Gil Alvarado: “Failure comes with the territory.”

My grandfather was a driving force in what I did. As a kid growing up, he was just Grandpa. But as I started to advance in my career, I could see his influence on me. Every chance that I had to fly back home, I would go directly to his house and talk for hours. […]

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My grandfather was a driving force in what I did. As a kid growing up, he was just Grandpa. But as I started to advance in my career, I could see his influence on me. Every chance that I had to fly back home, I would go directly to his house and talk for hours. He was a true inspiration. A humble man who was one of the most forward-thinking and generous people that I have known. Always willing to give you the shirt on his back and never appearing to be stressed or negative on life. His words to me: “Gil, always stay hungry, in health and in life.” He lived to be 101 years of age, with a physical and mental state of health that I hope I will have the same fortune and blessing to experience.

Asa part of our series about “Social Impact Investors”, I had the pleasure of interviewing Gil Alvarado.

Gil serves as Senior Vice President of Sierra Health Foundation and The Center at Sierra Health Foundation and as President of the San Joaquin Valley Impact Investment Fund. For more than 25 years as a financial executive, he has led start-ups to large foundations, overseeing institutional investing, finance, technology, audit, tax and, more recently, impact investment strategies.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

Itstarted sometime during my second year of undergraduate studies. I wanted to be involved in a career that could weather the changes brought about by economic cycles (my practical side) and I wanted a career that helped others. My career began with a degree in accounting, working for a large health care system in Texas. Years later, with the proceeds from the sale of that health care system, we formed a private health foundation. I was asked if I wanted to transition to the foundation and the rest is history.

Can you share a story with us about the most humorous mistake you made when you were first starting?

My first week on the job, I was asked to run that week’s accounts payable check batch. In those days, printing checks was a labor-intensive process. You carried a 20-pound box of blank checks from a walk-in safe and down to the basement to print signatures on the checks. Not fully understanding how the signature plates were set up, I pushed forward and the result was a thousand-plus checks signed with the president’s signature upside down.

What lesson or take-away did you learn from that?

I learned that as part of a team, your actions have consequences, to you and to your colleagues. Voiding all those checks and recording the batch in the ledger along with recasting the signature plates involved a few extra hands and time spent to get it corrected with downstream work affecting staff time. I also learned (after a few laughs) that making mistakes is a part of growth. What appears to be bad in the moment is actually an opportunity to learn and to find ways to make a change for improving systems and processes.

Are you able to identify a “tipping point” in your career when you started to see success?

I don’t consider success as a tipping point, but more of a journey of incremental steps that reflect experience, growth, improvements, mistakes and opportunity.

Did you start doing anything different?

I started to recognize one of the most important things you can do is to be true to the limits of where you are in your career and to understand where you can grow, so that your value and path of success are aligned with the organization. This in turn may drive you to get more education or to reinvent yourself to position yourself for the opportunity.

Are there takeaways or lessons that others can learn from that?

What has remained consistent in my career is a commitment to a strong work ethic, loyalty and being a humble leader with a hunger to constantly learn, adapt and improve.

None of us are able to achieve success without some help along the way. Is there a particular person or mentor to whom you are grateful who helped get you to where you are? Can you share a story about that?

My grandfather was a driving force in what I did. As a kid growing up, he was just Grandpa. But as I started to advance in my career, I could see his influence on me. Every chance that I had to fly back home, I would go directly to his house and talk for hours. He was a true inspiration. A humble man who was one of the most forward-thinking and generous people that I have known. Always willing to give you the shirt on his back and never appearing to be stressed or negative on life. His words to me: “Gil, always stay hungry, in health and in life.” He lived to be 101 years of age, with a physical and mental state of health that I hope I will have the same fortune and blessing to experience.

You have been blessed with great success in a career path that many have attempted, but eventually gave up on. Do you have any words of advice for others who may want to embark on this career path but are afraid of the prospect of failure?

Believe in yourself and commit to a greater purpose that is not just a number or financial reward. Failure comes with the territory. Over the years, you may find yourself in many different roles. The key is to position yourself for the opportunity. With a little bit of luck and perseverance, your accomplishments may just exceed your expectations.

Ok, thank you for that. Let’s now jump to the main part of our discussion. The United States is currently facing a very important self-reckoning about race, diversity, equality and inclusion. This is of course a huge topic. But briefly, can you share a few things that need to be done on a broader societal level to expand VC opportunities for women, minorities, and people of color?

Our work at Sierra Health Foundation and The Center at Sierra Health Foundation focuses on the issue of health equity — making sure that everyone has the opportunity to live a healthy life. As the COVID-19 crisis has revealed, there are vast disparities in both life expectancy and quality of life in my state of California and nationwide. Even before COVID-19, the disparities were known to be as much as 30 years between nearby zip codes. When we look closely at what causes those disparities, we see that community economic conditions are closely tied with health outcomes. And so we seek to build inclusive, healthy and sustainable communities within California and as a model for communities nationwide. Our investments include not only VC, but also the range of capital that communities need to ensure that all residents have access to the opportunity for health and prosperity.

You are a VC who is focused on investments that are making a positive social impact. Can you share with us a bit about the projects and companies you have focused on, and look to focus on in the future?

A guiding principle in our work to advance positive social impact is to match our capital to community and entrepreneurial needs. We created the San Joaquin Valley Impact Investment Fund (SJVIIF) to target capital to the entrepreneurs and households overlooked by conventional capital sources. Though the San Joaquin Valley is a breadbasket for the nation, its hardworking residents and small businesses (particularly those led by Black, Indigenous and other people of color) lack access to the range of capital needed for economic stability and growth. The SJVIIF aggregates capital from socially motivated investors nationwide to reinvest in this underserved region. We invest across the spectrum of regional capital need — from smallholder farmer and microenterprise, to small and growth businesses, nonprofit health clinics, child care and educational institutions, affordable housing and basic infrastructure such as clean water access. Most Americans would find it hard to believe that within our country we have substantial numbers of residents (including many of the San Joaquin Valley’s essential food-system workers) who lack access to clean water in their homes. The SJVIIF is investing to correct this situation as quickly as possible.

What you are doing is not very common. Was there an “Aha Moment” that made you decide that you were going to focus on social impact investing? Can you share the story with us?

As with most philanthropies, the core business of Sierra Health Foundation is grantmaking. As a private foundation, our grantmaking was restricted by our original geography as well as the scale of our own assets. Yet the problems we sought to address called for both a greater geographic footprint and additional financial resources. This prompted us to create The Center at Sierra Health Foundation, a public charity that could aggregate both grant and investment capital from like-minded institutions. Our initial focus at The Center was to create the San Joaquin Valley Health Fund in 2015 as a means to aggregate grant capital from regional and national foundations to address pressing social needs throughout the San Joaquin Valley. Recognizing that grant monies are always limited, we added the San Joaquin Valley Impact Investment Fund in 2019 to attract much larger sums of investment capital that could sustain and scale our mission-driven efforts.

Can you share a story with us about your most successful Angel or VC investment? Or an investment that you are most proud of? What was its lesson?

Our first SJVIIF investment was an equity-like loan to Self-Help Enterprises, an entrepreneurial nonprofit organization providing environmentally sustainable affordable housing and clean water access to the region’s very low-income residents. The nation’s oldest and largest rural mutual housing organization, Self-Help Enterprises supports residents in building their own homes (like a rural Habitat for Humanity). Self-Help Enterprises also leverages State of California environmental programs to incorporate clean water access, green building and transit-oriented considerations to its growing portfolio of housing solutions that now serves a range of quality, affordable rental and homeownership housing needs. During the COVID-19 crisis, Self-Help Enterprises has helped the many essential food-system workers in its housing developments to adapt policies that help to reduce the risk of infection.

Can you share a story of an Angel or VC funding failure of yours? What was its lesson?

To date, the SJVIIF has sought to raise capital primarily from philanthropic and bank investors. While we clearly saw the opportunity to advance a VC strategy in the San Joaquin Valley that could promote fund manager and founder diversity, we found that our initial investors favored debt over equity investing. For this reason, we anticipate adding any VC investing at a later time through one or more separate vehicles.

Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?

We see a variety of VC funds emerging to expand access to capital, including within the San Joaquin Valley. A key example that has attracted impact investment from national investors is Bitwise. The SJVIIF will continue to seek opportunities to finance such companies with debt, but the lesson from our early capital-raising efforts is that we will need to target a different type of investor to be able to operationalize a VC investing strategy in the region.

Super. Here is the main question of this interview. What are your “5 things I need to see before making a VC investment” and why? Please share a story or example for each.

Most of the SJVIIF’s current portfolio and pipeline of investments are in Community Development Financial Institutions — lending and investment funds that have a primary mission of community development in underserved communities. Our investing criteria include mission alignment and other factors below that we consider essential to achieving the SJVIIF’s targeted financial and social performance objectives:

Mission Alignment — How, very specifically, does this company contribute to the SJVIIF/Center mission, particularly its commitment to ensuring that all San Joaquin Valley residents have access to health and prosperity? Our investment in Self-Help Enterprises provides quality, affordable housing combined with access to other critical amenities for the range of residents in the region, from families to seniors and other individuals in need.

Market Opportunity — Is there a big enough market to support impact and financial returns at scale? The SJVIIF’s partnership with Blackstar Stability aims to prevent foreclosure in a way that keeps lower-income families in their homes. Blackstar’s strategy contrasts with the widespread distressed debt funds that typically acquire foreclosed properties through a process that displaces the homeowner. Regrettably, Blackstar represents a significant current market opportunity given the expected surge in housing foreclosure in the San Joaquin Valley and nationwide as a result of COVID-19-related economic contraction. Blackstar’s strategy generates attractive debt returns to lenders, as well as equity returns for its equity investors.

Traction — Is there evidence of product-market fit? The SJVIIF keeps its idle funds in Self-Help Federal Credit Union, whose mission is to create and protect ownership for all. With branches and rapidly expanding membership across the San Joaquin Valley, Self-Help is a primary provider of asset-building (non-predatory) banking and credit services for the range of household and small business needs. The credit union is a national leader in providing services to the unbanked and underbanked, which within the San Joaquin Valley includes many immigrant households. Self-Help was also a leading provider of Paycheck Protection Program (PPP) loans in the COVID-19 crisis, particularly for small businesses and nonprofit organizations that could not access PPP loans from more conventional bank lenders.

Team — How capable is this team? Have they done it before? How committed are they? The SJVIIF’s partnership with California FarmLink illustrates a management team with significant experience and commitment to the organization’s lending mandate to serve smallholder farmers in the San Joaquin Valley and statewide. As is common with CDFIs, California FarmLink’s dedicated staff combines education with lending, so that less experienced farmers can enter into farm leases and mortgages that are a good fit with their resources and objectives.

Deal Structure — Is the company raising enough capital? Is the capital structure matched with the organization’s performance objectives? Are there savvy co-investors? The SJVIIF’s partnership with RCAC illustrates a CDFI with more than 40 years of experience in aggregating both public and private capital to provide needed flexible financing across 13 rural states including Tribal communities. This savvy was recently recognized by a California family office that mobilized a 9 million dollars syndication to support RCAC in providing PPP loans to underserved rural borrowers in the San Joaquin Valley and across its footprint. More than 20% of these PPP loans went to Native American borrowers, and 47% went to counties of persistent poverty.]

You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂

In today’s time of uncertainty, it is an extraordinary opportunity to pivot from what we know and to recognize that solutions to many of the immediate needs of our communities may require a new approach to address these needs. It may now be time for a new movement toward what I call the five “Ls”: Listen, Learn, Lead, Love, Live

If you could tell young people one thing about why they should consider making a positive impact on our environment or society, like you, what would you tell them?

Follow your passion in life; we are all connected. You can find many ways to give back. I think we get stuck in some respects with a mindset that giving back has a certain meaning that is separate from what we do in our professional careers. I am very fortunate to have built a career that focuses on philanthropy, investments and education. How you measure impact should be with a lens of thinking globally and actively participating locally.

We are very blessed that a lot of amazing founders and social impact organizations read this column. Is there a person in the world with whom you’d like to have a private breakfast or lunch with, and why? He or she might just see this. 🙂

Institutions that apply resources through the lens of ESG and Impact Investing have the potential to expand awareness and address solutions with the metrics and ROI characteristics that would further bridge and connect philanthropy with the investment world. We are grateful for the partnership with Canterbury Consulting and Avivar Capital, two firms that have advanced the bridge between impact and industry. I would like a private breakfast with Warren Buffet and Bill Gates on ESG.

How can our readers follow you online?

You can follow us at

Thank you so much for this. This was very inspirational, and we wish you only continued success!

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