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For Immediate Release
April, 13 2011, 02:08pm EDT
Contact:
Leslie Anderson, (703) 276-3256 or landerson@hastingsgroup.com.
Experts: As Traditional Banks Fail to Meet More and More Local Needs, Community Investing Poised to Break Through to Mainstream in 2011
Already One of the Fastest-Growing Aspects of Socially Responsible and Sustainable Investing, Community Investing’s Continued Rise Seen As Fueled by 3 Major Trends Among Consumers, Institutions.
WASHINGTON
"Community investing" is already the unsung hero in thousands of towns and neighborhoods across America, where it quietly has added jobs, local services and support for small businesses whe re traditional lenders have been unable or unwilling to do so. In 2011, community investing is poised to become much more widely visible as a result of three trends that could boost related investments from individuals and institutions, according to experts from the Social Investment Forum, Green America, One PacificCoast Bank and the National Federation of Community Development Credit Unions.
Community investment involves capital from investors and lenders that is directed, typically via community development financial institutions (CDFIs) and other community investing institutions, to communities and individuals that are underserved by traditional financial services. According to a major 2010 Social Investment Forum Foundation report (the most recent data set currently available), assets in community investing institutions rose more than 60 percent from $25 billion in 2007 to $41.7 billion at the start of 2010, reflecting healthy growth in all four categories of community investing institutions: community development banks, community development credit unions, community development loan funds and community development venture capital funds. * (For more information, see https://www.socialinvest.org/resources/research/documents/2010TrendsES.pdf.)
In a news conference today, experts from the Social Investment Forum, Green America, One PacificCoast Bank and the National Federation of Community Development Credit Unions identified three trends expected to continue leading to a surge in community investing assets in 2011:
- Consumers breaking up with mega-banks due to high fees and other abusive practices. Community development credit unions and banks have benefited from increased membership, assets and deposits in recent years, helped in part by consumers dissatisfied with mainstream banks that raised fees and cut back on credit as the recent US recession unfolded after December 2007. In 2010 and 2011, The Huffington Post and Green America have mounted major campaigns to encourage consumers to dump "abusive mega banks" in favor of community investing institutions. (See https://www.greenamerica.org/about/newsroom/releases/2011-02-14.cfm and https://www.adweek.com/aw/content_display/data-center/research/e3id2a9a8ed9c4a58a957d7c4820cedc7f9 for more information.)
- Rising institutional interest in community investing. The latest SIF Trends report shows that institutions in several categories are now investing more in community investing, thanks in part to SIF's education and outreach efforts around this issue to financial advisors, investment managers and religious institutions . According to new data from the Sustainable Endowments Institute, colleges and universities are now among the leaders in moving assets into community investing . Major institutions that have recently turned their attention to community investing include Mount Holyoke , Macalester College , Dickinson, Lehigh, Vanderbilt, and Skidmore .
- Growing consumer awareness of community investing success stories. Most CDFI banks were formed after 1994, initially as small institutions to serve communities that had little access to financial institutions and services. Over the past decades, these institutions have grown at a greater rate than conventional banks of the same size as they have met pent-up demand . An example of this demand: In a recent one-month period, Green America received nearly 15,000 orders and downloads for its new Guide to Community Investing, which helps individual investors take part in this fast-growing field. (See https://www.greenamerica.org/socialinvesting/communityinvesting/orderguide.cfm.) This is where success breeds more success: As community investing institutions meet local demands, they attract additional assets from individuals and institutions wanting to be part of such positive change and help local institutions to flourish.
Fran Teplitz , director of social investing & strategic outreach , Green America said: "The fact that community investing has grown steadily over the past decade, despite fears of capital constraints and the impacts of the market downturn, is a strong indicator for future growth. Add to that consumers ' continuing frustration around mega-banks, and the growing movement to support local economies, and we're likely to see continued growth of CI in 2011 and beyond."
Meg Voorhes, deputy director and research director, Social Investment Forum, said: " For many years, investment managers and advisors specializing in socially responsible investing have helped clients allocate a portion of their portfolios to community investing. It is exciting to see a new wave of interest in community investing as foundations and other institutions look for investments that will have high social impact."
Cliff Rosenthal, president and CEO, National Federation of Community Development Credit Unions, and a member of the board of directors of the Social Investment Forum, said: "Many Community Development Credit Unions and other CDFIs have played a crucial role throughout the recession in providing credit to borrowers who were shut out of the conventional capital markets."
Kat Taylor, founding director, One PacificCoast Bank, said: "We believe that Beneficial Banking -- providing fair and transparent transactional and savings services and loan capital for business and job growth in all communities -- is what all banks should deliver for the privilege of federal deposit insurance. In particular, we focus on lending that supports clean technology solutions, regenerative agriculture and natural resource use, critical community institutions, job growth and a living wage, as well as the resilience of consumers in times of setback. Banking that supports people and the planet will be critical in serving the nation as a whole as well as marginalized communities in order to move toward reliable prosperity for all. We understand that a bank cannot measure success and sustainability by focusing on profits alone, which is why community development financial institutions are so important."
BACKGROUND: THE RISE OF COMMUNITY INVESTING
According to the Social Investment Forum's 2010 data, top-level trends in community investing include the following:
- Assets in Community Development Banks grew to $17.3 billion by yearend 2009, up 34 percent from the 2006 total of $12.9 billion and sixfold from $2.9 billion in 1999.
- Assets in Community Development Credit Unions grew to $11.1 billion at the end of 2009, up 76 percent from $6.3 billion in 2006 and by more than a factor of 18 since 1999, when they stood at $610 million.
- Assets in Community Development Loan Funds grew to approximately $11.3 billion at the end of 2009, up approximately 145 percent from $4.6 billion in 2006 and more than six times from $1.7 billion in 1999. Of the 2009 total, approximately $2.2 billion are in US-based international microfinance funds that provide or guarantee loans for small-business creation and community development abroad. *
- Assets in Community Development Venture Capital Funds grew to $2 billion in 2009, an increase of 67 percent from $1.2 billion in yearend 2006 and 1200 percent from $150 million in 1999.
A major factor in CDFIs' asset growth has been the capital they have received from the US government, as well as foundations and other institutional investors. US Treasury programs stepped up assistance to CDFIs in 2009 as part of US government economic stimulus and recovery programs. In recent years, a number of campaigns, touting such concepts as "program-related investing" and "impact investing" have helped to increase awareness among foundations, other institutional investors and high-net-worth individuals of the high social impact associated with community investing strategies. However, the threat of a pullback in federal support for CDFIs has the potential to put a crimp in the rise of community investing as the very point where communities need it the most, according to the experts.
Green America is a not-for-profit membership organization founded in 1982 and known until January 1, 2009 as "Co-op America." Green America's mission is to harness economic power--the strength of consumers, investors, businesses, and the marketplace--to create a socially just and environmentally sustainable society.
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\u201c"It is not moral that 3 people on top own more wealth than the bottom half of American society, 165 million Americans. \n\nThat's not moral.\n\nThat's not right.\n\nThat's not what should exist in a democratic society."\n\n@BernieSanders in South Carolina rallying to #RaiseTheWage\u201d— Union of Southern Service Workers (@Union of Southern Service Workers) 1685827759
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"The Bible does not talk about taking a women's right from her body," Barber said. "The Bible does not talk about hating people because of their sexuality. The Bible does not talk about prayer in the school. The Bible does not talk about putting up the Ten Commandments. But more than 2,000 times—more than any other subject other than self-worship idolatry—the Bible says the way to please God is how we treat the least of these and those in the margins."
"In every age," he continued, "moral people have had to rise up and decide to make the moral case that things have to change and injustice has to move."
In contrast to a living wage of $17 an hour at the heart of the rally, Bishop Barber said the current federal minimum wage of $7.25 should be seen as a "death wage," given the rate at which poverty kills in the country.
\u201c"Poverty is the 4th leading cause of death in America. It's higher than homicide. $7.25 is a poverty wage which means $7.25 is a death wage. \n\nWe've got to fight against people dying." @RevDrBarber with @BernieSanders in South Carolina rallying to #RaiseTheWage\u201d— Union of Southern Service Workers (@Union of Southern Service Workers) 1685827249
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The people in power, said Barber, "They are afraid of this room."
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He made a final point about those in power and how the forces at work denying freedom and dignity to certain people in society are also the same forces attacking democracy and economic equality.
"The same people who are attacking gay people, are attacking our voting rights," Barber said. "The same people who are attacking trans people, are attacking our healthcare. The same people trying to take away a woman's right are also against living wages. If they are cynical enough to be together, we oughta be smart enough to come together around the moral agenda."
Barber said the southern states are "key" and must not be ignored by federal politicians, arguing that the Carolinas, Tennessee, and others are not necessarily red states, but just states that have been "intentionally divided" and where workers have been disempowered.
"We need a living wage and we need it now," Barber declared. "It's time for change and justice has got to move. You've got to make them hear you. You've got to make them see you. You've got to make them feel your power."
He added: "This is a moral fight. We can't allow corporate greed to sell out and tear the souls and substance of this nation apart. This is a nation-saving fight."
Prior to Barber, local hairdresser Lydia Stewart spoke about working conditions at the salon business that employs her, Great Clips, and the organizing effort she and her colleagues have undertaken with the Union of Southern Service Workers to increase workplace safety and win higher wages.
\u201c"At my job we're organizing [with @RaiseUpTheSouth] because change has to be brought. My store is mostly Black women and they have no respect for us, they treat us like a pair of hands." @GreatClips worker Lydia Steward with @BernieSanders and @RevDrBarber #RaiseTheWage\u201d— Union of Southern Service Workers (@Union of Southern Service Workers) 1685824077
During the rally, State Rep. Wendell Gilliard (D-111) also spoke and talked about the need for a true living wage in the state that should be no less than $17 an hour.
"We have come a long way," Gilliard said during his remarks, "fighting for the rights of 'We the People.' This is not about party, it's always been about the people. Charlestonians work hard and deserve more for what they do to keep this region running. They deserve more than a minimum wage—they deserve a living wage!"
"With rising costs of living," Gilliard continued, "more and more of our neighbors, our friends, and our family members will slip into poverty unless they see an increase... $17 an hour is a living wage. It will help poverty from swallowing up more victims and help increase the standard of living here in Charleston."
\u201cLIVE from CHARLESTON: No one in America should be forced to work for starvation wages. Join us as we rally in South Carolina for an increase in the minimum wage. https://t.co/5aQjgGGlnw\u201d— Bernie Sanders (@Bernie Sanders) 1685823586
In closing his speech for the rally, Gilliard said the event with Sanders and Barber could not simply be a moment in time, but must signify the existence of a movement ready to fight for the long haul.
"It cannot be a moment in time," the state lawmaker said. "It has to be a movement that will live until we get it done."
In his headliner address, Sanders echoed what Bishop Barber argued, that the ruling elite and monied oligarchy "wins" when they divide up the working class and those living in poverty.
"In every way that you can think," said Sanders, "there are really smart people—out there polling today—saying: How do I get you to vote against your own self-interest? How do I get black and white and Latino and Native American, Asian American, gay, and straight against each other so that the big-money interest laugh all the way to the bank."
"So what our movement is about, is precisely the opposite of what the big-money interests want," he continued. "They want to divide us up and we are determined to bring working people together—black and white and Latino—all of us together around an agenda that works for us not just the billionaire class!"
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