If you’ve been following corporate philanthropy at the highest levels, chances are you weren’t too surprised by JPMorgan Chase’s announcement last month that it will invest an additional $500 million toward equitable urban growth in cities. The initiative, AdvancingCities, is the latest in a series of increasingly ambitious moves by the bank to mobilize its substantial philanthropic capacity—which includes not just grants, but lending capital and technical assistance—with the goal of creating more inclusive economies in top U.S. cities. Along the way, as we’ve seen, it’s also been leading the charge toward a more sophisticated, targeted model of corporate giving.
Like so many of JPMorgan Chase’s recent philanthropic overtures, AdvancingCities leverages the bank’s role as a financial gatekeeper. Over five years, half of that $500 million will go toward grants; the rest will make up a new investment fund to support projects that lack access to traditional financing. The bank says it expects those investments to drive an additional influx of $1 billion in outside capital.
On the grantmaking side, JPMorgan Chase is currently accepting applications for the AdvancingCities Challenge, which will award up to $3 million apiece to local partnerships bridging the nonprofit, for-profit, and public sectors. The emphasis on cross-sector partnerships is crucial, and says a lot about how the bank envisages “systems change” in the context of urban economic opportunity. But we’ll get back to the challenge in a bit. First, it’s worth taking a closer look at how AdvancingCities grows out of JPMorgan Chase’s giving over the past five years, and why the bank may be rolling all of this out now.
For our deep dive last year, corporate responsibility head Peter Scher characterized JPMorgan Chase’s new and improved philanthropy as both altruistic and profit-oriented. “If more people are working, if businesses are expanding, if small businesses are being created, if people are acquiring mortgages, that’s a good thing,” he said. More than that, the bank’s leaders, including CEO Jamie Dimon, have made the case that inequality and economic exclusion are bad for business. These trends leave too many people (and potential bank clients) outside the mainstream economy, and can fuel political backlash that leads to bad policies like Brexit.
JPMorgan Chase’s new philanthropic investment strategy, tested first in Detroit and then in Chicago, Washington D.C., and elsewhere, encompasses several related areas. There’s job skills and workforce development, a mainstay of the new wave of corporate giving and the focus of the bank’s $250 million New Skills at Work initiative. Then there’s support for small businesses, particularly those run by entrepreneurs of color who may find themselves unable to secure traditional financing. Community development (particularly through CDFIs) and asset building strategies round off the list.
By targeting those areas, the bank believes that its unique assets—including an expanding branch network, legions of employees, and powerful data collection infrastructure—enable it to make a dent in entrenched urban problems. It’s in a better position than other institutions to understand where investment capital can stimulate neighborhood revitalization, and it wants to apply that capital—along with other resources—in a highly focused way. The bank is pioneering an impact investment push that private foundations could learn from.
At the same time, it’s hard to ignore the reasons that JPMorgan Chase is so flush with resources right now. Early this year, the bank announced plans to expand its giving substantially, to the tune of an additional $100 million a year. The story behind that is simple: The GOP’s business-friendly tax bill increased JPMorgan Chase’s expected earnings this year by several billion dollars. Expanded giving offsets the bad optics of the windfall—never mind that the higher deficits from a tax law that Jamie Dimon cheered on are likely to translate eventually into cuts in programs for the very communities that JPMorgan says it wants to help.
By aiming for “systems change,” JPMorgan Chase appears to ally itself with social justice funders seeking to advance equity at a structural economic level. In some ways, that perception holds true; it’s doing some real good, and is now among the most powerful philanthropic players pushing for inclusive urban economies.
Meanwhile, though, the bank often advocates for a larger political economy that favors the wealthy and corporations. Even as it’s increasingly part of the solution, it also remains part of the problem.