How Making Money Can Make a Difference: Bringing Transparency and Choice of Impact to Banking
An inside look at the Polsky Incubator company, Mighty, and their upcoming speaker series on the impact economy.
“Money is not just sitting in a bank; it’s in motion.”
This quote represents the epitome of impact banking, a seldom-known but important practice whereby money achieves incremental community value as well as a financial return. For one startup working in the Polsky Incubator (formerly the CIE Incubator), Mighty, they’re working to close the gap between impact-oriented customers and impact-focused banks while highlighting the positive effects impact banking has on communities and individuals.
The impact economy, comprised of socially responsible investments and loans, is valued between $50 billion and $70 billion. By 2020, it is estimated that there will be between $400 billion and $1 trillion worth of investments in the impact economy, creating opportunities for those seeking capital and those providing it.
Impact banks lie at the heart of this economy, specialized in their abilities to allocate financing for small business development, home ownership, sustainable agriculture, and underinvested, low-income and minority populations.
Unfortunately, the successes of impact banks often go unnoticed as banking data remains difficult to interpret for average consumers. “The majority of people see banking as a black box,” said Megan Hryndza, Mighty’s CEO and cofounder. “We’ve observed that the majority of people don’t understand differences between any kinds of banks.”
Chicago natives Megan Hryndza and Nisha Sutaria cofounded Mighty to solve this problem. By making data easier to digest and clearly illustrating one’s options, they plan to make impact banking more ubiquitous in modern finance. Mighty’s director of operations, Sutaria, has spent over three years analyzing community banking data, working with former CEOs of community banks and affiliated organizations. Using public data, she works to find and share impact banking success stories that can help inform everyday people on making better banking decisions. For Mighty CEO, Hryndza, she describes her work as creating a digital opportunity to facilitate conversation in an area that has become a trending topic since 2008’s credit crisis.
Speaking about the upcoming launch of their pilot website, a mobile-friendly interface for users to easily access and interpret data about impact banks, Sutaria likened the platform to a nutrition label. Consumers may not understand the science behind calories and sodium content, but they can make informed decisions about food purchases using the information provided in a familiar template. Similarly, consumers might not understand the complexities of banking balance sheets, but Mighty seeks to provide them a framework to make informed decisions about the banks with which they can achieve their desired impact.
“Money is emotional, but so far, banking decisions have been absent of considerations beyond transactional value,” said Hryndza. By bringing complex data to life in a digestible and human-centric format, Hryndza and Sutaria aspire to help “break down barriers that limit a person’s agency in banking.”
Supplementing the launch of their innovative platform, Mighty is hosting a speaker series this summer to educate community members on the basics of impact banking.
The first event, held on July 8, covered best practices of impact banks and implications for future generations. Christina Hachikian, Executive Director at the University of Chicago’s Social Enterprise Initiative, moderated a discussion with Mary Houghton and Ron Grzywinski, founding members of ShoreBank Corporation, a $2 billion community development bank that inspired and catalyzed impact banking innovation around the world.
The second talk, on July 15, will focus on the role of impact banking in societal systems, specifically education, jobs, and healthcare. Sara Lindholm, Midwest Director for The Community Builders, Malcolm Bush, former President of the Woodstock Institute, and Ted Gonder, cofounder & CEO of Moneythink, will explore inquiry into the ways in which impact banks shape local economies for long-term community success by creating prosperity and fostering innovation.
Moving from a community focus to an individual focus, the third event, on July 29, will discuss the influence of banking in creating or inhibiting the accumulation of family wealth and credit. Beryl Satter, a Professor of History and American Studies at Rutgers University and Guggenheim Fellow, will lead the discussion. Her background in exploring the intersection of racism and capitalism in Chicago and across the country lends an interesting perspective to the role of impact banks in community development via individuals. She will be joined by Ronald Milsap of Urban Partnership Bank in Chicago, who will provide insight from his vantage as a banker serving African American communities.
The fourth event, on August 8, will explore the role of cultural institutions in community economic development. “We seek to cultivate discussion exploring how the preservation of cultural diversity influences community and economic resiliency,” said Hryndza on the final discussion in the series. “Art isn’t just nice: it can serve as a unique and important platform for diverse voices and perspectives to influence economic thought.” Leana Flowers, Chairman of Bronzeville Retail Initiative, will speak with Tiff Beatty, Manager of Chicago Humanities Festival, about the interactions between economic and cultural institutions to generate positive outcomes for both sides.
As socially conscious companies and products make headway in the modern marketplace, Mighty is positioning itself to be at the forefront of impact banking, which will play an ever-increasingly vital role in this space.