As part of my series about the “How Business Leaders Plan To Rebuild In The Post COVID Economy,” I had the pleasure of interviewing Timothy Flacke.
Timothy Flacke is the Co-Founder and Executive Director of Commonwealth (formerly D2D Fund), a mission-driven organization that builds solutions to make people financially secure. Tim helped launch D2D in 2001 and has served on the organization’s board of directors since that time, drawing on twenty-five years’ experience in the non-profit and private sectors helping working people to build savings. Under his leadership, D2D has grown from a start-up social venture into Commonwealth, a nationally recognized innovation incubator that partners with leading financial service firms and receives support from the world’s most respected philanthropic foundations. Before Commonwealth, Tim worked as an independent consultant, author and grant writer in the field of financial empowerment and asset development. He served as a VISTA volunteer in rural Vermont, and earlier in his career, held leadership positions in corporate human resources and risk management for Filene’s Basement, Inc. He holds a Masters in Public Policy from the Kennedy School of Government at Harvard University and a Bachelor of Arts in Philosophy from Boston College.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I took an eclectic path to my role at Commonwealth. I spent some time in corporate America at the start of my career, but always aspired to do work with a purpose that was consistent with the values of my upbringing. This led me to policy school, with the goal of combining my sense of purpose with the skills I’d developed in my corporate roles.
It was there where I met my co-founders. We shared a desire to combine our technical expertise with our hearts, in the service of a powerful idea — that financial well-being for working families is not just about income, it’s about what you own, about assets. I came to this having run employee benefits, including a retirement savings plan, for a large retailer, and worked on the ground in a low-income community to develop a matched savings program. While in graduate school I was fortunate to meet then Harvard Business School professor Peter Tufano, now Dean of Said Business School at Oxford University. Peter was applying his financial engineering skills and entrepreneurial drive to make matched savings possible at scale for working families. Our first Executive Director, Jeff Zinsmeyer, brought experience both as a banker and community organizer. We were an unusual combination.
We each brought strengths and experience to the table that allowed D2D Fund, now Commonwealth, to be credible with both some of America’s largest institutions — national banks, employers and financial technology companies — and on the ground in low-income communities.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
While not a funny mistake, we faced an enormous curve ball in the first few months after we started Commonwealth. We got going in the summer of 2001, which of course came to an abrupt end on September 11th. Overnight, the world changed dramatically, and without warning. While the COVID-19 pandemic is a different situation, I see some parallels. For business leaders and those of us at mission-based organizations as well, the first half of 2020 has been as unexpected — and world altering — as 9/11. In both cases, events force us to re-examine our priorities.
And as natural and important as it is to reassess in the face of crisis, it’s also critical to keep a focus on your purpose. I learned that through the fall and winter of 2001. At the time, prospective funders re-focused on national security and understanding the root causes of terroism, which was disheartening. But we came together to work on an important idea — what we saw as really fresh thinking about how to attack financial insecurity — and letting go of that to try to adapt to the changed environment post 9/11 would have meant losing our biggest asset, our passion and convocation. There’s something to, instead, getting scrappy and creative as the world changes, holding steady to your vision and mission, digging in and finding a way to hold on till the climate improves..
We spent our first summer without an office, squatting in a fancy brand new student building at Harvard University. Certainly, starting an organization dedicated to helping financially vulnerable people in the pinnacle of “elite establishments” felt a bit strange. But it allowed us to bootstrap through a time when the nation was focused on something else because we knew that financial insecurity mattered to tens of millions of Americans — and interest in our work would return eventually.
For businesses thinking about how to reopen and rebuild, it’s also important to recognize that the nation may have new priorities — and ask if there may be opportunities in that shift. From our perspective, financial security has moved to the forefront of the nation’s consciousness as tens of millions file for unemployment and the lack of emergency savings has become obvious. We believe astute financial service firms, start-ups and forward-looking employers will recognize the clear upside to focusing on this widespread problem.
Is there a particular book that you read, or podcast you listened to, that really helped you in your career? Can you explain?
There is so much great content in the world, but the wisdom that I’ve come back to most often in my career is the real-life experience I had in training to work on a suicide hotline in my early 20s. The place I volunteered — The Samaritans of Boston — was part of a worldwide network of organizations that practiced befriending: providing a caring, non-judgmental ear to listen to and absorb a little of callers’ pain or loneliness. The skills and values they taught have come up in my work (and personal) life over and over — even while it’s a lifelong challenge to practice them. How to listen closely. How to ask questions with genuine curiosity, in a way that enables people to open up. The value of being direct on critical questions. The value of suspending judgment. The importance of trusting people to make their own choices. The need for empathy.
Extensive research suggests that “purpose driven business” are more successful in many areas. When you started your company what was your vision, your purpose?
Our work is about giving families a stake in their financial future — enabling them to build some basic financial security, and begin to think about building wealth. We started the organization with the idea that achieving financial security is about more than making ends meet. It is about generating assets and having a real stake in something that will appreciate in value and build wealth over time. Twenty years later, that work continues to drive me every day.
As a mission-driven nonprofit, we have partnered with some of the country’s largest corporations and they have demonstrated that you do not need to be a nonprofit to operate with purpose. While our corporate partners are firms organized to generate profits for their shareholders, the best of them also increasingly recognize they must create value for their employees, customers and communities. This is the work we do at Commonwealth every day: we partner with business leaders and policy makers to design and build solutions that meet the needs of all stakeholders and enable them to build financial security.
And it’s not just about “doing the right thing” as an organization. For those companies that are for-profit, data shows that those who focus on ESG metrics — essentially, social good — are outperforming their peers during COVID-19.
Do you have a “number one principle” that guides you through the ups and downs of running a business?
My number one principle is to always listen.
Many founders have tunnel vision, singularly focused on an end goal, and especially when they find some success, it can prevent them from listening closely to the people around them. Because I lead a nonprofit, the people who come to work for us typically do so because they’re extremely passionate about our mission. And that often means that they have many opinions and ideas — some of which differ from my own.
I’ve learned over time that leadership over the long haul, in the face of truly complex problems for which the answers are rarely clear, really requires listening to as many of these opinions as I can. I’m fortunate to work with a pretty diverse team — socioeconomically, generationally, culturally, racially, in terms of sexual orientation, religion, immigration status — and listening means I learn, and can see an issue from additional angles. In the end, I have to apply my judgment. But doing that on the basis of as much experience and wisdom as possible seems like a win-win — I have greater confidence in my decision, and my colleagues appreciate being heard.
Thank you for all that. The Covid-19 pandemic has affected nearly every aspect of our lives today. For the benefit of empowering our readers, can you share with our readers a few of the personal and family related challenges you faced during this crisis? Can you share what you’ve done to address those challenges?
Yes, like families everywhere, COVID-19 has had an impact. My wife is an ER doctor in a community with the second highest COVID infection rates in our state. Every time she leaves for work we know there’s a real likelihood she’ll be infected. At the same time, we have two teenagers and a middle schooler — and like all parents, we want to insulate them to some degree from the worries of adulthood. It’s been a challenge to walk the line between maintaining normalcy and yet recognizing that my wife is doing really tough work on the front lines of the pandemic week in and week out.
Can you share a few of the biggest work related challenges you are facing during this pandemic? Can you share what you’ve done to address those challenges?
By far, the biggest challenge for me is the need to make sense of a new, changed world while not knowing what further changes lie ahead. We don’t know how COVID will unfold from here, and the range of possibilities is dramatic. We don’t know how quickly the economy will recover, and for whom, and how completely. We don’t know what will come of protests against racial injustice. We don’t know the results of the fall elections. Planning under uncertainty is not new. But the degree of uncertainty — across so many dimensions — does feel different, as does the feeling we’re still in the middle of some very large scale realignments and shifts. In the face of that we have to keep making choices and moving ahead with work, and continuously lift up to ask some of the hardest, most consequential questions about purpose, strategy, operating environment, etc.
All of us at Commonwealth wake each day thinking there is so much we can and should be doing. I’ve been focused on financial opportunity for working Americans for 25 years, and our mission could not be more relevant to the unprecedented financial vulnerability that an enormous swath of the country is facing right now.
COVID-19 has essentially presented a “perfect storm” for financial pain: historic unemployment and struggling businesses, on top of social and economic injustice. It is a challenge to balance the feeling of urgency to try to relieve acute suffering, and our need to stay focused on the long-term work we aspire to, to change institutions and systems to enable broad financial security and wealth creation.
I believe we’re in a long phase of time where we’ll have to constantly reevaluate our priorities. I’m also trying to hold on to empathy. This degree of uncertainty is really difficult for most of us, and it’s going to be with us for a while..
Many people have become anxious from the dramatic jolts of the news cycle. The fears related to the coronavirus pandemic have understandably heightened a sense of uncertainty, fear, and loneliness. What are a few ideas that you have used to offer support to your family and loved ones who were feeling anxious? Can you explain?
Like many people, I’ve been trying to find the positive — if unexpected — byproducts of our current situation. I am spending much more time with my family, and have a fuller view into parts of my kids lives. I spend far less time commuting. My neighborhood has been quieter — less traffic, more peace. We try to keep a sense of humor and look for the silver linings.
Obviously we can’t know for certain what the Post-Covid economy will look like. But we can of course try our best to be prepared. We can reasonably assume that the Post-Covid economy will be a trying time for many people across the globe. Yet at the same time the Post-Covid growth can be a time of opportunity. Can you share a few of the opportunities that you anticipate in the Post-Covid economy?
A major crisis — much less several crises in rapid succession — invites us to reexamine age old assumptions. It can even liberate us from outdated ideas that have become part of our unconscious world view.
As I’ve watched essential workers balance their physical health with the need to make an income, and watched protestors in communities around the country demand progress on institutional racism, I’ve wondered what social and economic problems I’ve allowed myself to see as insurmountable, immutable.
I think corporate America — and the capital markets that fund it — have an incredible opportunity to let go of the stale, false dichotomy of “shareholders or.” And of course we’ve seen business leaders move in this direction already. Imagine the worker goodwill, customer loyalty, community support and socially conscious investor backing for firms that consistently think in terms of total value creation. Imagine having a “license to operate” not just from your investors, but from all stakeholders.
To make that aspiration concrete, we believe a first step is to intentionally pursue an inclusive financial recovery post-pandemic. This means that employers, financial institutions and the government have the opportunity to create products, services and policies that ensure, as we recover, everyone benefits. Even more, it means recognizing and working to address the fact that many of us — especially Black and Latino households, and even moreso Black and Latino women headed households — were already left out before 2020. The average Black household has 10% of the net worth of the average white household. Ten percent. Many households never regained their financial footing after 2008 — and are at risk now of falling further behind.
We simply can’t afford to let this happen again — economically, socially, politically or morally.
How do you think the COVID pandemic might permanently change the way we behave, act or live?
This pandemic has shown us that we cannot be complacent, because the world can change very quickly in ways we’d never imagined. As business leaders, we need to be nimble, responsive and open to dramatic change. The incredible response across the public and private sector in the face of the pandemic has demonstrated that we have that ability. When left with no other choice, it’s possible to innovate at unexpected speeds and ways that felt impossible before.
Considering the potential challenges and opportunities in the Post-Covid economy, what do you personally plan to do to rebuild and grow your business or organization in the Post-Covid Economy?
In the post-COVID economy, which I hope will increasingly recognize the role of institutional racism and the value of justice, there’s so much need for family financial security, for real financial opportunity. This crisis has demonstrated that widespread financial fragility is a household, community and national crisis. The need is clear, that won’t be the challenge.
Our aspiration is to focus even more on institutions and systems. Individual choices always matter, but the problems we’re facing today can’t be addressed by simply expecting people to make different choices. Institutions shape the choices we have, influence which ones are natural, easy, taboo, socially sanctioned, tax advantaged, popular, affordable, etc. And institutions form systems that wield enormous, decisive power — if impersonal, unconscious power — to create our world. That’s the work now.
The wisest shapers of human history have understood the role of institutions, from the framers of the US Constitution to the leaders of the civil rights movement to advocates for marriage equality.
It’s incredibly challenging. Institutions are tough to influence, often by design. In some cases, that’s their power for good. But a window has opened, and we’ll do our level best to find ways to influence, cajole, re-engineer and support companies, organizations and government in a way that promotes financial security, creates financial opportunity, and fosters a more just world.
Similarly, what would you encourage others to do?
I hope others will follow this same playbook, especially those organized to address public problems.
But even corporations, who do not exist to change systems and institutions, must recognize their dependence on, and interdependence with, multiple stakeholders outside their shareholders. Owners — shareholders — matter, and firms must produce value for them. But there is no value to be created without customers, workers and communities. I can’t imagine a more vivid illustration of this dependence than the pandemic and national outpouring of grief, rage and frustration over racial injustice.
Imagine for a moment if there was a “race to the top,” if the nation’s largest public firms strove to find the best approaches to increase the overall value they create, and to find the ideal balance among shareholders, workers, customers and communities? We haven’t even begun to probe deeply what value there is yet to unlock.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My goal is to lead with empathy, and assume the good intent of others. This makes it possible to find common ground, and makes understanding — and even persuasion — possible.
In my career I’ve been most effective when working across boundaries — the social and corporate sector, the C suite and on-the-ground in communities, the political left and right. Suspending judgment, and believing that people are, on the whole, acting with integrity, has been essential in working collaboratively.
How can our readers further follow your work?
We publish original research and thought pieces on our website at buildcommonwealth.org. You can sign up for our newsletter to stay looped in. You can also follow us on LinkedIn at linkedin.com/company/buildcommonwealth/
