purposes that we want to see.
What’s Next in Ownership?
Kate: To close out, I’m curious what other ownership threads you found yourself wanting to pull as you were writing this book.
Antony: Before I wrote Investing in America, the first two-page draft of a book idea I had in the spring of 2025 was actually going to be a book on ownership, where employee ownership could be one vertical among many. The broadest question to me, which is super exciting, is how we can reconfigure ownership across multiple facets in our society.
These [three questions] all feature in Investing in America: How can more Americans own a piece of the place in which they work? How can more Americans own the homes in which we live? How can more Americans own the markets, whether it’s the public equity markets or own a piece of the asset-accumulating engine that is the American economy?
Those three would certainly be part of book on ownership, but there’s also a lot of other cutting-edge ways in which ownership is starting to show up. Certainly with technology and the information economy, the question of how to own the ideas you create is an interesting one. And how do you own all the data you are inputting as AI models are being trained?
So it’s not just intellectual property for people who have the opportunity to formally write a book and publish it. More broadly, it’s all the work we are doing every day to help those models become smarter. How do we own a piece of that? On a health front, how do you own your genetic information as well as the other aspects of your body, that the pharmaceutical industry and others are now able to turn into financial value for themselves?
And then there are the forms of knowledge that in an AI world become monetizable, i.e. cultural knowledge, the ways in which we work. All of that is something that is going to be taken by others and turned into products that can make money. And the question of how we own those is really fascinating. When you look into the future of how our economy is shifting from an industrial economy to a knowledge economy, what is the next manifestation of that, and what form does ownership need to take?
In creating an economy in which prosperity is more broadly shared, we’re going to have to get more creative than simply saying wages need to be better, although they do, and jobs need to come with better benefits, although of course they do. People also need to be able to own equity in this new economy. We need to own other aspects of the way we live our lives. It’s a fascinating area with huge potential for the future. - ABL
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This >>> "Economic power without a strong constitution doesn’t give you freedom, but neither does a great constitution with no economic power, in the capitalistic systems we live in."