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Profits with Purpose: ShoreBank

43 entrepreneurs who are changing the world
Social Capitalist 2008 Winner

Profits with Purpose: ShoreBank

Joseph E. Hasten, CEO
Chicago, Illinois

"Banking on Community and Environmental Change"

ShoreBank began with a question: Was it possible to harness the mechanisms of capitalism to achieve a social purpose? Alarmed by the decline in Chicago's urban neighborhoods, ShoreBank's founders -- Ron Grzywinski, Milton Davis, Jim Fletcher and Mary Houghton -- believed the answer was "yes." And so they set out to test their theory.

As first-hand observers of the Great Society, they understood that fixing the problems of urban decay would require a different kind of approach. As bankers, they believed that decaying neighborhoods needed local, self-sustaining enterprises -- with the independence of a capital base and the discipline of a profit motive -- to bridge the gap between private gain and public good.

They imagined a new kind of institution to support those enterprises: a community development bank ... a bank that was tough-minded about loans, tough-minded about borrowers, one that could satisfy the most demanding federal examiners and still make a profit by transforming underserved urban neighborhoods. They wanted to prove that a bank could do well by also doing right.

Here's how ShoreBank goes about it.

The bank loaned to local people who want to renovate buildings, quickly discovering an untapped pool of entrepreneurial energy. It also aimed to reverse the flow of neighborhood deposits, seeking to recapture South Side customers for ShoreBank.

To attract capital from beyond the neighborhood, the bank created Development Deposits, targeted to people who wanted to invest in local development. The success of these Development Deposits, along with the help of depositors and equity investors, allowed ShoreBank to reverse the capital flow and begin the process of neighborhood regeneration.

Today, ShoreBank continues to spur the rebirth of neighborhoods by providing individuals, small businesses, faith-based organizations, nonprofits and many others with access to the resources and information that fuel growth and rebirth.

In addition to the main bank, ShoreBank operates a variety of nonprofit affiliates and an international consulting company -- ShoreBank International -- that helps financial institutions, governments and communities around the world fund small businesses and housing. This company grew out of an invitation in the 1980s to advise Muhammad Yunus, the 2006 Nobel Peace Prize winner, and to date has worked with nearly 50 small banks in more than 40 countries to advance over $300 million in small loans.

Since the 1990s, ShoreBank has focused on building communities that are also environmentally sustainable. In Chicago, it funded the Chicago Christian Industrial League's new headquarters, a supportive housing center for ex-offenders, featuring ground-source heating, green roofs and solar lighting. ShoreBank was one of the first financial institutions to offer free energy audits and a mortgage rehab loan for energy-saving home improvements. These products are helping homeowners recoup their investments, while reducing consumption and greenhouse gases.

The newest ShoreBank non-profit, the Center for Financial Services Innovation, focuses on the underbanked -- the 40 million Americans without access to traditional financial services -- and helps financial institutions serve them in a manner that is beneficial to both.

With assets of $2.1 billion and more than 500 employees, ShoreBank continues to demonstrate that serving the triple bottom line of profitability, community development and conservation is realistic and achievable. It has invested more than $3 billion in businesses across the U.S., created 12,000 local jobs and helped finance the purchase and renovation of 52,000 units of affordable housing.

If you want to support our mission and make a difference, the new ShoreBank Online High Yield Savings Account at makes it easy to invest while receiving a competitive rate and a social return. Deposits placed in a FDIC-insured ShoreBank savings account help fund the bank's sustainable and environmentally friendly developments, including its mortgage rescue program that is enabling homeowners with rapidly increasing ARMs from other banks obtain a traditional, fixed-rate mortgage from ShoreBank. The rescue loan program is reducing monthly costs while building equity and strong, stable communities.

After all, that's what ShoreBank is all about.