Ethic Profile — Neighborly

Local is all the rage these days. From your locally sourced kale, to your locally produced artisanal toast, closer is better. And when it comes to investing for your future, most people don’t even realize that some of the best investments may be at the end of your street, the street itself, or the bridge between your town and the next. These ‘local’ investments are called Municipal Investments, or Muni’s, and they’re investments in your local district.

Local municipalities need cash for projects. But, according to Neighborly, a San Francisco based startup, there is a serious and debilitating disconnect between the market and those who could benefit from investing in it. It turns out muni’s are actually a pretty smart investment — they typically make you way more than if your money were invested in a savings account, a little less than if you were to match the S&P performance, but typically are a much less risky investment. And the added benefit? You typically don’t pay capital gains tax on your bond returns. That makes them the perfect investment choice for anyone interested in a long stable investment, taxed at a low rate, all the while supporting a local infrastructure project.

Neighborly was founded on the belief that public finance should be safe for you to invest in, simple to understand, and easily accessible to local communities. It all began over breakfast in Kansas City, Missouri as Jase Wilson and Patrick Hosty were discussing a $500 million bond issue before local voters that would pay for improvements in the city’s sewer system. Jase and Patrick realized that the municipal bond industry was seriously lagging in innovation — so they set out to develop a tech solution for municipal investing.

Modernizing access to public finance has a lot to do with educating consumers and making it easy to understand the investing process. “Part of the challenge and opportunity is to turn one of the least understood investment classes in the world into what could and should be one of the easiest and most accessible,” says founder Jase Wilson. The number of Americans investing in muni bonds has declined steadily over the last couple decades — the typical muni bond investor is older, and often a high-net-worth investor looking to minimize their taxes. Innovation in munis is lagging behind other sectors of financial technology — the investment process is long, complex, and not easy to navigate.

Neighborly is in rapid pursuit of a noble and tech-enabled mission: to foster a healthier relationship between global banks and our nation’s places. They’re doing this by making the market accessible to people like you and me. And in the 21st century that means developing a technologically advanced web interface beautifully designed and highly functional. Bringing this investment process online helps to streamline an archaic process made of fax machines and notaries, making it a realistic and attractive investment option for a new generation of investors. And it seems like it’s working — the Neighborly customer is a generation or two younger than what most traditional bond salespeople will tell you is the typical age of a muni bond buyer today.

Neighborly is still a young company, but if their recently announced competition link is any indication, they’re well on their way to transforming the way public finance works in the 21st century. The beauty of Neighborly’s solution is that it sits at the intersection of finance, government, and technology: the perfect opportunity to use technology for social impact.

Ethic and Neighborly have recently formally initiated a collaborative working relationship with respect to sustainable fixed income securities.

For more information on Neighborly or to learn more about muni bonds, investing, and the public finance market on Neighborly, you can check out their website at neighborly.com.


Ethic is a San Francisco based startup bringing sustainable investing mainstream through technology, data science and design. We empower you to invest well, in companies you respect, for a fraction of the cost. Learn more at weareethic.com.

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