By Michael Kramer
“Through the creativity and hard work of Self-Help, Fannie Mae, and the twenty-two participating lenders, the program is enabling households previously under-served by the conventional mortgage market – minority households, rural residents, female-headed families, people with blemished credit histories — to become homeowners. The purchase of a home by these households is leading to the creation of meaningful wealth. Even households with incomes below $20,000 have been able to grow a small down payment into an impressive nest egg.”
— Susan V. Berresford, president of the Ford Foundation, commenting on the successful conclusion of a 2003 $2 billion homeownership initiative.
This statement highlights the profound shift in philanthropic commitment to helping people and communities in need. Through essential partnerships between the private, public, and independent sectors, the agenda of creating a more just and sustainable society looks possible. This form of socially responsible investment, known as community investing, is part of a multi-billion dollar nationwide initiative to invest resources in specific causes.
The Self-Help Credit Union, Urban Partnership Bank, and Permaculture Credit Union are examples of community development financial institutions which provide modest interest to account holders while channeling loans to marginalized persons or to ecological causes. In addition to Self-Help’s affordable housing initiative, One PacificCoast Bank in the Northwest has a sustainability focus and sponsors the Green America credit card, while the Permaculture Credit Union gives a discount on car loans used to purchase hybrid vehicles.
It used to be that one made money in whatever way was possible and donated a portion of that to charitable causes. Today, it is possible to do both simultaneously, to make money and make a difference. Through community banks and credit unions, loan funds, and international microcredit organizations, people who either would not otherwise have access to capital or who are working towards social change are afforded opportunities to fulfill their dreams. As depositors, we earn interest while our principal is put to good work.
In the field of corporate investing, it is also possible to avoid companies doing business in repressive countries or who test their products on animals. It’s possible to weed out tobacco, alcohol, and gambling, major polluters, companies that operate or buy from sweatshops, and those with governance problems like those in the recent Wall Street scandals. On the positive side, one can seek out companies that promote one’s values in order to support everything from renewable energy and health food to companies with progressive policies regarding gays and lesbians, women, and minorities.
Socially conscious investing is now a $2.3 trillion industry, and indeces of screened companies outperform their conventional counterparts. Given this phenomenal success, there are now over 250 socially screened mutual funds available in the stock market. Pension funds, churches, and state treasuries are the biggest shareholders which are putting their money where their values are. They are also engaged in shareholder advocacy efforts to influence corporate policies, and they are having success as greater light is shed on corporate misadventures.
As ethics takes center stage in finance and people put their money where there heart is, we will continue to see an emphasis on the link between investing and philanthropy so that we can create change from the bottom up and the top down. Money is inherently value-neutral, it is how we use it that matters. We can use money as a tool to be the change we wish to see in the world, and through conscious consumerism, charitable giving, savings, and investment, we can leave a positive legacy for our grandchildren and contribute to the regeneration of the Earth’s abundance.
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