Key Bank begins $16.5 billion Community Benefits Plan
by: Gino Fanelli
In an effort to better support small businesses, low-income housing and charitable endeavors across the country, Key Bank has pledged $16.5 billion, or approximately 12 percent of the bank’s assets, over the next five years into the National Community Benefits Plan.
The plan, announced in March 2016, is a collaboration with the National Community Reinvestment Coalition, an organization dedicated to injecting capital into underrepresented communities in order to spur economic development, led by an 18-member National Advisory Council announced on Aug. 16. Following the acquisition of First Niagara Bank in 2016, Key Bank pledged $20 million to the First Niagara Foundation, a community reinvestment program focused on education, mentoring, workforce and neighborhood development. The Council met for the first time on Thursday, Aug. 3.
Additionally, of the 18 members of the Key Bank’s National Advisory Council, two are based in Rochester: Hubert Van Tol of community development nonprofit PathStone Enterprise Center and Ruhi Maker of Empire Justice Center. Along with the National Advisory Council, the Plan has established Regional Councils for Western New York, the Great Lakes Region and Albany.
The Community Benefits Plan has invested $1 million over the course of five years, Van Tol said, with $200,000 already invested.
“They also took over First Niagara’s program investment in the Enterprise Center,” Van Tol said. “That is low-interest, long-term loans totaling $1 million in Rochester and half a million in Buffalo, that we in turn use to make loans to small businesses.”
As far as benefiting community through smart investment, Van Tol said his place stands as getting money into the hands of minority-owned businesses.
“We have made a commitment to try and increase the number of small businesses owned by African-Americans and Latinos by at least 15 new businesses per year,” Van Tol said. “We’re getting to that, since December we’ve loaned to 10 African-American businesses in Buffalo that were previously barely starting up. That’s the kind of impact we are focused on.”
The $200,000 awarded from the plan will be placed into staff and capacity building, Van Tol said.
While Van Tol’s focus is primarily on investment into small businesses, the National Community Reinvestment Plan aims to impact the 15 states served by Key Bank through a heavily layered mix of investment. Specifically, of the $16.5 billion, the plan pledges $5 billion to residential mortgage lending, $2.5 billion to small business lending, $8.8 billion to community investment, $3 million to product development aimed at underserved rural and urban communities an $175 million into philanthropy.
In a release from Key Bank, Chairman and CEO Beth Mooney outlined her hopes for the plan’s impact.
“The National Community Benefits plan embodies and amplifies KeyBank’s purpose to help clients and
communities thrive,” Mooney said. “We believe in the power of partnership and accountability as we carry out this mission. The National Advisory Council will ensure that we have both as we move forward.”
This sentiment of partnership and accountability was echoed by president and CEO of the National Community Reinvestment Coalition John Taylor.
“KeyBank’s commitment raised the bar,” Taylor said. “Leadership matters, and when it mattered most Beth Mooney and her team stepped up and delivered for communities. We look forward to a meaningful partnership of mutual accountability as we work together to build stronger communities.”