Wednesday, February 11, 2026

Beneficial State Bank is Transforming Banking

By
Gino Baltazar, MS Finance
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Traditional banking is changing, from one driven by risk and return, to one driven by risk, financial return and social impact.  And leading the charge is Beneficial State Bank, based in Oakland, California.

Beneficial State Bank’s Model

The bank is as unique as the outlook of one its founders, Kat Taylor, who started the bank in 2007, right before the Great Recession.  Unlike big banks, Beneficial State Bank is certified as a B-corp, an emerging industry measurement and certification for impacting for-profit enterprises.  It is also structured as an economic enterprise whose rights are owned and held by Beneficial Foundation, a non-profit.

And 75% of its loan portfolio is aimed towards what its founder calls change-makers: entrepreneurs and enterprises who are servicing affordable housing, renewable energy, sustainable food, or are minorities, women or come from low-income communities.  The bank prides itself with disclosing who and how it invests its loans transparently, as well as the how its portfolios are impacting communities.

 

Kat Taylor, and her husband Tom Steyer, already billionaires when they founded Beneficial State Bank in 2007, also focus their time and energy on climate change and food systems. Instead of donating grants and money as other foundations do, they are creating businesses to influence industry disruption in uniquely impactful ways.

Knowledge@Wharton’s Katherine Klein did a terrific interview of Kat Taylor in December, as did Conscious Company Magazine over the summer in July.

Sources: Knowledge@Wharton, Conscious Capital Magazine

Scholly is Transforming the Hunt for Scholarships

By
Gino Baltazar, MS Finance
-

Scholly’s Christopher Gray has been an impact investing success story.

Scholly has raised $200,000 from Rise of the Rest and from a local startup fund in Philadelphia. The app, he says, now serves over 600,000 students and has raised over $20 million in scholarships.

Scholly’s Humble Background

The son of a single mother in Birmingham, AL., who struggled to make ends meet, Mr. Gray remembered his experiences of needing substantial financial aid and the laborious research and work to land the $1.3 million in scholarship money to attend studies at Drexel University in Philadelphia.

He says it was those experiences that helped him decide to start Scholly.

Next Steps

He plans to make an Android version of the app and make the apps available to 300,000 young people as part of President Obama’s My Brother’s Keeper Alliance.

***

Scholly’s success, Mr. Gray says, is based on its patent-pending algorithm and “a lot of elbow grease.” Scholly employs eight parameters to match student and scholarship: information including gender, state and race, but also more customized data because so many grants are specialized. “For returning students, vegetarians, left-handed students,” he quips.

Even the algorithm, he says, cannot distinguish scams: Staffers weed out scholarships that could be yours if only you supply a Social Security number. Graduate students—the “Scholly Squad”—do the sifting. “They’re the quality assurance people.” 

Karen Starks, on the faculty at the School of Social Work at the University of Alabama—who mentored Gray during high school—also volunteers at South Gwinnett High School in Georgia. Out of her own pocket, she recently purchased the Scholly app for all 600 seniors in the school.

When she observed students logging in to the app for the first time, she says, “You should have seen their faces when they started seeing that they qualified for 20, 30, 40 scholarships—some students got over 150 hits right off.”

Scholly, she says, is “changing what students think that they can achieve. They have proof that says: There may be help out there; I can reach that goal.”

Sources: Smithsonian, Scholly

Globalization and Automation Demand More Inclusive Policies

By
Gino Baltazar, MS Finance
-

While many have benefited from humanity’s overall progress via and trade including, significantly, global reduction of poverty, its ill-effects in the past half-century have increasingly been causing widespread social unrest, economic dislocation, wealth inequality and, for some political leaders, disrupted careers.

Prescriptions being recommended include more inclusive community policies like job retraining, UBI or universal basic income, wealth redistribution through sensible tax and tariffs on corporations across state, national or geographical borders, and effective impacting investments at local and city levels.

History Urges the Long View

History has shown that these types of policy prescriptions cannot be delayed much longer.  The Industrial Revolution in the 19th century shifted the lives of millions of people, urbanizing, and dismantling feudal societies, to such a degree that dislocation and poverty occurred among the working classes.

Increasing modernization was accompanied by increasing populist revolts and the rise of new socialist ideas, like Marxism, which without question contributed in turn to the rise of nationalist movements in Germany and in Russia.

One might see the parallels occurring today with the rise of globalization and automation, contributed to by digital, mobile and innovations in information technologies.  Millions of people have been as dislocated as generations of families that were sustained by manufacturing and industrialization eras no longer had gainful employment.

To note that this trend is now accompanied by, again populism, anti-immigration, nationalistic movements culminating in the rise of Alt-Right, Brexit and Trump’s election in the US is not an exaggeration.  Yet these changes are not reverting; in fact, they are accelerating with the rise of artificial intelligence, and robotics.  Thousands more people are projected to lose their livelihoods. (WEF)

“The loss of US service jobs to international competition and technology is accelerating, even though at one time the vast majority of these jobs were thought to be relatively safe from globalization.” (HBS)

Human progress must move forward.  But governments who continue to ignore warning signs, or corporations like Apple who continue to park millions overseas to avoid taxes, are doomed to suffer the consequences of “wholesale retrenchment.” (Danny Leipziger GWU, Voxeu)

We need more forward-thinking ideas like those that Tesla’s Elon Musk has been promoting and talking about as more technology enablers like Artificial Intelligence advance innovations.  And we need bolder leaders, both in the public and private hemispheres, to advance these best ideas forward.

***

With globalisation, we have seen the traditional barriers to trade and finance progressively lowered, and in this process, many have gained. Indeed, globalisation has been responsible for large increases in world trade, fluid flows of capital seeking higher returns, imports of final products at lower cost to consumers, jobs and escapes out of poverty for hundreds of millions, and profits for the business community in both advanced and emerging market economies. In this clamour for greater connectivity, issues of the distribution of the gains from globalisation were largely ignored, except in the work of some, like Joseph Stiglitz, largely because gains were large and benefitted many on both sides of the transaction.

Yet, the benefits incurred costs as well. Although it is difficult to do a thorough net cost-benefit analysis of globalisation, it clearly enabled many in the developing world to increase their incomes, and many in the advanced economies to consume more at lower prices. Accompanying the process of globalisation was a process of technological advancement. New technology has enabled many to increase access to seemingly free information and to connect to the new and expanding global digital economy, while for others it has meant job losses and retrenchment. While the net gains still prevail from both phenomena, the process for compensating losers has been inadequate, and in some contexts largely foregone. (Voxeu)

Sources: Danny Leipziger@Voxeu, Matt Turner, James Heskett@HBS

Bangladesh Attracts $1B in Impact Investments

By
Gino Baltazar, MS Finance
-

At the inaugural “Impact Investment in Bangladesh Summit” in November, it was announced that impact investing in the Bangladesh has attracted $1 billion and is maturing, with investors looking for better ways and tools to measure impact.

Significance

According to the Financial Express Bangladesh, the country has the third most active impact investing market in South Asia after India and Pakistan.

One result, according to the country’s Finance Minister Muhith, “poverty rate drastically fell to just 22 percent in 40 years from 75 percent.”

Deployment through DFIs

The primary artery of impact investing has been through Development Finance Institutions (DFIs) which have contributed over $834 million while other impact investors have invested $121 million.

DFIs are specialized development banks or subsidiaries set up to support private sector development in developing countries like Bangladesh. They are usually majority-owned by national governments and source their capital from national or international development funds or benefit from government guarantees. This ensures their creditworthiness, which enables them to raise large amounts of money on international capital markets and provide financing on very competitive terms.

Most of the impact investments in the country are being deployed via DFIs to sectors such as information and communication technologies, energy, financial services, agricultural/food processing, infrastructure, micro-finance and manufacturing.

ClearlySo Atlas Impact Measurement Tool Announced

By
Gino Baltazar, MS Finance
-

European impact investment bank ClearlySo announced in December 2016 that it has launched ClearlySo ATLAS, an impact measurement solution for private equity and venture capital investors.

The new tool is being marketed as a way to help “private equity and venture capital investors assess the social and environmental impacts of their investments and provides practical suggestions for action.”

According to announcement, ClearlySo ATLAS assesses impact by combining bespoke methods and a number of measurement practices including  Private Equity Reporting Group, Principles for Responsible Investment, European Union Directives and Red Line Voting and which are then measured against UN Sustainable Development Goals.

Source: ClearlySo Atlas

Filipina returns to Philippines, starts a social enterprise

By
Gino Baltazar, MS Finance
-

After living the “American dream” in the US for over two decades, pedigreed Marie Cavosora returned to the Philippines to live the “Filipino dream” through CalaBoo Creamery, a social enterprise that supports local dairy farmers and creates dairy products from grass-fed carabaos through social public-private partnerships.

Her pedigreed background comes from many years of corporate marketing and advertising experiences in firms like Pepsi, Disney, IBM while traveling the world for business and as a one-time scholar while attending studies at Mount Holyoke in New York.

Background

Her enterprise’s name, Calaboo, is a fun wordplay of “kalabaw,” the Filipino word for carabao or water buffalos, the domesticated workhorse used by Filipino farmers to till land for rice and crops throughout the country. The Philippines has 2.8 million such animals in the country, a well-developed industry could provide a vital means of additional income for farmers across the country.

Calaboo makes probiotic-rich butters (Boo la la Boo-tter, or European-style cultured butter; and the American-style cultured butter Simply Boo-tter), yogurts (Yogi Boo, with three flavors: Perfectly Plain, Coco Sweet, Honey Love), and cheeses (Keso Cariño, or the fresh cheeses, and Gourmet Keso, the aged variety), from fresh carabao’s milk, with no additives, preservatives or refined sugar, has less cholesterol and more calcium than cows.  The carabaos are raised sustainably and fed a diet rich in nutrients and locally sourced food.

USDA

Calaboo aims to penetrate a local market (see 2014 chart) that has been monopolized by imported dairy manufacturers, where imported milk volumes vastly exceed those that are exported, and using the talented founder’s words, “end poverty for Filipino farmers.”

Source: Calaboo
YouTube interview of Marie Cavosora: ABS-CBN

Systemic Wealth Inequality and Jobs

By
Gino Baltazar, MS Finance
-

Much ado has been made recently of the improving unemployment rates in the United States.  The US economy under President Obama’s term, according to sources such as the Atlantic, added 11 million jobs and reduced unemployment from 10 percent to below 5 percent as of December 2016.

However, as good as the country’s economic progress has been under the outgoing administration, there is much more work to do.

For starters, the labor participation rate, or the share of American civilians over the age of 16 who are working or looking for a job, has remained stubborn at just over 60%, suggesting many eligible workers have given up gainful employment. When counted along with those who are out of work, Gallup says, the real unemployment rate is actually over 10 percent instead of the accepted 5 percent rate.

Social mobility, measured in terms of dollars passed on inter-generationally remain persistently abysmal. Children born to 90th-percentile earners are typically on track to make three times more than the children of 10th-percentile earners.  The effect is said to be stronger on men than on women, reducing the likelihood of marriage later in life among those who have high net-worth, and which in turn reduces the likelihood of wealthy children having a chance to positively impact their communities and broader society.

Which brings us to the subject of wealth-inequality which has worsened over decades of taxation, globalization and trade policies that have mostly benefited top earners.  And while the data is clear (see the video), the prescription policies remain myopic.  Channeling money out of political campaigns to people who would benefit from stronger social policies, improving affordable housing and housing-voucher programs would give poorer families a chance to move into better neighborhoods, and restructuring tax incentives in a way so corporations and the few high net worth consumers contribute their fair share are just three that would serve the interests of the many.

The incoming administration has a real opportunity to make bold changes and lasting impact, and here’s to hoping that it does.

Sources: Gallup, Atlantic

Advocating for NMTC’s permanence

By
Gino Baltazar, MS Finance
-
Source: NMTC Coalition Cleveland

The recent announcement in November by the Community Development Financial Institutions fund (CDFI) that 120 organizations will receive a record $7 billion in New Markets Tax Credit (NMTC) is the largest since its inception in 2001.

With the the clear impact it has demonstrated to ordinary working Americans and communities, such as those showcased by US Representative Pat Tiberi in Ohio, it is worth advocating for it to become more permanent.

NMTC – What It Is

The NMTC program encourages private capital into low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax in exchange for making equity investments in specialized financial intermediaries called Community Development Entities (CDEs).

The credit totals 39% of the original investment amount that is claimed over a period of seven years. (CDFIFund.gov)

CDFIs are financial institutions that have a primary mission of promoting community development among their target markets, certified by the US Treasury’s CDFI Fund.  There are over 1,000 certified CDFIs in all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands.

The certification is a designation given by the CDFI Fund to specialized organizations that provide financial services in low-income communities and to people who lack access to financing.

Stories of Impact

A historic former commercial garage in North Philadelphia turned into mixed-income housing, small business incubator space and a high-quality childcare facility, a brand-new northeast Washington, D.C., building where 300 adult students annually will receive job training and 30 homeless, low-income families will have affordable housing, are two other examples of NMTC’s positive impact, along with those in Rep. Tiberi’s district in Cleveland, Ohio.

Despite these proven benefits, the NMTC is not yet a permanent part of the tax code.  The NMTC program did win some program stability, winning a bipartisan vote of support last year, when Congress reauthorized it for five years instead of the previous pattern of one- or two-year reauthorizations.

However with a new US president and an incoming Republican-controlled Congress, this may or may not change.  Stay tuned.

Sources: Cleveland.com, CDFI Fund, NextCity 

 

Lucky Iron Fish’s Mission in Cambodia

By
Gino Baltazar, MS Finance
-

Toronto-based Lucky Iron Fish is one example of a small but growing number of startups that are devoting their entire operations to addressing societal problems.

Lucky Iron Fish via Bored Panda

The young startup has created a $5 iron-molded fish-shaped ingots that when used in cooking soups or cooked rice, “substantially reduces instances of iron deficiency and iron deficiency anemia.”

Iron Deficiency’s Impact

The World Bank estimates $70B (USD) in GDP is lost every year due to iron-deficiency related productivity loss, and 3.5 billion people are affected at some stage in their lives in both developed and developing countries. Over 50% of Cambodians are affected by iron deficiency anemia.

Lucky Iron Fish’s products are recycled from used materials like discarded brake hubs in Cambodia, a poor war-torn country in IndoChina that is still reeling from its brutal history. In Cambodia, a $5 Lucky Iron Fish provides the daily iron needs for a whole family for 5 years, and helps provide jobs to nearly 50 disabled Cambodians for the startup, many of whom are disfigured landmine victims from low-income communities.

As a proxy way of measuring impact, Lucky Iron Fish has been certified as a B-Corp which in effect signals to other firms that it has been independently reviewed by an outside party in terms of its community, HR, environmental impact and practices. The next challenge might be how this type of proxy measure will scale as more startups deliver purpose-driven products, and firms like Lucky Iron Fish continue to grow.

Sources: MaRS, ChangeMakers, Lucky Iron Fish

Improving broiler chickens farming practices by 2024

By
Gino Baltazar, MS Finance
-
Aramark

Three animal charities – The Humane League, The Humane Society, and Compassion in World Farming – are attempting to impact and sway chicken farming practices in the US. Against a backdrop of nearly 9 billion chickens consumed annually, their efforts are not insignificant.

Impact

Among the results – a November announcement by Aramark to pursue animal welfare and supply chain improvements, including reducing, chief among them, abnormal animal weight gain, confinement, cage density and painful procedures.

Panera, a restaurant chain that serves more than 10 million people a week and raises up to 17 million chickens for their meat, also announced similar commitments in December, according to CIWF.

Sources: Forbes, Aramark, Panera

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