Putting Your Money Where Your Heart Is

How does your bank use your money after you deposit it? Most of us have no idea. But at one Vermont bank, customers know it goes to worthy projects right in their own backyard that make the local economy stronger.

At Chittenden Bank, the largest bank in the state, anyone can choose to put their deposits into a multi-million dollar Socially Responsible Banking (SRB) fund that invests in community projects in education, affordable housing, and sustainable agriculture.

The fund has offered flexible loan terms to, among many other projects, a growing cheese company, a neighborhood café, and educational programs designed to encourage sustainable local agriculture – all successful projects that might not have qualified for traditional financing or funding from a larger out-of-town bank.

The Grafton Village Cheese Company in Brattleboro, VT has used financing from the SRB Fund to expand into a new production facility and open a 2,500-square-foot store that sells wine, gourmet food, and specialty artisanal cheeses from Vermont producers. The expansion has helped the local economy by adding 35 new jobs and supports local dairy farmers, said Melissa Gulloti, a spokeswoman of the Windham Foundation, a non-profit foundation that operates Grafton Cheese.

Chittenden has also loaned funds to the Local Agricultural Community Exchange (LACE) of Barre, VT – another project that produces and promotes local food production. It operates a market and a café, plus educational programs for the community about how to prepare sustainable foods.

Although most large regional or national banks have charitable programs, it’s unusual for a bank this size to integrate social goals into everyday transactions, said Rian Fried, a member of the SRB advisory board and co-founder of Clean Yield, a portfolio management company for social investors.

Clearly, it’s an idea worth spreading. Over 12,000 bank customers have put their money where their hearts are through deposits totaling $92 million – about 10 percent of the bank’s portfolio.

At a time when the public may be losing confidence in banks due to financial mismanagement and the credit crisis, it helps Chittenden to have a program that builds public trust. “It’s a very forward thinking bank that does very well,” said Fried. “And part of the reason it does very well is the SRB fund.”

Resources

• Chittenden Bank https://www.chittenden.com/socially-responsible.html
• Grafton Village Cheese http://www.graftonvillagecheese.com/
• Local Agricultural Community Exchange http://lacevt.org/
• Clean Yield http://www.cleanyield.com/index.html