Speech By Connie Evans of the Women's Self-Employment Project
September 10, 2001
SRI in the Rockies Conference; Tucson, AZ

I am delighted to be here at this important Social Investment Forum Conference. I want to thank my friend, Jean Pogge, for that generous introduction, for her leadership, for her many contributions not only to our home, Chicago, but to the broader national financial and investment community as well. I want to also extend my thanks to the Social Investment Forum and the Community Investment Steering Committee, and to all of you, investors, professionals and leaders in Socially Responsible Investment from around the country.

I am deeply honored to have the privilege of addressing the social investment industry's conference, and I am very pleased to be a part of this very important Community Investment plenary and the 1 percent campaign.

I want to use my time with you to ask you a question and to give you a challenge. First, the question: How far are you willing to go to change the world? That's a nice bold, embarrassing, corny, direct question. How far are you willing to go to change the world?

We all understand what's at stake. We all share the same planet and that planet is changing in fast and frightening ways. Just look at globalization. While there is raging debate about the nature and impact of globalization, there are some essential truths about the way it is transforming life in the 21st century. Globalization brings opportunities and risks, thus creating winners and losers. There is grave concern that globalization may concentrate losses among the poorer groups and gains among the richer groups.

Another truth about globalization is that while its benefits may be unevenly distributed, its cost are borne by all.

Globalization while not a new phenomenon has unique characteristics defined by technological advances achieved in the past 25 years. The engines of globalization include the increased mobility of capital and the steadily declining costs of transportation, computing and communications.

Globalization is fueled, as well, by the dismantling of barriers to trade and investments and the belief that economic growth is the main lever to reduce poverty today.

The proposition that economic growth is key to poverty elimination and well-being has generated widespread debate in the international development community. Proponents see globalization as providing a new connectivity among economic actors and activities around the world, stimulating accelerated diffusion of technology, skills and new economic opportunities for countries and individuals alike.

The essence of the argument is as follows: Economic growth is the best way to overcome poverty. In the context of globalization, market liberalization is the best way to achieve growth. Countries that have seized the opportunity offered by more open world markets to increase export and attract investments and capital have made the greatest strides in reducing poverty. Governments could help by investing in education, healthcare and both physical and social infrastructure.

This thinking has been very influential. It has not only shaped the World Bank's loan conditions, but also International Monetary Fund's policy advice and many World Trade Organization agreements.

But globalization is only one of the headlines, shall I recite some of the others.

One in six children in the United States, 12.1 million still live in poverty. In fact, children are more likely to be poor today in this time of unprecedented wealth than they were 20 or 30 years ago. The overall poverty rate in 1999 was almost three percent higher than in 1969. Nearly 11 million children are without health insurance, 90 percent of whom have working parents. These are not acts of God; they are our moral and political choices as men and women, citizens and leaders.

A post welfare report produced by the Children's Defense Fund found that

  • More than half of a 2000-strong sample of parents seeking services, who had left welfare since 1996 did so for a job, but one-third no longer had a job;
  • Lack of childcare was the reason most often reported for not working;
  • Nearly 60 percent of those who were working had family weekly wages below the poverty line, and
  • More than half of the employed parents had been unable to pay the rent, buy food, afford medical care, or had their telephones or electric service cut off.
Further, the Economic Policy Institute released a report recently that found families need an income of at least twice the federal poverty line in order to make ends meet. The next time you are sitting in a dull meeting, instead of doodling, figure out how a family of four lives off of $16,000 a year.

Another headline, the DOW has broken 11,000 but a lot of Americans are just plain broke. They have nothing to tide them over in case of a health crisis or unemployment, much less save for college or retirement. Nearly one out of five households has zero or negative net worth. One in three African American children live in households with zero or negative net worth.

The study, Economic Apartheid in America contrasts the skyrocketing salaries of chief executives and billionaires at the top with the growing ranks of the poor, uninsured and homeless at the bottom. It says the media paints a rosy image of a country enjoying one of its most prosperous eras, far removed from the reality of many US residents. The report notes how the economic boom of the 1990s happened alongside the decline in organized labor and civic institutions, the battle over global trade and growing inequalities in income. It points out that the United States is the only industrialized nation that views health care as a privilege, not a basic human right. Some 44 million US citizens do not have health insurance and that was while the unemployment rate declined. As unemployment continues to climb so will this number.

A recent survey of leading urban historians, planners and architects for the Fannie Mae Foundation has identified "growing disparities of wealth" as the single most important influence that will shape American metropolitan areas over the next 50 years. Other studies show that everything from education to health is affected by inequality and disparities. For example, Yale sociologist Dalton Conley has shown in his new book, Being Black: Living in the Red, if test scores of black students are compared to the scores of white students with the same family wealth, the achievement gap between black and white students disappears.

Studies that have compared nations, states within the United States, and metropolitan areas within the United States have all concluded that mortality rises with inequality, affecting rich as well as poor and middle class. A report in the American Journal of Public Health concluded: "Given the mortality burden associated with inequality, business, private and public sector initiatives to reduce economic inequalities should be a high priority."

In recent years the western world has witnessed a revival of activism much of it directed at the free trade organizations and specifically at their gatherings, such as those of the WTO, the International Monetary Fund, the World Bank, the Group of 8 and the European Union. I believe we can point to the WTO protests in Seattle and this year's anti-World Bank and IMF protests as watersheds for a growing movement against the contradictions of global capitalism.

Demonstrators demanded that powerful economic actors become accountable to democratic forces, that the processes which are generating inequality and environmental degradation be stopped and that we revisit basic questions about the purpose of economic activity.

The question was raised: "Is the economy to serve the people who make it up, or is their labor for the sake of lining the pockets of the rich and powerful?"

We've heard much about the need to mange the planet, the environment. Manage the environment? As far as I can tell, the environment did fine when it was left alone. What needs managing is us—people. We have advanced at a dizzying, careening pace in our ability to manipulate matter; we have leapt forward in our ability to generate information; we have multiplied explosively our ability to exploit nature, but not our ability to manage ourselves.

Perhaps it is our destiny to live life forward and understand it backward. And today we are living on fast forward.

Let's review some facts about our fast forward period of history.

Our world population growth is still increasing. Global carbon emissions are also on the rise.

We have been riding a rocket called straight line growth. In the biological world, let's remember, unchecked growth is usually pathology—cancer. But in the economic world, at least up until now, unchecked growth is considered health, wealth and truth. During the 1990s, it was Ivan Boesky, I believed who said, "growth is good". I think we have come to re-understand health and wealth.

Our task, yours and mine, is to bend the lines of these facts. We have to bend the population curve downward. One way is to do nothing and pretend that famine, disease and war do it for us. It won't of course. The other way is to assist communities in improving health and living standards without injuring the environment.

We have to bend the lines on global carbon emissions. The one and only way to do that is to reach multilateral accord on how much carbon dioxide we will emit into the atmosphere.

We have to reverse the direction of the flow of goods and capital. Bend the lines by converting to economic arrangements that close the widening gap between rich and poor, North and South, and do it on a global scale.

It is important to remember that there isn't just up and down in these imaginary lines. There's equity and inequity in these lines. There's survival or disaster. There's breathing room or the big squeeze.

Shall we be inpatient? Absolutely. We had better be. We have to begin to change things right now. We can begin today.

We can start to do it precisely because, paradoxically, because, we are not representative of the world's 6 billion people. Everyone in this room today is fortunate to a degree unimaginable to the people outside our small circle. We are not the commoners of the world.

We are fortunate in our education, or economic self-sufficiency, our physical ease. We have bigger bank accounts, more frequent flier miles, more and better vacations than most people. Our hands speak of our privilege. They are smooth and clean. The rest of the world's hands are soiled, bent, scarred, swollen, missing a finger or two.

But our greatest good fortune is our ability to choose. We are Masters of Choice. Listen to the words we use: options, trade-offs, scenarios, strategies, social venture. Listen to the words the rest of the world still uses: hunger, sickness, sacrifice, communal strife, debt—fate.

Where do we begin?

We begin with the concrete. I heard Peter Goldmark, former President of the Rockefeller Foundation tell a story once about becoming concrete to address global problems. It went something like this. Conrad Hilton, who built the hotel empire, was on the Johnny Carson show one night. Johnny Carson said, "Mr. Hilton, all America is watching. This is your chance to tell them the secret of putting together a great hotel chain." Conrad Hilton leaned into the camera—Peter says you could hear all of America leaning toward their sets… Mr. Hilton said: "Put the shower curtain inside the bathtub." That's simple but concrete.

To make change, we have to focus on the concrete.

Gandhi asked us to adopt this simple rule as a guide to our action. He said: Think about the face of the poorest and the weakest man whom you may have seen and ask yourself if the step you contemplate is going to be of any use to him. Will he gain anything by it? Will it restore him to a control over his own life and destiny?

Those of us in this room today are uniquely positioned to answer that question in the affirmative. If we are inclined to do so. As professionals who educate, inform and manage the $2 trillion plus of socially responsible invested assets, you can help your clients make a big difference with their money. As investors in the room, no longer satisfied with just having your portfolios socially screened, you can maximize the impact of your dollars. You can do it by embracing the One Percent Campaign. It is a strategy that calls on all investors to allocate at least one percent of their portfolios to community investments. It is simple. It is concrete. It is action.

Community investing can play a key role in reversing the trends I mentioned earlier, both nationally and internationally, in helping poor communities create greater economic prosperity and allowing low-income communities and their residents to gain greater control over their economic situation and lives. As you have heard, such a move to invest one percent of socially responsible invested assets will effectively triple the real dollars available to finance work in under-invested communities and with lower-income families. It will create a permanent tier of capital to serve underserved communities.

Let's be clear on what we are talking about here. We are talking about shifting money. Shifting money. Shifting money. We all know that socially responsible investing represents the cutting edge of the investment industry. But it too has convention. We are now talking about shifting money from the conventional socially responsible investments to investments that reach down to low-income communities and change the lives of the individuals who reside there.

We rallied, we cheered, we celebrated the great triumphs of the investment industry when its socially responsible screens led to issues like apartheid. But that was only "a" or part one. There must be a complimentary "b" or part two. Part two or "b" is community investing. Community investing is an integral part of socially responsible investment. A socially responsible investment without an allocation to community investing is simply shortsighted.

Let me illustrate. I just returned from South Africa. Literally, I got off a plane on Saturday and back on a plane last night to join you today. It was my fourth time in South Africa, with my first visit occurring in 1990 during apartheid.

Back then my loose-leaf visa classified me as white in order for me to move around the country freely with my white colleagues from the Mott Foundation during that foundation-sponsored mission. Yes, I am very happy that the legal system of apartheid is over and gone.

But my heart ached as much on this trip as it did on the first. First, I had to listen to white South Africans tell me how much better off everyone was under apartheid. My favorites were the taxi drivers. Once they found out I was there for the World Conference Against Racism, they would launch into a spiel on how absurd it was to talk about racism. How South Africa was better off under apartheid; the hospitals, schools, employment… you name it… life for all, especially the blacks was better under apartheid.

But that didn't bring the heartache. I expected such attitudes. My heart ached when black South Africans told me the same thing. Of course, not all blacks believe such, but do you realize how desperate their lives must be in order for them to say such a thing. The fact of the matter is poverty has increased in South Africa over the past few years. There was a transfer of government power, but not a transfer of wealth. There has been no redistribution of wealth.

And as the country moves swiftly to privatize its industries, employee wages, benefits and their very livelihoods are feeling threatened resulting in long labor strikes and unrest.

Again, the social investment screens on issues of apartheid were fine, but incomplete. We need to shift money. We need to raise the investment dollars so communities and their people can use capital to create jobs and start enterprises.

I quote Norm Chomsky, "Freedom without opportunity is a devil's gift, and the refusal to provide such opportunities is criminal."

I ask you to go back to the video and the borrowers in South Africa. They were able to create jobs and opportunities for individuals in their communities with a loan from what we would call a community development financial institution. There are tens of stories like that in South Africa, their needs to be tens of thousands.

We certainly do not have to travel half way across the world to find the devil's gift, that is, freedom without opportunity. It is right here in our back yards, in our own small towns, in our rural towns and communities and major urban centers.

I have been pleased that community investing has made it possible for me to place new economic opportunities for low-income individuals and communities on the front burner. As one of the oldest and largest microenterprise development organizations serving low-income women, the Women's Self-Employment Project has harnessed the power of community investing.

Since its inception in 1986, while pioneering micro credit in the United States, WSEP has successfully supported the efforts of low-income women to increase their economic self-sufficiency, leave welfare, create new options for their families, demonstrate credit worthiness and launch their own businesses. With the mission to increase the economic self-sufficiency of low-and moderate-income women through self-employment and asset development, WSEP developed one of the first matched savings programs in the country and pioneered Individual Development Accounts, one of the most innovative asset building tools created.

Serving about 1,000 customers each year, WSEP has distributed millions of dollars for business start-up and development, facilitated the creation and retention of nearly 2,000 jobs, created nearly 1,000 savers, and facilitated policy changes in Illinois governing welfare recipient's access to assets and self-employment opportunities.

Microenterprise programs are among the most studied of development strategies in the United States. The Self-Employment Learning Project (SELP) of the Aspen Institute conducted a multi-year study of seven leading microenterprise organizations. WSEP's borrowers represented the largest sample of the 405 individuals tracked. Just listen to what low-income women are able to accomplish when given the opportunity, given the capital.

  • 72% reported increases in household assets, 23% reported $10,000 or more increase
  • 62% reported increases in household net worth, 35% reported $10,000 or more increase
  • 47% had an increase in business assets
  • 34% reported an increase in business net worth
Those were all asset-building results, when we look at straight building results, we find that 79% of the businesses were still in operation at the fifth year; 59% reported increases in net earnings; 41% increased profits between years one and three. And 30 percent of the businesses created at least one paid additional job.

The WSEP microenterprise loan fund relies, in part, on loans and investments from individuals and institutions who are looking to see their money contribute to the economic lives of people who support their families and strengthen their communities and build our country into the kind of nation we want in this new century. Indeed, it is now a commonplace observance that often the greatest contributions, economic contributions, in our communities come from the smallest businesses in the aggregate. They literally can transform communities, offering a path to success for women and others who would otherwise not have had it.

If we can spread the opportunity for microenterprise, for making that first beginning across the country, we can offer a new path to success for people who today are left out of the economic mainstream. In rural America it may be a person who once worked on a family farm. In urban areas it may be a parent who can't juggle an office or plant job with a family, or who's been left out of the workforce for childbearing, or who is struggling to move from welfare to work. It might be older individuals who are retired from their previous jobs. It might be people with disabilities who aren't mobile, but who have a skill, an idea, a capacity to contribute. It might be laid-off workers looking for a second chance.

There are huge numbers of people in our country, as all of you know, who are literally brimming with initiative and desire who are willing to be responsible and work hard. Microenterprise helps to put such people on their feet and gives people with courage and genius a chance to reach for the stars. To do that, they must have opportunity.

Micro credit is a great entry ramp to the development finance community. One of our borrowers, Shelia, was never able to qualify for a bank loan to finance her beauty supply store for lack of good credit and collateral. After paying back a series of progressingly larger loans to WSEP, she eventually moved up to secure a much larger loan from a community development bank, the South Shore Bank in Chicago. Benita is another WSEP customer who used self-employment to leave welfare more than six years ago. She borrowed $1500 to start a childcare business.

Her second WSEP loan allowed her to move the childcare business from a day care home to a facility. Benita enrolled in the first IDA program offered in 1995 by WSEP and used her asset account for home ownership. Last year, Benita used her house for collateral to purchase another building for her second childcare facility. Benita is using micro loan funds, community development banks and community development loan funds to build a better future for not only herself and her family, but indeed for the greater Chicago community.

Here lies the beauty of the community investment field. It offers not only an entry ramp, which indeed is important for low-income individuals, but a whole growing highway of financing options that deliver small businesses, jobs, affordable housing and community facilities.

These community investing opportunities run the full risk/return spectrum, from insured depository institutions like community development banks and community development credit unions to uninsured high impact community development loan funds, and micro enterprise funds, to community development venture capital.

It is a field that includes international funds, national funds and local funds. It is a field that includes $1million institutions and $1 billion institutions. Regardless of the size and nature of the community development financial institution, they have the following characteristics in common:

First, they all serve as an efficient intermediary for investor capital, connecting low- income people and communities to the mainstream economy. These institutions in the community investment field are committed to spending the time, energy, and care necessary to structure responsible financing options that match the local needs of the communities.

Second, community development financial institutions are innovators, R&D laboratories dedicated to the democratization of credit. Not only do the institutions in the community investment field devise sound programs, but programs that will strengthen both their bottom lines and the communities they serve.

These institutions continue to develop and provide loans and other financial services to under-served neighborhoods that bankers have not yet figured out how to serve.

The third characteristic is the timeless power of a vision. Community Investment institutions have created low-risk ways of extending credit to tiny businesses owned by individuals who were not previously served at all by the financial system. They are proving before our eyes that credit can be extended well beyond what our current skeptics deem feasible.

Make no mistake, community investment is real business. Of a total of $2.16 trillion of assets under the management of socially responsible investments, 5.4 billion represent community investment dollars.

In exchange for accepting a more modest return than some conventional investments, investors are able to make a clear and direct impact on the lives of economically disadvantaged people. Investors do not need to direct a large portion of their individual portfolios to realize this impact.

If just one percent of the total mange assets involved in socially responsible investments were targeted to community investing, it would triple the total dollars directed towards low-income communities, an increase from $5 billion to $15 billion. The impact of those dollars, in terms of lives changed and communities revitalized would be unprecedented.

Most of you know the story of the Grameen Bank. You know about how Professor Muhammad Yunus, an economist in Bangladesh began handing out loans to the landless, people at the bottom of society, the poorest of the poor. How he loan money without taking traditional forms of collateral. How he made loans to the women of Bangladesh. You may also know how the Grameen Bank has grown. The last figures I have are that they have disbursed more than $3.3 billion cumulatively to 2.3 million members. Its default rate is still about 2 percent. Do the numbers tell the whole story? Not quite.

I have been in Bangladesh now with the Grameen Bank on about five different occasions. I still say that the numbers only tell part of the story. When you are there, you see that what it really is, is subversion.

Here's what being subverted:

The belief that poor people are helpless people.

The belief that women are the most helpless of all.

The belief that poor landless people are terrible credit risks.

The belief that poor people cannot cooperate, cannot plan ahead, cannot decide for themselves, cannot manage or service a loan.

The belief that the best form of economic development is aid for massive, centralized projects undertaken by the state.

The belief that you build the economy by destroying the earth.

The Grameen Bank is not built on transactions. It is based on commitment. It deals in something more than contracts. It builds on a compact. And business sense.

It is the only bank in the world with its own birth control policy. Its members make this pledge: We shall plan to keep out families small.

It is the only bank in the world with its own marriage policy. Its members make this pledge: We shall keep the center free from the curse of dowry. We shall not practice child marriage.

It is the only bank in the world with its own sanitation policy. Its members make this pledge: We shall build and use pit-latrines.

Do you begin to see how much can be accomplished if we choose to look at the world in different ways and organized according to new principles?

Now some of you may be asking yourself, how can she stand there and ask me to urge my clients, assist my clients move an allocation of their assets to community investing when they're worried about this downturn in the markets; they are worried about their returns which they see dwindling.

Well, let's talk about returns. First, the gap isn't what it used to be. The news is full this morning about Lucent stock. If your clients have Lucent and a lot of others just like them, they would be glad to have you talk about their returns through community investing. You can talk to them about the leveraged value of financial and social capital.

You remember that $15 billion that you raised when you moved the 1 percent of the socially responsible assets to community investing. The return could be 4 million jobs. And that is just using a simple micro loan. I told you, the video told you that a business can be started with a $5,000 loan. That creates one job. You now have created 3 million jobs.

If you just take our experience and assume that 30 percent of those businesses create at least one additional job, that is another 900,000 jobs for a total of 3.9 or nearly 4 million jobs.

I just did the calculations on returns based on jobs and micro loans; you can do the same with the number of new affordable housing units, the number of day care added to communities. And you still earn the financial return that you expected. As the newspapers now debate whether its time for investors to throw in the towel. We can offer people hope. We can offer people job creation instead of thousands of jobs loss.

I started by asking: How far are you willing to go to change the world. Well, are you willing to be subversive? Are you willing to shift the money? How far are you willing to go to change the world?

If by chance I have not convinced you that risk and returns are not real barriers, there are many people in the audience who can assure you of such based on their own portfolios.

If I have not yet convinced you that the opportunity for maximizing impact on the lives of human beings and restoring dignity to poor individuals is more valuable than any commission fee you will ever receive, come to Chicago. We are fortunate to have at least one institution of each type of community development financial institution. Talk to our customers, talk to our investors.

If I have not yet convinced you that we have great innovators in the community investment field that will eventually create new technology to further automate and make more efficient the community investing process, then all I can say is to remember words of Einstein that say, " Our technology has surpassed our humanity." Don't let that be said about the state of socially responsible investing.

How far are you willing to go to change the world? Are you willing to go half way around the world? To South Africa? To Bangladesh where the Grameen Bank is? To the other side of the urban city?

So here's my challenge to you:

I want to challenge you to step into a new world organized with new principles and create where it can make the biggest difference, where it will affect the world your children, your neighbor's children live in the most - $15 billion of social change.

What will it take to do that? One percent. Just one percent of actively managed social investment dollars into community investing by the year 2005. One percent of your client's portfolio. One percent of your institution's portfolio. One percent of your investment portfolio.

We have the power to do this. Each person in this room has the power to organize within this new principle. The community investment dollars are worth a lot more than they are in the conventional socially responsible portfolio. Why not use them where they can be most powerful. What is that power for if you don't use it? Remember, its not either or. It's part B. Let's not stop prematurely.

"Freedom without opportunity is a devil's gift, and the refusal to provide such opportunities is criminal.

Can we use the talent and vision and leadership in this room to change the world? Can we begin today?

In Bangladesh, each member of the Grameen Bank makes this pledge: During the planting seasons, we shall plant as many seedlings as possible."

Can you and I do less?

Let me close with the words of one of my favorite philosophers, Mr. Eric Clapton:

"If we could change the world, we could be the sunlight in their universe;
We could turn our love into something good,
People if we could - change the world
People if we could - change the world
People if we could - change the world.

Now, I need you to join me: People, if we could: I will change the world, People, if we could, I would change the world. People if we could, I will change the world.

Thank you.

For Comments, send to:

Connie Evans, President
WSEP Ventures Inc.
11 South LaSalle Street, Suite 1850
Chicago, IL 60603
Phone: (312) 606-8255
Email: [email protected]

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