We've reported often on the growing interest among top financial firms in asset building and financial inclusion. Maybe it's that these giants feel guilty for helping cause a financial crisis that devastated the wealth of America's communities of colors. Or maybe it's that they've finally grasped that helping low-income people improve at saving and managing money translates into more customers down the line. We tend to suspect the latter motive is driving the train, since many financial services companies are working to promote financial inclusion on a global level.
Regardless, it's a striking trend, and you can see a good example of how it's growing in who's funding the upcoming Assets Learning Conference that in Washington D.C. from September 28-30. The Corporation for Enterprise Development says that a cadre of top financial firms—Citi, JPMorgan Chase, Prudential and Wells Fargo—have each contributed $250,000 to support this year’s event. The ALC is a bi-yearly gathering of nonprofit professionals, advocates, policy researchers, philanthropists and private sector representatives who discuss creating an “opportunity economy” in the U.S.
Like so many nonprofit initiatives, asset building involves communication and collaboration across multiple sectors, between people and organizations that don’t necessarily see eye to eye. The ALC takes on that challenge, and is just one part of CFED’s longstanding campaign to help the poor improve their financial situation.
Last year, we talked with CFED founder Bob Friedman about why asset building efforts have gained steam and where the funding is coming from. While CFED has been around since 1978, action is picking up in this space, and the growing diversity of funders is one reason why.
CFED lists around 15 financial service companies among its supporters, and we know that other groups in the asset building space are also pulling in support from many of these same corporate funders. The financial firms stepping up are joining long-time backers like Ford, Mott, Kellogg and Casey, who have seen asset building as critical to reducing poverty.
- Bob Friedman Explains How the Asset Building Movement Got Its Mojo—And Its Dough
- The Color of Money: A Top Bank and Nonprofit Take Aim at the Racial Wealth Divide
- New Ideas, New Funders: Has the Asset Building Movement Finally Arrived?
- Money on the Table: Why Funders Care So Much About This Tax Credit
Asset building is a great example of a field that is thriving because it attracts different funders for different reasons. There's also a range of specific niches within this field, whether it's developing new financial tools and products, helping people save for homes, helping kids save for college, helping tax filers get the refunds they deserve, and more.
A lot of the foundation funding for these issues comes with a social justice framework. Funders like Kellogg prioritize advancing financial opportunity among families of color, many of whom were the hardest hit during the last recession. Meanwhile, the financial firms are often more pragmatic, such as Prudential supporting CFED's 1:1 college savings matching program.
Still, some financial firms are more open to justice appeals than you might think. Witness JPMorgan's support for the Racial Wealth Divide Initiative that we reported on recently. Or how Citi is backing the civil rights-oriented Asset Building Policy Network.
We'll wrap up with a word of caution: When nonprofits working on economic equity issues get in bed with corporate donors, they may be inclined to moderate their views on these issues and be less critical of private-sector actors. In this case, we're talking about a financial services industry that has famously engaged in a range of predatory or abusive practices, some of which are ongoing. It stands to reason that asset building groups may be less inclined to call out the present or future bad behavior of banks if they depend on the largesse of these institutions. Yet such groups would seem to be obvious and critical watchdogs in this space.
On other hand, the asset building crowd has never been much interested in wading into the larger battles over financial regulation or taming corporate power writ large. One of the movement's strengths is its cultivation of a practical, non-ideological brand. In that sense, its growing partnership with financial firms makes perfect sense.