Joe Sanberg is a progressive entrepreneur and investor who is working through both the public and private sectors to change people’s lives for the better. On the public side, he’s the Founder of CalEITC4me, a statewide outreach program in California that helps low-income families claim the state and federal earned income tax credits on the private side. Currently, Joe’s primary occupation is as Co-Founder of Aspiration, an online banking and investment firm that provides socially conscious products with a “Pay What Is Fair” business model.
Gino Borges:
I’d like to thank you all for joining us today on The Journey to Impact: A Virtual Fireside Chat Series. The Journey to Impact Series is here to tell a different story of impact. While we naturally address some of the landmarks of the journey, this series is designed to create a space for uncovering the emotional, mental, and spiritual challenges and successes along the path of impact. It’s less about outcomes or the results of actions, but rather the human components of what it feels like to operate in the impact world, illuminating one’s inner journey.
Today I’d like to welcome Joe Sanberg. Joe is a progressive entrepreneur and investor who is working through both the public and private sectors to change people’s lives for the better. On the public side, he’s the Founder of CalEITC4me, a statewide outreach program in California that helps low-income families claim the state and federal earned income tax credits on the private side. Currently, Joe’s primary occupation is as Co-Founder of Aspiration, an online banking and investment firm that provides socially conscious products with a “Pay What Is Fair” business model.
This journey to Aspiration began a long time ago. Take us back first to your childhood, growing up in Los Angeles, and then walk us through those early years at Harvard.
Joe Sanberg:
I grew up in Orange County near Disneyland. My mom raised me by herself, and we didn’t have a lot, especially when I was a teenager. Eventually, we lost our home to foreclosure. When I was leaving for college, I saw firsthand this idea that “if you work hard and play by the rules, everything works out” just isn’t true for most people. It’s really an illusion. I think it’s one of the reasons so many people are angry about the state of affairs in the US today. When that promise that you’re sold as a kid turns out to be false, you’re left feeling really disoriented.
My mom couldn’t have worked any harder, but things didn’t work out for her when I was a kid. That really animated the early part of my adulthood when I was an activist at Harvard, organizing justice for janitors and other programs around social and economic justice. As I was graduating college though, I wanted to provide financial security for my mom. So, I started a career on Wall Street. During the early part of my career, I had lost the connection to my core values. I saw up close what we all saw from a degree of distance, a model of business that divorces profit from purpose. I don’t think there’s anything wrong with making money as long as you’re making money by delivering valued services and goods to your customers. But, that whole era on Wall Street was about the total divorce between the purpose and profit.
When I was 29, my brother took me out to lunch when I was visiting California and told me that my 18-year-old self wouldn’t have liked my 29-year-old self. That was jarring for me because I liked who I was at 18. That sparked me to leave that early part of my career, move back to California and focus on building organizations that are trying to fix things instead of breaking them over the last ten years. My compass throughout is to be someone that my 18-year-old self would be proud of.
Gino Borges:
Walk us back to that late teen moment when you made the decision to leave California, your home, and your mother. I sense that you and your mother have a close relationship. What was that experience like moving across the country in hopes to help your family’s future?
Joe Sanberg:
Harvard was a really weird experience for me because I met people that come from families whose great, great, great, great, great grandparents were really rich. The money was long in the family. I experienced Harvard very much through a class-lens. I felt out of place coming from a working-class or low-income background. I was the kid who’d stay at school during the holidays because I couldn’t afford a plane ticket to go home. The closest friends I made in college were people who came from a similar background. It was a really scary experience leaving for college at a time that my mom was losing her home. My grandmother, with whom I was very close, was in the final stages of her life. It was a real culture shock to be at Harvard during that time in my life when again, I had so little. I didn’t have money to buy a pizza, let alone, afford Harvard. I was quite fortunate that the school gave me a lot of financial aid and I worked extra jobs to earn money to supplement my financial aid and to be able to send money home to my mom.
Gino Borges:
Was your decision to build a career in traditional finance on Wall Street a singular focus? Was Wall Street the quick answer, a form of medicine, that could solve the scarcity your family experienced?
Joe Sanberg:
The only reason I applied for my first job on Wall Street was that I wanted to earn that salary to send money home to my mom.
Gino Borges:
You mentioned this mantra of the American dream, that if we work hard and play by the rules, we’ll be rewarded. Share with us your insight on why the working class is actually kept down even though they are working hard.
Joe Sanberg:
We have to understand the nature of poverty in America. Somewhere along the lines we’ve abandoned the definition of poverty to the statistician and relegated the question to those who live below some so-called poverty line. But, when almost 8 out of 10 Americans are living paycheck to paycheck, you can’t tell me that those folks are middle class. Middle class isn’t living paycheck to paycheck. Middle class isn’t waking up in the middle of the night in a cold sweat wondering how you’re going to pay for your medical bills. So when we understand poverty as the lived experiences of real Americans instead of the statistician definition of it, then we’re confronted by the fact that we have a massive poverty crisis in America. In my view, the 8 out of 10 Americans who are living paycheck to paycheck are America’s poverty crisis. There is no middle class.
The American dream is dead. Now, some people say that that’s so negative to say, but I think it’s negative is to lie to people and tell them that they’re middle class when they’re living paycheck to paycheck. What’s negative and what stifles hope is when you lie to people and tell them about a dream of working hard and playing by the rules that don’t exist anymore. What creates hope is seeing people’s lives as they actually are being experienced. What creates hope is if you narrate to people that they’re not middle-class and that you know their life doesn’t feel anything like middle-class. When you’re told by the media that you’re middle class, but you’re living paycheck to paycheck, waking up in the middle of the night wondering how you’re going to pay your medical bills doesn’t make you feel hopeful. That makes you feel isolated. The reason for this isn’t because of some forces that came from outer space like sometimes, we’re told these questions of automation and globalization as if they were out of our control.
We’ve abandoned agency over our economy. We’ve allowed ourselves to be convinced that we are part of the economy and that the worship should be placed on maximizing efficiency and productivity instead of recognizing that the economy is just some human construct that needs to work for human happiness, not for this completely unhuman notion of maximum efficiency. The question we should be asking is whether or not the merit of economic policy makes the human condition happier? If it doesn’t, what’s the point? One of my favorite speeches from Bobby Kennedy is the University of Kansas speech he gave in 1968. To paraphrase, he said something along the lines of GDP measures everything except that which makes life worth living. Those words more than ever describe how we think about economics, poverty, and financial services today. We measure the good by these arbitrary unemotional figures that don’t actually tell you about the quality of people’s lives.
At the heart of this is a broken system where most of us play by a certain set of rules that are transparent. Then this small number of monopolies and ultra, ultra rich people with lobbyists who buy the political system to create a separate set of rules that we don’t even know about and we’re left being played like suckers. We wonder how is it that we’re working hard and we don’t get ahead. It’s because we’re playing by a different set of rules than the small, small group of people that really artificially influenced the system to advantage outcomes that are in their interest instead of the interest of the common good. If we want to fix all of this, we need to get to the root cause of a system that relegates so many people with jobs where they’re living paycheck to paycheck. We need to get at the root causes of a system that is infected with institutional massage money and institutional racism so that when people perpetuate that kind of persecution, there are consequences that are proportionate to their crimes and actions. We’ve been going along for the last 30 years with real incremental change, putting band-aids on the problem. What we have to do in our generation is we have to go to the source of the wound and change the structure of the system so that it works for everyone, not just a small number of people with highly paid lobbyists that know how to create differential rules that advantage only them.
Gino Borges:
Some people have started to make the claim that the progressive route is not through additional taxation because the few that always outmaneuver are incentivized, anonymous, and can move their capital around, always gaming the system. Rather, some suggest it’s a matter of our capitalization of the labor class, or rather a matter of breaking down the idea of there’s capital and there’s labor. How much of the problem actually exists in that ideology of separation between the capital and production processes being owned by a few where labor can just simply contribute to capital’s imperative?
Joe Sanberg:
I think the approach requires an “all of the above” roadmap. There isn’t a single solution. We absolutely have to change the tax code so that monopoly corporations and ultra, high-net-worth individuals pay their fair share. We also need to address questions like the ones you pose between the distinction of labor and capital and the respective shares that labor and capital have in gross domestic product. But, just capitalizing labor alone isn’t going to be enough to rectify the reality as it stands now that those that have capital have such a significant lead on the rest of us. Until we change the tax code to redistribute wealth from those who have a ton of it based on institutional prejudices, we’re never going to close the gender and racial wealth gap. The gender and racial wealth gap exists because of centuries of disparities in an economic system that advantaged a patriarchy dominated by white men. With taxation of income alone, we’re not going to close those gaps. We have to have more meaningful redistribution, such as what Senator Warren has proposed around the wealth tax.
Gino Borges:
How do you find interior alignment knowing that you, yourself, are also a white male? Essentially, it seems you’ve won the “ovarian lottery,” being dealt two aces in the hole. Describe your inner psychology when contemplating your function in a society where people may make the assumption that you, as a success white male, are a part of the issue.
Joe Sanberg:
I can only speak from my own sense of identity which is one of duality. On the surface, I have white skin and I’m a straight male; therefore, I have unearned privileges. At the same time, I’m also Jewish. There are individual white supremacists that want to kill me. My maternal grandfather’s family left Ukraine in the early 20th century after Russian soldiers killed two of his older siblings in front of their house for being Jewish. Every day I face threats as a result of my pride in being a liberal Jew. Speaking for myself, I live a complicated duality where, in some senses, I carry the unfair structural advantages of having white skin and being a straight male. At the same time, I carry the legacy of antisemitism that drove my family out of Ukraine. I face it every day when I walk through the world as a public figure and a proud liberal Jew. This is the most dangerous time in American history to be Jewish as well as Muslim. Jews and Muslims pray every day in America under the fear that we’re going to be killed for how we worship. That’s both qualitative and also born in the statistics. Hate crimes against Jews and Muslims in America are at record highs and show no signs of abating. Those factors speak to this complicated duality that I personally live within balancing reality. I have white skin, and I’m a straight male with a simultaneous reality that I’m a proud liberal Jew who faces constant antisemitic threats along with my Muslim brothers and sisters.
Gino Borges:
You have a very complicated form of freedom based on your certain identities and their historical legacy. Take us through what a day or week looks like for you as a result of this complicated freedom. What do you do to keep that joy alive for yourself and for others?
Joe Sanberg:
It begins with a healthy prayer-life that keeps me centered around a sense of purpose, meaning, and humility. Each person needs to find her or his sense of purpose. For me, it’s a progressive, humble faith, and God — a loving creator who’s omnipresent. Not some bearded white man in the sky, but rather something that is inexplicable, profound, and infinite, something that can’t be boxed into human connections on a piece of paper or a tweet. It continues with a love of self and an acceptance of self. There’s a famous guidance from scripture that says you should love your neighbor as yourself. What’s misunderstood about that is it’s only meaningful to love your neighbor as yourself if you love yourself.
People who are unkind to others are born of not liking who they are at that moment. We are all imperfect in that regard. We’re all victims of being unkind. We’re all victims of moments where we don’t love ourselves. I try to accept and live exactly as I am. I am a proud liberal Jew who loves being Jewish. That’s how I will live my life and my views, damn the consequences. I’m not going to think about the risks that I’ve faced by walking through life, wearing my liberal Judaism on my sleeve proudly. In fact, I hope that it’s a spark to others to live proudly with who they are and what they believe, whether they’re Christian, Muslim, Jewish, Buddhist, Sikh, Agnostic, or Atheist. My hope for everyone is that they love and accept who they are and live their life proud of who they are. I’m trying to do the same myself. I get through the moments of the reality of Antisemitism, but just frankly being at peace that I’m going to be who I am. I’m going to walk proudly in the world as a liberal Jew and whatever happens is out of my hands.
Gino Borges:
You have all these life experiences: the complicated freedom, historical legacy, and values married to purpose. How have all these experiences contributed to the start of Aspiration?
Joe Sanberg:
The moment that it all began was actually 27 years ago, September 5th, 1992. I was bar mitzvahed, a rite of passage for young Jews into manhood; for women, it’s a bat mitzvah. During that time, you read from the Torah in front of your community for the first time. My Torah portion was Deuteronomy, a section on justice, justice shall you pursue. The word choice of that section is purposeful and meaningful. It doesn’t say “justice shall you achieve.” It says, “justice shall you pursue.” We’re judged by the authenticity and audacity of our pursuits. For me, that faith journey began as a 13-year-old boy and continues to the present. One of my favorite speeches by Dr. Martin Luther King talks about unfulfilled dreams, and unfulfilled dreams are all about being commanded to try.
Dr. King has this line in that speech that explains that one of the great agonies of life is that we are constantly trying to finish that which is unfinishable. We are commanded to do that, right? We are commanded to try. As I’ve reflected on that over the last 10 years, one of the huge problems we’re facing as a society is the lack of consciousness we have about the purpose and power of our money. We vote every couple of years, but every single day as consumers we spend $36 billion. Imagine if some portion of those $36 billion every single day was directed toward businesses that treat their workers and the environment better. If we did that, we could change the nature of how businesses treat people and the planet. How do we make it easy for people to be conscious about their money? Deliver them a banking account at the core of their life so that a tour of the impact of their money is integrated into the things we’re already doing with their money: depositing their payroll into their bank accounts, spending on their debit card to purchase their groceries. That’s the premise of Aspiration: delivering you a bank account that makes it easy for you to match your spending, your values, your banking, and your values while also giving you the financial features that you need.
Gino Borges:
Was there any systemic doubt that was pushed your way in the early goings of Aspiration? How did you handle it?
Joe Sanberg:
The key is you can’t even bother to digest it. You have to ignore it. Most people that express skepticism are coming from a place of a lack of information. The only skepticism that one should accommodate is well-informed skepticism, but very, very little skepticism is well-informed. You have to mostly ignore it. When people express doubt, they’re expressing a lack of information or projecting their own insecurities, such as they wouldn’t be courageous enough to start this. These types of people are made uncomfortable by someone else who has a destiny that they lack. Whether you’re a doctor, an entrepreneur, an activist, a person of faith or anything really, you have to be very limited in the energy and attention you give to doubters, especially those that have their own agendas and are only partially informed.
Gino Borges:
How long did it take to get others on board with your ideas for Aspiration?
Joe Sanberg:
It took about a year and a half before we took customers, but people understand that financial services as an industry are heavily regulated, and it takes a long time to be ready to take on customers. I have developed a reasonable discipline of not listening to skeptics and doubters. It’s a big world out there. Sometimes we fool ourselves into thinking there’s only a small universe of potential supporters, whether it’s investors or allies, and it’s not true. When people doubt, you have to move on quickly and keep searching for people who believe.
Gino Borges:
One of the claims that Aspiration makes is that its competitive advantages is unlike other bigger legacy banks because values are built into the strategy. Everything’s in sync so to speak. It’s not like Wells Fargo, trying to pivot from fossil fuels and trying to do environmental work at the same time because shifting is nearly impossible. Recently, a lot of esteemed, traditional CEOs in legacy companies declared that we shouldn’t just divorce, but we need to rethink the purpose around capital and our business endeavors. How realistic is that and where is the starting point? What are your thoughts?
Joe Sanberg:
My hope is that everyone embraces these values, and eventually everyone will embrace these values. I don’t think we’re actually far off from that. In 10 years’ time, the standards that Aspiration has inaugurated about connecting financial services will be embraced by most of the industry. There’s plenty of market share to go around. One of the great things, when you innovate, is that you actually increase the size of the market. You turn people on to new applications for goods and services. For example, most people haven’t thought about the way they spend their money in the bank and where they choose to have their banking account as a tool for impact in their life. As they see that their banking account and their debit card spending could be more than just where they keep their money and where they buy their groceries, then demand for that good and service increases, too. I don’t think of this as a zero-sum game, and I celebrate that more business leaders are recognizing the merit of these factors. We’re going to see many, many more. This is just the very, very beginning of a new age of business in America.
Gino Borges:
How can the working class help hold the narrative responsible?
Joe Sanberg:
You have to focus on what you can do every single day. There are millions, probably tens of millions of people who are passionate about fighting the climate crisis. Whose bank account uses their money to make loans to fossil fuels? Right now, if you’re listening, the first thing you can do is examine where you have your bank account. If it’s at a place that funds fossil fuels, then I hope you move your bank account to a place that doesn’t fund fossil fuel. Obviously, I’m biased; I hope you’ll move into Aspiration. But whether you choose Aspiration or some other place, one thing you can do right now is to make sure that your money’s aligned with your values. The second thing you can do is be conscious. Be conscious and have conscience of your spending choices. It’s a power you can project into the world every single day. Where are you spending your money? Are you spending your money at places that treat their workers and the environment well, or do they exploit their workers and destroy the environment? It’s so overwhelming when you focus on changing everything at once. What we need to do is to focus on the small changes we can make every single hour of every single day. If we all did that, it all adds up. That, of course, doesn’t mean your individual actions are going to create change by themselves. The honest answer is all we can do is what we have in our own two hands, 24 hours a day, seven days a week.
Gino Borges:
What are you seeing at a generational level of identification with these values?
Joe Sanberg:
There’s too much made of the generational differences. These values are shared across generations. It’s a false media narrative that this is a millennial thing.
Gino Borges:
Do you think that because, based on your experience at Aspiration, you have a particular cross section of clients that have erased that belief? I’m trying to understand your doubt.
Joe Sanberg:
I believe that these values are universal. We might describe them differently based on our age, but all of us as humans are universally connected to these values. Some of us may have more layers of cynicism that cover up these values, but the values are there.
Gino Borges:
A lot of Aspiration’s goals have been turning around climate change, but I also know that you guys are very sensitive to gun violence. That’s obviously a sensitive topic for a lot of people at a lot of different levels. It may be increasingly more visceral than the climate experience to some extent, at least in American culture. Can you walk us through why and how Aspiration is navigating gun violence in relationship to money?
Joe Sanberg:
Your deposits at Aspiration never go to gun companies, which is not the case for many large banks that use your money to make loans to gun companies that build weapons of death and use that money to lobby Congress against sensible gun regulation. No one needs automatic weapons, but the gun companies lobby against restrictions on automatic weapons. Aspiration delivers you the peace of mind that your money has never been lent to those companies. Second of all, Aspiration can use its collective consciousness and the collective purchasing power of its customers to reward businesses that do well and don’t do ill. For example, several weeks ago when Walmart workers were walking out in protest of the gun sales at Walmart, Aspiration offered a cash bonus to Walmart workers to support their efforts to make Walmart change their behavior. Now this week, Walmart announced that it’s stopping the sale of handguns and handgun ammunition at stores. Aspiration announced a way to applaud that behavior by giving a cash bonus to Aspiration customers who spend at Walmart because we have to show that we can be critical and also applaud. There’s no perfect person, there’s no perfect company. Moral authorities are born of being intellectually honest about the capability of almost every person in every company to do badly and to do well and to call out both equally.
Gino Borges:
The Walmart move was a very big leap forward for an executive ownership group of that magnitude with that much inertia to come out and put a clear prohibition on certain things. That says a lot.
Joe Sanberg:
It does. Walmart still has many imperfections. I quite oppose how they treat their workers. I quite oppose how many of Walmart’s workers are on food stamps, which essentially means that we as taxpayers subsidized Walmart’s profitability by enabling them to pay their workers low wages, and then offset those low wages with food stamps. But again, understanding that companies and people exist in shades of gray, we also have to acknowledge that Walmart did the right thing, and you have to applaud them for doing the right thing.
Gino Borges:
Last time we chatted, you mentioned that Aspiration has 250 employees, and I know company culture is important to you. Describe the type of people that are attracted to working at Aspiration.
Joe Sanberg:
Mission-driven people who want to change the world are the kinds of people that we want at Aspiration, and people understand that it’s hard to create change. You have to work really, really hard.
Gino Borges:
How do you know somebody is mission-driven?
Joe Sanberg:
You know when you meet them. I can figure out someone’s mission-driven in five minutes.
Gino Borges:
By body behavior, or particular questions that you ask?
Joe Sanberg:
I can tell the authenticity of someone’s answers to certain questions. I’ve never found it difficult to find if someone’s mission-driven.
Gino Borges:
As co-founder, how has your role evolved and how do you see your role in Aspiration now?
Joe Sanberg:
Well, I’m probably chief pain in the ass. I believe very much in the importance of Aspiration’s mission. I also believe in the plausibility and the full realization of its potential. I see part of my role as encouraging and also maintaining a standard of expectations for what Aspiration should achieve. Aspiration is not just about making money. Aspiration is about elevating people’s consciousness about money and changing the way that financial services are conducted. Until we change how financial services are conducted, political changes are always going to be two steps forward, three steps back. I’m deeply serious that we cannot accept anything less than seeing Aspiration to its full potential, which to me means changing the nature of financial services. This is just the way things are done, the Aspiration way, and that means that can be tough and hard-charging.
The moral urgency of Aspiration’s mission is of historic consequence. This isn’t just a company looking to do an IPO one day and deliver a great return for its investors. Obviously, those things are important, but those things are going to be byproducts of delivering Aspiration’s mission for its customers to make it easy for eventually tens of millions of people to match their banking, investing, spending to their values and all the very positive social change that will come of that. I believe so much in that and I know it’s possible; thus, I’m uniquely qualified to be chief pain in the ass.
Gino Borges:
Can you tell us about Aspiration’s other co-founder, Andre, his leadership skills, and his evolution with the company?
Joe Sanberg:
I am proud to have co-founded Aspiration with Andre Cherney, Aspiration’s CEO. He’s an exceptionally talented leader, visionary, and executive. The results of Aspiration really speak to all of those attributes. The mission of the company is fortunate for Andre’s leadership.
Gino Borges:
Considering you are two individuals with two differing dispositions, how do you guys walk through the inevitable conflict resolution moments? What does a conversation about differences in policies look like?
Joe Sanberg:
Andre and I don’t have differences over the vision and direction of Aspiration. We continue to be perfectly aligned on that. We co-birthed this company and we’ve always seen an exact alignment on what it needs to become and how to get there. There’s a deep, deep, deep seated trust between me and Andre. That’s one of the great advantages of the company.
Gino Borges:
Conflict resolution is always a hot topic. Even if it’s not with Andre, how do you handle situations when regulators or others who are necessarily involved in the process are not aligned with your same mission?
Joe Sanberg:
The regulators are very mission-aligned because the regulators are charged with protecting customers. The number one thing that Aspiration has to honor is the seriousness of the duty of care it has toward its customers. The regulators in the financial industry have a critically important job. My view is that there should be more regulation. Companies should build to the highest standard of regulation instead of trying to find ways to short circuit regulation. My hope is that new financial companies will look to the regulators to partner in building businesses that honor the seriousness of the duty of care they have for their customer’s money. It’s really important that people know that regulators have a hard job. Regulators are not paid a lot. They do it because they believe in the purpose of protecting consumers. Regulators that we’ve seen in the financial industry are people that uphold the highest level of public service in the spirit of giving back. You don’t become a regulator because of the glory and money. You become a regulator because you believe in the importance of protecting consumers. We should honor the people who make those choices instead of the narrative that sometimes prevails, which is this, that, or the other.
Gino Borges:
Is there anything that emerged during our conversation you’d like to expand on or something that didn’t come up that you would like to share in the final moments here with the people?
Joe Sanberg:
No, I really enjoyed the conversation and I wouldn’t be a good co-founder if I didn’t encourage everyone who’s listening to go to Aspiration.com and open an account.
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