STUDY: AMERICANS BANKING ON MORE AFFORDABLE CHILDCARE AS "COMMUNITY INVESTING" RESOURCES NEARLY TRIPLE
Growing Childcare Crisis Sees Parents, Others Switch Where They Bank, Invest; "Community Investing" Financial Institutions Put Greater Emphasis on Childcare.
WASHINGTON, D.C.///JUNE 5, 2002///As quality childcare that is affordable becomes increasingly difficult for American families to find, more and more parents, grandparents and other investors are "voting with their dollars" by moving their checking, saving and investment accounts from traditional financial institutions to "community investing" banks, credits unions and investment programs with a major emphasis on creating more childcare opportunities, according to a new study from the Social Investment Forum (SIF) Foundation and Coop America, both of which are nonprofit organizations. The report, "Community Investing in Action: Childcare," finds that childcare financing by community investing institutions surged by 191 percent from 1998-1999 to 2000-2001.
"Through community investing, parents, grandparents and other concerned individuals and organizations are directly supporting the creation of childcare facilities, jobs, and slots for toddlers in the very communities that need these services the most," said Deborah Momsen-Hudson, vice president of Self-Help Credit Union, Durham, N.C. "Many of the options that people can exercise to directly support the wider availability of affordable childcare are as simple as opening a checking or savings account at a community development bank or community development credit union."
"Many traditional financial institutions do not understand the childcare market and are leery of providing financing to new facilities precisely where funding is most needed in struggling middle- and low-income communities," explained Shari Berenbach, executive director of the Calvert Foundation. "This is the gap that community investing financial institutions fill today. Individuals who want to be part of the solution need to know that where they bank and invest can make a direct contribution to easing the childcare crisis in America. In addition to community investing credit unions and banks, individuals also can support childcare through certain mutual funds and pooled investment programs."
The new report's data is consistent with SIF Foundation data published in 2001 showing that overall assets going into community investing grew by 41 percent between 1999 and 2001. Assets held and invested by over five hundred community investing institutions in the United States totaled $7.6 billion in 2001, up from $5.4 billion in 1999. Community investing is financing that generates resources and opportunities, such as childcare, for economically disadvantaged people in urban and rural communities in the U.S. and abroad that are underserved by traditional financial institutions.
KEY FINDINGS FROM REPORT
There is growing crisis today in American childcare today, according to the SIF Foundation/Coop America report. Nationwide, 14 million children under the age of six - including six million infants - are in some type of childcare arrangement every day. In 75 percent of two-parent families, both parents work. Particularly in low-income communities, parents are finding that two incomes are needed to make ends meet. In particular, it is becoming increasingly difficult for parents to find childcare that is both of high quality and affordable. Full-day quality childcare can cost $4,000-$10,000 per year - as much as college tuition at a typical public university.
In order to gauge the impact that community investing is making on the American childcare crisis, the Social Investment Forum Foundation/Coop America conducted a survey in May 2002 of 15 representative Social Investment Forum institutional members that take part in childcare financing. The organizations encompassed by the SIF Foundation/Coop America survey included the major credit unions involved in childcare financing as well as a number of smaller organizations. The survey of this cross-section revealed the following:
COMMUNITY INVESTING IN ACTION
At the heart of community investing are the lending institutions that best know the communities to which they lend. Community investing institutions take the time to learn the needs of a community and work closely with their borrowers, often providing technical assistance. Through this careful research and relationship building, community investing institutions are able to provide loans to entrepreneurs in low-income communities that traditional lenders often overlook, and are able to do so in a manner that benefits the borrower, the community, and their investors. Consider the following examples of community investing solutions to the American childcare crisis:
HOW CONCERNED INDIVIDUALS CAN GET INVOLVED
Community investing institutions use consumer deposits and investments to provide financing to communities that are overlooked by traditional lenders, creating resources and opportunities for people who need them most. In addition to checking and savings accounts, CDs and IRAs can be provided through a community development bank or credit union. It is easiest to look locally for a community development bank or credit union. If such an organization is not nearby, it is easy to bank at a community development bank or credit union in another neighborhood or state using ATMs, mail, and online banking. A partial list of SIF Foundation institutional members that carry out childcare financing includes:
For a fuller list of Social Investment Forum member organizations that engage in childcare financing go to http://www.communityinvest.org/childcarelist.htm. A listing covering all types of community investing alternatives can be found online at http://www.communityinvesting.org/search.htm.
ABOUT THE SIF FOUNDATION/CO-OP AMERICA
The Social Investment Forum Foundation is a national nonprofit organization providing information and educational programs on socially responsible investing. It provides cutting edge research on the trends, practices, performance, and impact of social investing. The Forum also provides information and resources for investors interested in community investing, shareholder advocacy, and portfolio screening for social and environmental impact.
Co-op America is a national nonprofit consumer, business and investor education resource that helps people use their money to promote social justice and environmental sustainability. Co-op America harnesses the power of consumers and investors through marketplace strategies to address some of today's most pressing social issues such as sweatshop labor, deforestation, and other threats to the health and well-being of people, communities, and the planet.
The Community Investing Program began in 2000 as a joint venture between the Social investment Forum Foundation and Co-op America, The five-year goal of the Community Investing Program is to encourage all investors to direct at least 1 percent of their assets to community investing, tripling the assets available to create new jobs, homes and vital social services in communities that need it most.
Funding for the Social Investment Forum Foundation/Coop America report was provided by the Packard Foundation, the MacArthur Foundation and the F.B. Heron Foundation.
CONTACT: Stephanie Kendall, 703/276-3254 or [email protected]
EDITOR'S NOTE: A streaming audio replay of the news event at which the community investing/childcare study was released will be available as of 6 p.m. EDT on June 5, 2002 at http://www.hastingsgroup.com/childcare_solutions.html.
TO LEARN MORE ABOUT COMMUNITY INVESTING,