Thursday, October 13th, 2011 by Dan Apfel, Executive Director
Students at Wesleyan submitted the following letter to the Trustees of the University. If you’re an alum or staff member at Wesleyan, offer them your support.
To the Trustees of Wesleyan University,
cc:
Michael Roth, President
Anne Martin, CIO
Wesleyan University finds itself today at a major crossroads in financial strategy. The continuing aftereffects of the first devastating economic crisis of the twenty-first century, and the relatively small size of our endowment that has resulted partially from it, convene to place the University in an ideal position to reevaluate how it goes about investing the money it receives from its alumni and friends.
In this letter, in addition to calling for the initiation of just such an appraisal by the Trustees of the University, and in addition to offering to the Trustees a few examples of prudent and ethical tactics for future endowment development, the Wesleyan Socially Responsible Investment Coalition also brings before the Trustees a few basic demands for investment transparency that will serve as a starting place for this process. These suggestions and demands are motivated by a love of Wesleyan and what it represents, a gratitude for all the opportunities it has afforded us, and a commitment to ensuring that it remains such an excellent institution for a long time to come.
Friday, May 20th, 2011 by Martin Bourqui, National Organizer
by Brett Vetterlein, Community Investment Campaign Organizer
Bethex Federal Credit Union, one of the two institutions working for the Bronx community that Fordham will be supporting.
In May of 2010, a group of student activists and I got together in my apartment to talk about the possibility of community investment at our school, Fordham University. This meeting would not have happened if a month or so earlier I hadn’t met with Martin Bourqui, the National Organizer for REC. He contacted my roommate Michael and I because we had previously talked to REC about endowment transparency and other responsible investing topics we were interested in. Things had kind of fizzled out by this point, but Martin thought otherwise. I had heard about REC’s new community investment campaign from Martin’s predecessor Cheyenna. It sounded good, but at the time I was too interested in what I had already learned about and didn’t see what turned out to be the right thing to do
By the Spring of 2010, I had been a part of a few unsuccessful campaigns. When I heard what Martin had to say, I knew it was a good idea. Community investment just made sense at Fordham for so many reasons. We were a private university located in the middle of a poor urban area that everybody knows, the Bronx. Fordham also has a strong history of connections to the Bronx, spanning back to the 1960s and especially the 70s during the “Bronx is Burning” period. At that time, Fordham students, alumni, and Bronx community members got together and began organizing for a better Bronx. That legacy has continued with Fordham’s strong community service program. I thought I could make the connections to continue it further.
The unofficial slogan of our campaign was “the Bronx deserves better,” and with the help of the Responsible Endowments Coalition, I think we gave them something better.
The university plans to invest $500,000 into Bronx financial institutions over the summer: $250,000 in Bethex Federal Credit Union and $250,000 in the Burnside Ave., Morris Height Banking Development District of the Amalgamated Bank. This money will be used by Bronx community members to take out a mortgage on their first house, buy a car, go to school, and start small businesses – all things that would help lead to economic empowerment for one of the country’s poorest areas.
Our group, Fordham for the Bronx, isn’t ready to stop either. Although I will have graduated, the group is looking into ways that we could get other large institutions in the Bronx to begin investing in Bethex and Amalgamated. The Responsible Endowments Coalition really helped us create strategy and implement the tactics necessary to our successful campaign. Personally, REC has allowed me to take on leadership and supported my decisions throughout the campaign, giving me the tools to be successful. I couldn’t have done it without the other members of Fordham for the Bronx, or without the Responsible Endowments Coalition.
Way to go!
Ed. note: Congratulations to Brett and Fordham for the Bronx for your amazing work!
Tuesday, November 2nd, 2010 by Martin Bourqui, National Organizer
by Caroline Incledon, Community Investment Campaign Organizer
Now that we are working on writing a community investment proposal at Tufts, we are also beginning to narrow down our list of banks. While initially searching for community development financial institutions (CDFIs), the most prevalent topic was the idea of “community”. There are so many CDFIs in the Tufts community of Medford and Somerville, not to mention Cambridge or even greater Boston. Therefore, should proximity to the school be one of the most important factors? Or would a bank with a wider community reach be most effective? These were questions we had to consider.
Next, we needed to research the banks themselves. What were their rates? Are these rates comparable to other banks (such as the bank that your school currently has its money in)? Ratings are also important, and we used independent assessment sites such as bankrate.com or bauerfinancial.com to investigate. On the other hand, try to get a real sense for your banks reputation with local residents. For example, a bank that we were looking at was voted “highly” by small business owners in a local poll. Those factors can be just as significant when choosing a bank. It’s also valuable to get a feel for the bank customer service. Is the bank responsive to your calls? When you arrive at the bank, is your presence acknowledged? One of the main reasons we are encouraging community development banks is their personal touch and commitment to the community, so make sure that you can really see this in a tangible way. Banking with a bank like this might also encourage students to move their money and make the school feel more secure with its decision.
Finally, assessing a CDFI’s community commitment is crucial. This isn’t very hard to do – community banks have a professed desire to work within the community, and they will provide evidence of their initiatives and programs. Once you begin comparing banks, those with exceptionally high commitments will stand out. If you are still unsure, or want to know more about their real impact, you could also independently research some of their community programs. A CDFI with a high and demonstrated community commitment is priority. It will signal to your school administrators the real value of their placing the endowment in the bank and will strengthen town-gown relations so much more than simply moving money into a local bank would. Furthermore, a bank’s extensive community commitments might signal their receptiveness at working with your school later on to create co-curricular opportunities between your bank, school, and the community.
There is a lot that must go into bank research, and it can get confusing. However, try to think about the two “R”s – Reach and Reputation. The bank’s reach refers to its commitment within the community and what that community is; while reputation refers to its literal financial reputation but also its relationships with the community. Your list will inevitably begin to narrow.
Sunday, January 10th, 2010 by Jay Cassano, Northeast Student Organizer
Right before New Years the Huffington Post ran an article, "Move Your Money: A New Year’s Resolution," that encouraged people to move their money from one of the big six national banks into small, local banks. Since then the initiative has launched into full swing, with its own website and a bustling facebook page , garnering it extensive media coverage in both the mainstream press and the netroots.
In general I support the idea of this campaign, and if you’re still looking to make a slightly late New Year’s resolution, you should hop on the bandwagon. Just because you didn’t break up with Bank of America last year, doesn’t mean you can’t do it this year. And be sure to provide yourself with the proper scaffolding for making any serious resolution come to fruition.
My one issue with the campaign is that that it specifically focuses on local banks and largely ignores credit unions. At first the MYM campaign didn’t mention credit unions at all until a large number of people (myself included) wrote to them pointing out that credit unions are yet another viable option with their own unique benefits over both the big banks and their smaller, local counterparts. But even on the website, MYM still somewhat dissuades people from choosing credit unions over local banks:
Not all community banks are risk free. Some of them got involved in the same risky behavior that took down some of the biggest banks.
We suggest two options for looking into the small and community banks in your area:
OPTION ONE :
Thanks to the volunteer services of a group called Institutional Risk Analytics (IRA), you can get a listing of the most sound community banks near you. IRA lists only banks that, according to its rating system, which is based on government data, get a grade of “B” or better.
Credit Unions: Many folks have written us suggesting that people should examine credit unions. Like the FDIC for banks and thrifts, the National Credit Union Administration insures the deposits of credit unions and is a good resource for financial data on specific institutions. Credit unions do not disclose financial data in the same way as FDIC-insured banks. As a result, credit unions are not presently included in the IRA ratings database, which covers over 8,000 federally insured banks and thrifts. IRA is developing a method to rate credit unions in a way that is comparable to the IRA bank stress ratings. We’ll be updating users of “Move Your Money” on this issue early in 2010.
The implication of this write-up on credit unions is that because credit unions don’t disclose their financial data in the same way as banks it is therefore impossible to tell whether or not credit unions engage in the kind of risky behavior that we all want our financial institutions to steer clear of. Unfortunately, this misses the fundamental difference between credit unions and banks (both the large ones and the community ones). Unlike at a bank, a depositor at a credit union is an owner of the credit union and most credit unions subscribe to the "one member, one vote" model. That means that the credit union is legally responsible to you and not to its external shareholders like any bank is; at a credit union you are in effect the shareholder. This might even mean that there could be a bit of democracy in our economy (imagine that!).
The larger point here is that while moving from a behemoth oligopolistic financial institution to a small bank is definitely a step in the right direction, it doesn’t solve the core problem. The issue is that people do not have any say or control over what happens with their finances once they deposit them somewhere for safe keeping. While a local bank may be less likely to indulge in risky or fraudulent behavior than a big bank, nothing is actually stopping them from doing so. You’re essentially relying on the benevolence and good will of your local bank manager to not take advantage of you. Moving your money to a local bank doesn’t create deep structural change, only cosmetic change. Only through democratic control of the economy can we foster financial stability that benefits everyone, not just the elites.
Let’s see if the HuffPo crowd catches on to the difference.
