In late 2008, the world was left reeling from one of the worst economic events in the modern era. A chain reaction of events ending with massive financial institutions like investment banks Lehman Brothers and Bear Stearns, and consumer banks like Washington Mutual collapsing in the span of a few short weeks helped create one of the worst periods of long-term unemployment and economic decline the United States has seen since the Great Depression of the 1930s.
One of the other lasting effects of what later became known as the Great Recession was a substantial decrease in the American public’s faith in financial institutions. A caricature developed of the evil, greedy Wall Street investor, only out to line the pockets of the wealthy, but not every financial institution and investment organization is out to help the rich get richer—or even turn a profit. Here is a small sample of them:
Unlike for-profit banks, whose responsibility is to make a profit for their shareholders, credit unions are nonprofit financial cooperatives owned by the depositors and members of the credit union. However, under current law, credit union membership is limited to employees of certain organizations or residents of certain counties —in Colorado, for instance, most public employees are eligible for membership in the Credit Union of Colorado. Additionally, you may be eligible for membership in the Public Service Credit Union and Bellco Credit Union.
Credit unions offer traditional services like checking and savings accounts, home and auto loans, and others you get at private banks, but many offer other helpful products like credit score analysis, tax help, and even investment tools.
Nonprofit Institutional Investors
One common nonprofit institutional investor is a public retirement or pension fund like Colorado PERA. These investors invest large pools of capital on behalf of a group of people, like public employees, and then return that money back to the members. In the case of Colorado PERA, nearly $45 billion in assets are professionally managed in Denver and elsewhere, and the returns on those investments are used to ensure retirement benefits earned by employees over the course of their careers. Many of these investors are also responsible for administering health care plans, like PERACare, and additional savings and investments like PERA Plus 401k and 457 plans.
Community Development Financial Institutions (CDFIs)
In many communities, due to economic or societal factors, traditional financial services like lines of credit were not available. This was, and is, especially true particularly in underserved and minority populations. CDFIs became a solution to this problem. Using a combination of funding from government programs, as well as private groups like religious organizations and philanthropists, CDFIs have become more prevalent, and today there are nearly 1,000 CDFIs serving a diverse range of communities. In Colorado, one CDFI is Colorado Enterprise Fund, which has “provided more than $38 million” in loans to small businesses who couldn’t get traditional financing. Among the businesses they have provided financing to is Sweet Action Ice Cream, a popular new business in the South Broadway area of Denver.
Financial Literacy Nonprofits
One of the biggest challenges most people have with money and finances is a lack of understanding how these services and products work. Many nonprofits exist to help service the need for better education in this area. Nationally, one of the leaders is the National Endowment for Financial Education (NEFE). This private nonprofit performs research used to drive improvements in financial education, as well as helping to provide funding for both youth and adult financial education programs. Locally, one of the most prominent nonprofits providing financial literacy to children is Junior Achievement Rocky Mountain, the Colorado chapter of the national organization which recruits professionals to teach kids about money in schools. If you’re interested in volunteering, check out their website for more information.