Mission Principles
and Policies
As a bank, lending is the primary way we make the change we want to see. Our depositors provide the funding to make loans possible, we make the loans, and our borrowers create impact in the world. We continually work on our principles and policies and we examine each loan for potential positive and negative impact in order to execute on Beneficial State’s Mission and Vision. Learn more below about the principles and policies that guide us in everything that we do.
What We Finance
75%+ Mission-Alignment
To steward depositors’ money well, we strive to ensure that 75% or more of our loan dollars are supporting a more socially-just and environmentally-sustainable world, and that none of our loans are counter to this mission. Our primary target for all lending is mission-aligned businesses and organizations.
We’ve identified 4 primary ways in which nonprofits and businesses can be considered mission-aligned and count toward our 75% goal:
1
Ownership by Under-Served Communities
Businesses and nonprofits that are owned or led by people from under-served and historically oppressed groups that can help build…
Businesses and nonprofits that are owned or led by people from under-served and historically oppressed groups that can help build wealth and power for these individuals and communities.
• People of Color | • Formerly Incarcerated |
• Disabled | • LGBTQ and/or Gender Non-Conforming |
• Immigrants and/or Refugees | • Veteran |
• Rural Residents/Community | • Religiously Persecuted |
• Native American Populations | • Other Underserved Population |
2
Mission-Driven Ownership Structures
Nonprofit organizations, worker-owned cooperatives, benefit corporations, social purpose corporations, and similar business models that put people and planet before profit.
Nonprofit organizations, worker-owned cooperatives, benefit corporations, social purpose corporations, and similar business models that put people and planet before profit.
• Worker-owned Cooperative | • Social Purpose Corporation |
• L3C (Low-profit LLC) | • Public/Government Entity |
• Benefit Corporation (different than B Corp, which is a certification, not a business structure) | • Tribal or Village Government Entity |
3
Mission-Driven Core Products & Services
Nonprofits and businesses whose core products or services are intended to improve the lives of people and communities and/or support…
Nonprofits and businesses whose core products or services are intended to improve the lives of people and communities and/or support environmental sustainability. We’ve articulated several key mission product and service sectors. See the table for detailed definition of each.
1. Affordable & Multifamily Housing | 6. Beneficial Financial Services |
2. Arts, Culture & Community-Building | 7. Health & Wellbeing (Non-Food) |
3. Economic/Workforce/ Business Development | 8. Healthy Food |
4. Education & Youth Development | 9. Making/Manufacturing/ Production |
5. Environmental Sustainability | 10. Social Justice |
4
Mission-Driven Corporate Practices
Borrowers that purposefully support people and planet through their corporate practices, such as the provision of living wages and benefits…
Borrowers that purposefully support people and planet through their corporate practices, such as the provision of living wages and benefits well-being opportunities for staff, sustainability practices and policies, and community service programs. These practices are often recognized through certifications and labels such as B Corp, Green Business, JUST, LEED, and others.
Certifications / Labels
B Corp Certified | CDFI | Green Certified | JUST label |
PROCUREMENT: Written & Executed on a Commitment to Purchase From
Locally-Owned Business/Local Farms | Small Business/Small firms |
Minority/Underserved-Owned business | Fair Trade/Fair Labor/Sweatshop Free |
Organic Products |
EMPLOYEES: Explicitly & Proactively Hires People w/ Barriers
Minority People of Color | Disabled |
Formerly Incarcerated | Low-moderate income/education |
Immigrants | Veteran |
Rural Community Residents |
EMPLOYEE WAGES / BENEFITS/ OWNERSHIP
All Jobs Living Wage or Above | Health Benefits Exceed Gov Req. |
Pays Min of 60% of health insurance | Provides paid apprenticeship/training |
Offers Employee ESOP | Some or all of workers are unionized |
HELPING UNDERSERVED: Special products, services, pricing
Disabled | Immigrants |
Formerly Incarcerated | Veteran |
Low-moderate income/education | Rural Community Residents |
Minority People of Color |
Commitment & Execution to Support Low- and Moderate- Income (LMI) Residents
Regular volunteering for organizations, schools, or projects in LMI neighborhood |
Regular donations of dollars or in-kind products or services to LMI neighborhood |
Regular participation in or advocacy for local policy initiatives that benefit the LMI neighborhood |
Consistently provides products, services, or pricing that specifically meets the needs of LMI residents |
Do No Harm
We believe banks must be as equally committed to avoiding harm as they are to benefiting communities. It’s not enough to do good; we must also do our best to avoid the bad. As such, none of our lending or deposits may be used to support contra mission sectors, activities, or business transactions as listed below. More detailed descriptions of each of these areas and our overall approach to Do No Harm is in our Mission Principles Guide.
Additional contra mission categories are being discussed and developed on an ongoing basis.
How We Lend
Resolving Complex Issues - Doing No Harm, and Encouraging Transition
When a business or transaction has both mission and contra-mission elements, Beneficial State will not lend to an entity with contra-mission elements unless the loan is used to explicitly migrate a borrower toward fully mission-aligned practices and products.
Community Supported Businesses and Projects
We strive to ensure that our lending is to activities and businesses that are supported by and have a voice from the communities in which they operate, particularly low-income and underserved communities.
Additionality
We seek to go “the extra mile,” taking the time to understand more complex mission loan opportunities, with the goal of providing loans to help businesses, nonprofits, and individuals that would not get financing from other banks, or would not get similar benefits/terms from other banks. With this principle, we articulate our value and reason for being in the world; without us, these businesses and nonprofits would not be able to achieve their missions as easily, as much, or possibly, at all.
Products and Pricing Principles: Designed for Impact
We design our products to help people minimize their costs and maximize their savings. We strive for people and organizations to be healthier the day after they took up a product of ours than the day before, and on into the future. Imbedded in our approach are these guiding principles.
Legal and Ethical
It goes without saying that we are committed to meeting and exceeding legal and ethical pricing and product standards. As a result, we do not intend to receive fines and do not include fines as an assumed cost in our business model — no fines as a mere cost of doing business.
Pricing
Pricing that is fair, transparent, and reasonable:
- Fair: We provide fair pricing to everyone. We don’t price equally, but we do price equitably, for value given and derived. We apply no pricing schemes, practices or business models, such as repetitive overdraft fees or maximization of overdraft fees by processing checks largest to smallest, that make money from those with the least money, wealth, or financial stability, while charging lower than market or zero fees for products that serve higher income needs.
- Transparent: We share our prices in a clear and meaningful way so that everyone understands what they are paying for and can therefore choose accordingly. We will not purposely obscure fees or make fees confusing to encourage customers to make more expensive choices and increase our profits. We avoid complex cross-product pricing schemes in which some items are free and other items are overpriced to make up for the losses like “free checking” schemes.
- Reasonable: Our pricing covers our actual costs and allows us to pay a minimum of 1.5 times the area’s Living Wage to our employees, a maximum highest to lowest paid ratio of 10:1 as well as provide market and/or living wage prices to our suppliers and service providers, and a modest return on investment for capital providers to the bank. We charge what we must for economic viability (our measure of financial sustainability is 6-9% return on equity — not more!) not what we can for capital market dominance. Otherwise, we are likely gouging. We use technology and green practices to minimize our costs, then pass those cost savings to our clients too.
Provide Alternatives to High-Cost Products
Develop products that help people save money and/or get out of debt. Many high-priced banking products are ripe for disruption.
Employing the Compass Principles
We commit to ensuring that our products and pricing also adhere to the Compass Principles developed by the Financial Health Network.
Mergers and Acquisition Principles
We also have mission principles to guide us in any merger or acquisition decisions. Any merger or acquisition by Beneficial State must have the following mission characteristics.
- Mission-aligned banks that would enhance our ability to achieve our social and environmental mission
- Voluntary on both sides
- Increases opportunities for our staff