Chase will pump $40 million into revitalizing Chicago’s South and West sides – Finance News

on Sep14

14 September 2017 | 10:30 am

JPMorgan Chase wants to do for Chicago’s South and West sides what it has begun to do for Detroit. The nation’s biggest bank, and also the largest in Chicago, is committing $40 million over the next three years to help rebuild and re-energize parts of the city torn by violence and unemployment.

The program, announced today, is modeled on a larger-scale effort Chase began three years ago in Detroit. There, the bank committed $100 million to a comprehensive program to address Detroit’s economic woes. Earlier this year, Chase boosted that pledge to $150 million to build so-called affordable housing, fund small businesses and train workers.

Chicago is the next chapter in a wholesale revamping of the $250 million Chase spends globally each year on philanthropy. Instead of the traditional, wide-ranging civic support that companies of Chase’s size traditionally have offered, Chase CEO Jamie Dimon decided five years ago to focus nearly exclusively on creating economic opportunity in parts of the country that are badly lagging. “We’ve learned a lot about what works and what doesn’t work,” said Peter Scher, Chase’s head of corporate responsibility, in an interview.

The bank will focus on supporting job training, commercial and residential development, and financing small businesses that tend to be the main job creators in low-income neighborhoods. To do so, it will channel most of the money to existing nonprofits engaged in those efforts.

It’s the first-time Chase has made such a multiyear commitment in Chicago. The amount of funding represents about a 50 percent increase in the $8 million to $9 million the bank normally contributes here.

Recipients include the Arthur M. Brazier Foundation, which is building a training facility in Woodlawn to train workers in robotics, a skill needed by today’s manufacturers. The foundation is getting $500,000. Advocate Health Care and the City Colleges of Chicago also are receiving funding to support training programs. Funds to the Chicago Community Loan Fund and Chicago Neighborhood Initiatives will buttress community redevelopment in blighted neighborhoods.

And Chase already has committed $400,000 to nonprofit lender Accion Chicago to back minority-owned neighborhood businesses that struggle to access traditional bank loans. Many of these business owners turn to high-rate online commercial lenders.

Expect more of that. One of the things Chase learned in Detroit, Scher said, was the hunger for small-business lending support. The bank quickly shifted more of its funds to that.

HOME HELP

The last area of emphasis will be financial education for low-income households. About 2 of every 3 Chicago households have less than $2,000 in savings, and nearly 40 percent are subprime credit risks, according to the Urban Institute at the University of Chicago. Chase’s partners in that effort will include the Resurrection Project in Little Village and Neighborhood Housing Services, the city’s largest nonprofit housing lender and rehabber.

With the bigger investments will come greater scrutiny than in the past over how the dollars are being used and the results, Scher said. In Detroit, Chase gets quarterly reports from recipients, assessing things like job creation, how many workers have completed training programs, and whether those trainees found employment.

“If the things we’re doing can create greater economic growth in Chicago, that’s a good thing for our bank and that’s a good thing for our shareholders,” Scher said.

Success on the South and West sides could mean more money in the future as well, Scher said. Chase was so pleased with what was happening in Detroit that it added $50 million to the five-year effort earlier this year.

Based in New York, Chase is Chicago’s largest retail and commercial bank, employing nearly 14,000 in the area and servicing more than 5.8 million local consumers. Its 350-plus local branches are by far the most extensive bank-branch network in the area.



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