Find Out Where Your Bank Puts Your Money

B the Change
Nov 30, 2017 · 6 min read

By choosing a bank that invests in projects, organizations, and causes that align with your values, your bank account can contribute to a positive change in the world.

Photo by Fabian Blank on Unsplash

When you select a bank, you’re not really choosing a place to hold your money, because banks don’t keep your money in the vault or in your account. The bank lends it out to other customers, invests it in organizations or projects of its choice, and sometimes even uses it to fund political candidates.

So, before you select a bank, find out what it does with your money. You might be surprised to find your money is supporting fossil fuels, nuclear weapons, or candidates working to undermine basic human rights. By asking what your bank does with your money, you can be in control of whether your money is being used in ways you would approve of.

If you’re unsure what your bank is doing with your money, or if you’ve asked and want to move your accounts, what’s next? Where should you move your money?

When you’re considering a new bank, check whether the institution has received stamps of approval by trusted third parties, such as Certified B Corporations, as these banks are more likely to share a mission and values that support the advancement of social and environmental causes.

Below are a few examples of B Corp banks that are working to make a difference in the financial sector and our options as consumers.

Banks’ Investment Options Matter

When you find a mission-aligned bank, such as B Corp Amalgamated Bank, you can support companies and investments that you believe in. Amalgamated, “the bank of the progressive community,” is the largest U.S. majority union-owned bank, with $4 billion in commercial bank assets and over $45 billion in custody and investment management assets. In the words of President and CEO Keith Mestrich: “Our customers can rest assured that there’s not a dime going to a climate-change denier, someone who is trying to withhold rights from the LGBT community, or someone who’s against a woman’s right to choose.”

B Corp banks like Amalgamated are committed to transparency, and are proud of the social, environmental, and political programs and causes that they support. Amalgamated is the bank of choice for more than 600 Democratic campaigns and organizations; hundreds of unions, including teachers, firefighters and football players; progressive nonprofit organizations like Jobs with Justice, NARAL, and Color Of Change; and environmentally and socially responsible companies who are helping create stronger, safer and cleaner communities.

Such mission-driven banks place people’s money in businesses that mirror their values, and are banks for people who want to affect change. Moving your money to a values-based bank like Amalgamated Bank is a small way for your money to make a positive difference in the world. Says Mestrich, “I want to make sure that we live up to our axiom of helping those who do good, do better. We bolster the work of our customers who every day stand up for civil rights, women’s rights, and human rights.”

Banks’ Role in Social Justice

Kat Taylor and Tom Steyer are founders of a head-spinning variety of changemaking activities. Taylor is co-CEO of Beneficial State Bank, a community bank based in Oakland, California, serving the West Coast. The bank’s founding team donated all the economic shares to the Beneficial State Foundation. Steyer is founder of NextGen Climate, an environmental nonprofit and political fundraiser. The couple’s 1,800-acre TomKat Ranch in Pescadero, California, is home to a working ranch and an educational foundation that serves as a sustainable-ag learning center.

“We established operating entities to try to get the insights of an actor within each system. We started Beneficial State Bank within good money, and ultimately the two venture funds, Brightpath Capital and Radicle Impact. We have the TomKat Ranch Educational Foundation and LeftCoast GrassFed business within good food,” says Taylor.

When the bank was created, the founding team donated all the economic shares to the Beneficial State Foundation. That means the Foundation owns all of the economic rights of the Bank — when profits of the Bank are distributed, they can only be distributed to the Foundation which is mandated to reinvest those proceeds back into the communities and the environment on which we all depend. This ownership model aligns the bank’s incentives with the triple bottom line and the values of the bank’s customers.

This philosophy is summarized in the phrase “Beneficial Banking.” Beneficial State offers a full line of traditional banking services, but with a distinct focus on the traditionally underserved: low-income communities, sustainable businesses and job creation. And the bank looks for ways to help non-profit organizations and businesses that typically find conventional financing out-of-reach, such as specialty agriculture, renewable energy, green building and low-income housing.

Banks’ Role in Bolstering Social Entrepreneurs

Business Development Bank of Canada (BDC) has been financing social entrepreneurs for several decades. Recently, the company partnered with B Lab Canada to further the conscientious-business movement and provide tools to the social enterprises throughout the country.

To make sure it stays accessible to its clients, BDC now has more than 100 business centers around the country. That helps keep the conversations going and ensures a sounding board is nearby for anxious entrepreneurs. “We talk regularly with our clients,” says Carla Heim, BDC’s senior adviser for social entrepreneurship. “We want to understand what makes them tick, what keeps them up at night. It’s one of the most important parts of the job of our account managers.”

BDC has also made a commitment to create more gender balance in Canadian business ownership. In its 2016 annual report, the bank reported having authorized CA$274.4 million in loans to women-owned businesses, and committing to an increase to a minimum of CA$700 million in loans over the next three years.

Even though each of its partners ultimately charts its own course, the BDC also focuses on introducing companies to new ideas and opportunities. Recently, the BDC took a step that it believes will help its clients better analyze themselves. It entered into a partnership with B Lab Canada with the goal of making more Canadian businesses aware of the benefits of becoming B Corporations. As of October 2016, 174 B Corporations were certified in the country, with almost a third of them joining within the previous year. Initially, most firms that became certified were small companies. Now, a growing number are larger, more established businesses.

BDC is now including among the tools it makes available to clients a distilled, quick, 30-minute version of the B Impact Assessment, which is the detailed performance evaluation that’s part of B Corporation certification. The idea is to introduce businesses to the process and encourage them to consider getting certified.

“We see that becoming a B Corp brings advantages: brand identity differentiation, powerful social media appeal, line-ups of potential millennial employees and membership in a club whose members seek to do business with each other. We’ve provided roughly $80 million in financing for B Corps and other social-purpose companies, and we’re confident it’s money well-placed,” says Craig Ryan, BDC director of social entrepreneurship. “Also, we’ve invested $1.5 million in grass-roots organizations and initiatives that support social purpose entrepreneurs across Canada, from Le Salon 1861 in Montreal to RADIUS at Simon Fraser University.”

These three banks are part of the larger community of Certified B Corporations. Read more stories of people using business as a force for good in B the Change, or sign up to receive the B the Change Weekly newsletter for more stories like the one above, delivered straight to your inbox.

A network of business & tech podcasts designed to accelerate learning. Selected as “Best of 2018” by Apple.

B the Change

Written by

We exist to inform and inspire people who have a passion for using business as a force for good in the world. Published by B Lab and the community of B Corps.

A network of business & tech podcasts designed to accelerate learning. Selected as “Best of 2018” by Apple.

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