Settled in the heart of the Foggy Bottom neighborhood of downtown Washington, DC, the George Washington University is characterized by its diverse student body, robust international affairs and political science programs, and high cost of attendance. Tuition fees go towards everything from funding events on campus space to acquiring new properties, but the institution was never known for its commitment to developing low-income communities around the District.That changes, however, with 20-year-old Zach Komes’ program GW Bank on DC – a plan to funnel $250,000 of university cash holdings into community development banks around the city.
A community development bank is different from a name-brand megabank in a few ways. Both types of institutions will offer services like checking and savings accounts, debit and credit cards, loans, and mortgages. Unlike a megabank, however, a federally certified community development bank must invest 60% of their funds into low-income communities in order to maintain their distinction. This incentivizes both sustainable and profitable investments in neighborhoods with significant infrastructural needs like housing and transportation.
There are many benefits to investing in community development banks. Research indicates that an investment in a local CDB can create jobs and channel capital to low-income communities, simply because CDBs provide more opportunities to low-income families and small business owners than other banks. Keeping that investment with an institution that serves local residents and entrepreneurs ensures that money circulates within low-income communities and not away from them.
As policy director for the GWU chapter for Roosevelt Institute Campus Network, a student-run policy think tank, Komes hopes to make the university a leader in socially responsible investment decision-making. “We don’t have to sacrifice financial return for social return. Through our proposed plan, GWU can support local neighborhoods, while meeting fiscal and policy goals,” Komes says.
Green America supports GW’s decision to take an active interest in its city and invest money where it is needed most. By keeping investments local, we can continue to build a sustainable, resilient community full of small businesses, happy citizens, and bright horizons.
Supporting local communities through banking is not only for institutions, as individuals, we can also direct our money to banks and credit unions that benefit low income communities around the country. To learn more about community investing, please visit our page.