Investors Want to Align Their Dollars with Racial Justice Demands

SEED for Oklahoma Kids is a statewide effort to help newer generations climb the educational ladder and build assets. Parents are offered $1,000 in their newborn's name and set aside in a college savings account, destined to be used for pursuing college or trade school education. The concept of the program is not unique to Oklahoma. Other states like Nebraska, Illinois, Maine, Pennsylvania, and more have implemented similar programs. "Automatic enrollment in a saving program, with the ability to opt out, turns out to have a much higher participation rate than relying on individuals to take the initiative."

Women tend to invest in female-owned and run companies, but men disproportionately invest in male-run companies, which means female companies lose out on a huge market. Some male investors, such as Adam Quinton, see the female-run businesses as a better investment because of the lack of competition and that these firms tend to outperform the male-owned companies, this finding is shifting where people invest.

A large number of Americans are "unbanked or underbanked"—meaning they are not tied to traditional financial institutions to manage their money—which makes saving difficult. Walmart has managed to serve this population with a debit card program called MoneyCard that provides financial incentives to users to regularly put aside money into a "vault." This approach effectively takes into account behavioral economics in terms of how humans approach short- versus long-term rewards. Launching in August 2016, the program's membership had grown more than 130% and savings increased by 38% by December 2016.

Lotteries aren’t usually considered part of the solution to a savings crisis experienced across America, particularly by the nation's poor, but with more hopefuls purchasing lottery tickets than setting aside rainy day funds, one organization, Doorways to Dreams, is working to change federal and state laws to allow banks to offer prize-linked savings. In Michigan, the programs have seen some success.

Every year, investors who are shareholders in publicly-traded companies have the chance to vote on proposals that shape the way the companies address issues like climate change. Whether or not they pass, climate-related proposals send a clear message about the problems activist investors want to see addressed which can spur action.

Community banking empowers marginalized communities that are not able to secure financing for homes and businesses through traditional financing. Establishing community banks allows members of these communities to bypass structural and institutional barriers in order to invest in themselves. Abacus Bank has a long history of advocating for businesses and families in Chinatown.

Agency banking and point-of-sales terminals provide financial services to Obawole, a community under-served by banks despite its proximity to Nigeria's banking center. Agents are third parties representing banks. They provide services such as accepting deposits and making withdrawals, replacing often-decrepit and unreliable ATM machines. Technical failures and distrust can mar relationships with the banking public, but the services provide a needed convenience, and create jobs as well.

Firebrand Artisan Breads hires people with high barriers to employment, such as people experiencing homelessness or who were formerly incarcerated. The higher-than-minimum-wage starting salary, paid time off, and insurance benefits provide sustainable and secure employment to people whose life circumstances make it harder to get a job. In order to raise capital while maintaining their employment model, the owner worked with lawyers to become a perpetual purpose trust, an alternative ownership model that allows the company to sell shares to private investors while ensuring their principles remain in place.

Due to pressure from shareholders and asset managers to invest sustainably, there has been a rapid growth in environmental, social, and government investing. Assets in sustainable mutual funds globally reached $1 trillion in the second quarter of 2020 and fund managers rolled out 107 new sustainable funds in Europe. Despite this increase in interest, shareholders continue to grapple with balancing sustainable considerations with investment decisions.

A study found that students without debt ended up with a higher income than students with debt, an overall benefit to the larger economy. In the U.S., "44.7 million American adults are saddled with student debt totaling $1.6 trillion.” This article explores what other countries like Germany, New Zealand, and South Korea, among others have done to lower the cost of university tuition and thus student debt.