Proxy power’

By Todd Cohen

DURHAM, N.C. — The Community Reinvestment Association of North Carolina has launched a series of initiatives to fight predatory lending, promote philanthropy and social activism among African Americans, and encourage philanthropic organizations to become more active shareholders.

“CRA-NC is concerned about lenders doing the right thing, and when they don’t, we go after them,” says Peter Skillern, executive director.

The Durham nonprofit, which works to build and protect community wealth, has developed a coordinated strategy consisting of regulatory and policy work, community education and empowerment, and shareholder advocacy, Skillern says.

New initiatives include the “Love Meter,” a screen the group has developed to help investors assess lenders’ corporate responsibility.

Compared to other screens that may look only at a publicly-held corporation’s ties to the military or the tobacco industry, or at its environmental impact, the new screen looks at the governance, community partnerships and profitability of financial institutions.

The screen is designed to “mobilize the power of the proxy for social change,” says Skillern.

The association, for example, applied the screen last year to Atlanta-based SunTrust and to Memphis-based National Commerce Financial, which owns Durham-based CCB.

The association concluded that $17 million in merger fees paid to seven National Commerce Financial executives “didn’t add value to shareholders and was taken out of the community” in the form of higher fees to low-income people, Skillern says.

The association also raised its concerns at shareholder meetings that approved the merger.

In a second initiative, which aims to “engage the community” most hurt by the merger and to serve as a model for other groups, Skillern says, CRA-NC is working with Nehemia Christian Church, an African-American congregation near downtown Durham.

“That’s the community who needs to be at the table, but they can’t be unless they own the shares,” he says.

With $150,000 over two years from a racial-justice collaborative funded by the Rockefeller Foundation in New York City and the Z. Smith Reynolds Foundation in Winston-Salem, CRA-NC and the Duke Law Community Enterprise Clinic have teamed up to train the church’s 100 members on financial literacy, social activism, and stock ownership and advocacy.

Andrew Foster, director of the Duke clinic, says the project aims “to create a model for lawyers and law students to work with community-based advocates to use shareholder advocacy to promote responsible corporate behavior.”

CRA-NC is working with the church to identify its shareholder-advocacy goals, he says, and the clinic provides both groups the legal services to use their shares effectively.

Durham consultant Omisade Billie Burney, who has been hired to provide the training, says another goal is to “develop the capacity of the churches as centers of philanthropy.”

A third initiative aims to help philanthropic organizations make better use of their investments as a way to advance their social mission.

Charitable foundations, for example, can be more active shareholders by making investments more in sync with their values, and by pushing the companies in which they invest to be more socially responsible, Skillern says.

“We’re hoping the philanthropic community will be more active using their shares for social change,” he says. “That’s not a donation. That’s speaking up. And the screening tool helps inform them on how they can speak up.”

Leave a Response

Your email address will not be published. All fields are required.