By Sandy Robson

Submitted Spring 2008

As a human rights activist at Macalester College in Minneapolis, Minnesota, I was concerned by the fact that although rights are often violated by multinational corporations, there are few avenues through which activists can impact corporations overseas. Joining the Social Responsibility Committee my freshman year in 2005, I saw an opportunity to learn how investments can be leveraged not only to influence corporations from afar, but also to affect positive change through good business practices. Trying to learn more about responsible investment, I was excited to find the Responsible Endowments Coalition online, which has had a major influence on my activist work ever since.

At the Responsible Endowments Coalition national conference in October 2005, I was inspired me to do an independent study on the possibility of investing Macalester’s finances in the local community. By placing our accounts in a community bank, I found that Macalester could help fund businesses and mortgages in low-income communities without putting the college’s resources at risk. An energetic alumnus and I proposed the idea as an educational opportunity for students. After considerable effort from both the community service office and the chief financial officer, the college moved $500,000 to University Bank in August 2007.

The bank is currently establishing student internship opportunities both within the bank and the businesses they support, and Macalester faculty are designing classes that explore neighborhood demographics. Students, faculty, and staff will be encouraged to move their own accounts to University Bank, and an ATM will be placed on campus. It is my hope that the college will move a greater proportion of its funds, and that other schools will do the same. This enormous influx of funding could further empower urban communities, especially communities of color, that have historically been underserved by financial institutions.

This year, returning to the REC conference to present Macalester’s success was a real thrill for me. It has given me the confidence in the past month, working with REC, to propose Sudan divestment and investigate joining the Investor Network on Climate Risk. Working with great administrators at Macalester has taught me to appreciate the open minds that shape my school, and given me new insight into ways that students can really change the world!

Sandy Robson is a 2008 graduate of Macalester College, where she was heavily involved in the social justice movement.

Curious about the logistics of moving your operating budget into a community bank? Here are the steps that Macalester students recommend:

1. Educate yourself about community investment.

One good resource is Equity Trust’s Investing in Social Change: A Student Handbook on Community Investment by Colleges and Universities. The most important part of this process is learning about the history of your local community, where immigrants live and why, racial housing policies of neighborhoods, politics of displacement for highway construction, why local banks were started and by whom, etc. In this case, professors may be your best resource. Demonstrating that you are learning in the process will make a strong case for the scheme’s educational value later on.

2. Get to know your institution.

Find out who is in charge of your operating budget, the endowment, purchasing, and any other assets/large accounts your college may have, and start building a respectful, friendly dialogue (or email exchange) with them. Respectfully ask for the information you need:

•    How much money is in the operating budget?

•    Where is it currently stored? What are the advantages to this bank as opposed to others? What rate of return does this bank offer?

•    How many different kinds of accounts are used, and for what purposes? (payroll, financial aid, purchasing, etc.)

•    What kinds of services does the college need for its everyday operations?

3. Identify local banks.

Community banks are identified by their federal community reinvestment (CRI) ratings. Do a little research and find out which banks seem to have the most active and creative programs.

4. Dream up a creative way of framing the project.

Brainstorm volunteer activities, internships, academic projects, etc. to keep the idea interesting and educational. Consulting faculty, alumni, and community organizations will get more people excited about the project and will increase the likelihood that ideas will actually be carried out. Avoid publicizing it widely before you have formally proposed the idea with the administration.

5. Meet with the most promising banks.

It may take a little work to figure out exactly who to talk to, but these banks have a vested interest in potentially getting your account: it’s a lot of money!  If they are aware that they may have to compete for it, they will be as helpful as possible from the get-go. Find out what kinds of rates of return they can offer, and whether or not they can insure deposits over $10 million. Don’t be afraid to ask questions; they don’t expect undergraduates to understand every part of financial lingo.

6. Draw up a serious proposal and present to administrators.

Keep in mind that this will take some extra work, and the proposal will need to address which staff will be responsible for actually moving the funds, checking up on the database, and so on. Acknowledge the need to assign responsibilities and give gentle suggestions, but leave general operations up to the administration. Within the proposal, be sure to include:

•    Numbers from banks saying that they can offer the same rate of return and insurance policies as your current bank.

•    Some sort of proof that the bank account could serve the needs of the college.

•    Co-curricular activities that could be associated with the project, and references to specific faculty/staff who are interested in being involved.

•    The possibility of good publicity for the school.

•    The fact that banks would actually be competing to give the best offer.

7. Send out a request for proposals from banks.

Make it clear to banks that you don’t want a simple bank account; you would like a more educational and mutually beneficial relationship. Can they track this account along with the accounts of other students? Will they put an ATM on campus? Will they offer internships and research opportunities to students?

8. Select a bank and move the funds!

Consider having the banks come to campus to present their proposals to a small committee of interested individuals. The decision-making process can pull in people who otherwise would be unfamiliar with the project. Choose the bank first on the basis of which deal would be the most fiscally responsible for the college, and then on the enthusiasm and creativity of the staff who will be heading up the partnership.

9. Keep up the energy.

Make sure to publicize your accomplishment widely to encourage other schools and individuals to follow suit. Have the bank offer accounts at freshman orientation, and make sure that there are people who are responsible for the upkeep of the banking partnership.