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December 12, 2005
Socially Responsible Investing Advances Anti-Racism in Helping Rebuild New Orleans
    by William Baue

In addition to supporting community investment and leveraging influence through shareowner advocacy, social investors can help rebuild in the aftermath of Katrina by naming root problems.


Systemic racism played a decisive role in the human impact of Hurricane Katrina, particularly in racially segregated New Orleans. As the city is rebuilt, it remains to be seen the degree to which anti-racism activism can restructure the social architecture of the region to create a more equitable social ecology. Socially responsible investing (SRI) is being called upon to help.

On Friday, Boston-based Haymarket People's Fund (which funds local social justice groups and was named after the 1886 worker protest) hosted a forum entitled "Putting Communities First: Rebuilding New Orleans and the Role of Social Investment and Progressive Philanthropy." Speakers included Ron Chisom, executive director of the New Orleans-based (but currently displaced) People's Institute for Survival and Beyond, a prominent anti-racism training and organizing institution, and Barbara Major, co-chair of the Commission to Rebuild New Orleans. Attendees included Tim Smith, president of the Social Investment Forum (SIF--the SRI industry organization) and senior vice president of Walden Asset Management, and Dawn Wolfe, who conducts social research and shareholder advocacy for Boston Common Asset Management.

"Katrina rolled back the lid and exposed the racism that exists in New Orleans and American society--so that's a fact," Mr. Smith told SocialFunds.com. "One of the first ways you address such problems is by naming them, by saying, 'this is what we see happening.'"

"A lot of people don't want to name these root causes--the federal government certainly doesn't," pointed out Mr. Smith. "The SRI community is trying to address the root cause issues--whether it's through community development investing or the Katrina Business Guidelines, which Calvert came out with and many people supported."

The speakers left a strong impression on Ms. Wolfe, who pointed out that even before the hurricane New Orleans had the second highest rate of child poverty in the nation, that almost a third of the city lives below the poverty line, and two-thirds of New Orleans residents are black.

"The event was an eye opener in more than one respect--it was a unique opportunity to hear about the current state of the Gulf Coast from two community organizers who are living and breathing its effects everyday, on the ground," Ms. Wolfe told SocialFunds.com. "It was an unedited, non-sugarcoated, non-politically correct account of how small businesses were affected by the flood and what it will realistically take to save them, and ultimately to rebuild an equitable and just New Orleans."

Ms. Major expressed appreciation for the generosity exhibited by many in the wake of the flood, but also expressed frustration that such generosity is not targeting the real problems.

"People just want to give us butter," said Ms. Major at the event. "Yes, we need butter and food, but there are alternative ways to give as well."

Mr. Chisom echoed this sentiment, stressing that people need to rethink their giving--in addition to making material donations to meet immediate needs, donors need to advance a larger strategy that addresses the structural problems exposed by Katrina. One alternative enumerated by Ms. Major and Mr. Chisom is vigilant monitoring of the rebuilding process to pressure decision-makers about the need to rebuild in a non-racist way.

Another alternative is establishing products to support land trusts, which are urgently needed to allow residents tempted to sell their storm-torn property at "fire-sale" prices time to make more measured decisions once questions about rebuilding have been settled. They also recommended giving to non-traditional sources, including funding policy-oriented groups working to shift the way government responds.

"The politicians won't save us--we can't wait on the government right now," Ms. Major said.

Ms. Wolfe agreed.

"Billions of dollars in aid have been pledged by the federal government to rebuild New Orleans, but the question is, where will it be spent?" Ms. Wolfe asked. "The hardest hit neighborhoods are poor and largely made up of minorities, but while they shouldered a disproportionate amount of the suffering, there is no guarantee they will receive equitable compensation to tackle the enormous unemployment and human services crises they face."

While limited in the influence it can exert on government policy, SRI can use shareholder advocacy to encourage companies to have greater employee and management diversity and end discriminatory hiring and lending practices. Unfortunately, shareholder advocacy cannot exert influence on the practices of the thousands of companies too small for stock investment, or those not publicly traded.

The SRI community can, however, continue to name systemic problems.

"One of the most visible tragedies of the flooding of New Orleans was its disproportionate affect on the poor--people who lacked the means and the skills to evacuate, protect themselves and now rebuild their lives," said Ms. Wolfe. "But poverty isn't just economic, it also result a legacy of racial discrimination is present."

"Poverty and racism is a vicious, perpetuating cycle--rebuilding from scratch can be considered an opportunity to undo that cycle," she concluded. "We can help build a better New Orleans."

 

 
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