Seattle protest, May 2017
When we focus too much on what benefits us solely we can miss the more productive, long-term opportunities to benefit the world. Aren’t we now very clearly seeing that with climate change? Think about how unprepared we’ve been for this year’s extreme weather, despite long knowing from climate change research to expect it.
Along those lines, western culture seems to have become overly focused on immediate personal gains and how individuals can most selfishly leverage their own money. The fabulously wealthy are their own cohort (and one that I can’t comment on), but those with even small or medium amounts of money could be having a much broader, positive impact than they are. Is it too late?
Thankfully, this is something that Kat Taylor and the teams at Beneficial State Bank and Beneficial State Foundation are tackling head on. For those on the U.S. west coast, at least, the Bank looks to provide an alternative with huge societal benefit upside. I talked with her earlier this year to get an overview.
Roots of Good Money
As Skoll Foundation reported in 2011, a McKinsey study found, “social issues are no longer optional for today’s business leaders.” This is a concept around which Beneficial State Foundation and Beneficial State Bank seem to operate. As the Bank’s web site puts it, it's mandate is "to produce meaningful social justice and environmental benefits at the same time it is financially stable. The Foundation owns all of the economic rights of the Bank…” So, the profits 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.”
As Taylor told me, “You have to have a model that cares as much about environmental and social capital as it does about financial capital. Only within a community of practice like this can we create the muscle memory to do that, and to make the combined effort to monitor outcomes that will tell us whether we are doing that or not.”
Given all the social and environmental injustices that have become common practices, our society’s collective “muscle memory” has perhaps been developing from the wrong exercises.
Good Money In Practice
While the details of Beneficial State Bank’s B Corporation status and “good money” focus have already garnered much love , what caught my attention most in talking with Taylor was how deeply her personal passion ran for understanding the communities the bank serves.
That the particular challenges for banking customers in these un- and under-banked communities are unique is no surprise. That a bank would want to really get at that, and develop specific products with those challenges in mind, is. As an example, Taylor mentioned ”embedding” in Fresno for three weeks to get a real feel for that community pre-launch. How residents were currently using their money, and where the obstacles were to their saving or investment practices, were just two of the questions she wanted to explore on-the-ground and for herself.
New ways of handling and managing money don’t emerge from a one-size-fits-all customer programs. Beneficial State Bank, instead, helps local community residents learn new money management approaches from wherever they are in their unique circumstances.
One specific distinction Beneficial State makes in their good money approach is in loan evaluation. They have an eye on “ optimization rather than maximization,” as Taylor put it. This means that even when a particular loan opportunity looks amazing on paper, but only serves two of the three goals - social, environmental and financial - the Bank has to walk away. Hard as that may be, and Taylor cringed when she told me of a recent instance, the Bank is committed to practicing their mission and values.
Like yoga. Stick to it and you will see the benefits.
Good Money Is In Everyone's Best Interest
So, what might cause perfectly content, long-time traditional bank customers to switch to Beneficial State Bank? Lately, the fight against fossil fuels has been one issue inspiring such switches. Take, for example, the grassroots movement to fight the Dakota Access Pipeline (#NoDAPL), which was one reason KC Golden, Senior Policy Analyst with the Pacific Northwest-based clean energy economy nonprofit, Climate Solutions, decided to move his checking account from a traditional bank to Beneficial.
As Golden shared with me, he’s been paying a lot of attention to divestment and fossil fuels, and has gotten busy “untangling his money from a model that is lethal.” He realized he hadn’t looked all that hard at his previous bank’s business model or investments, and had started to see that moving his money could make a difference.
"You can either throw up your hands and become discouraged, or you can flip the script. This was a discreet opportunity to take some of my money and power back,” as Golden put it. The positive screen on Beneficial State Bank was clear to him, “in terms of community engagement and the localism and values of it.”
Beneficial State Bank is giving its customers that take-back opportunity, here and now. And, whether or not you are a potential west coast customer, their model is one to learn from. Their approach provides a whole new filter of issues to consider in re-researching your own bank, from Fresno to Bar Harbor.
In times where many of us are looking for productive ways to incorporate social activism into our daily doings, opting to contribute to the collective impact of “good money” seems a wise bet. Thankfully, Kat Taylor and her team have created a way to see money for its exponential good. Are you ready to follow their lead?