Inventing New Ways to Solve Old Problems

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With Illumen, Mr. Dodson aims to invest in private equity and venture funds, with a caveat: Managers must agree to undergo training to reduce implicit bias that may be creating blind spots in their choices of employees to promote and companies in which to invest. Illumen focuses on so-called impact investors: Those who aim not only to make a return on their money, but also to spur social or environmental changes.

Implicit bias refers to assumptions and stereotypes that may unconsciously affect decision-making. In the financial context, Mr. Dodson said, unexamined attitudes may, for example, cause fund managers to pass uppromising investment opportunities if a company is headed by a woman or a person of color.

“Unless you’ve thought about reducing bias,” Mr. Dodson said, “you may be leaving money on the table.”

Mr. Dodson, 39, has spent the past seven years as a consultant to the board of the Calvert Funds, a $12 billion pioneer in the field of socially responsible investing.

Mr. Dodson, who grew up in Washington, D.C., said working to broaden financial opportunities had been the focus of his career.

Illumen’s approach is to use research-based interventions developed in partnership with Stanford University, Mr. Dodson’s business-school alma mater, to help investors avoid race and gender bias. Illumen expects fund managers to commit to three years of training and analysis, he said. “He knows this is a marathon, not a sprint,” said Jeffrey Pfeffer, a professor of organizational behavior at Stanford’s Graduate School of Business.

Illumen also has a nonprofit partner that offers “impact experiences,” in which investors and fund managers spend time in communities to better understand the context in which their investments are made.

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