In just the past year, Amalgamated expanded into San Francisco with a merger, held an initial public offering, launched a foundation and donor advised fund platform, and hired a prominent voice in progressive grantmaking to oversee banking with its philanthropic client base. “We really are trying to pivot away from just being a bank for the New York labor movement to really being a national bank for the progressive nonprofit community,” Keith Mestrich, Amalgamated’s president and CEO, told IP.
Its philanthropic strategy is part of the overall rise of the bank as a major financial player on the left, bouncing back after near collapse in 2011. While still geographically small and serving a niche market, the 95-year-old, largely union-owned bank has gained new relevance by picking up the DNC and several Democratic candidates and organizations as clients, serving an ever-important role as campaign cycles grow. It’s also continued to be a voice for reform through its employment practices, public stances and shareholder activism, and sought to attract like-minded consumers concerned about what their money is supporting.
Strengthening ties to progressive donors and foundations has obvious value for such an entity, and it’s reflected in a recent major hire. To run its commercial banking strategy for foundations and other philanthropic clients, Amalgamated just appointed Tyler Nickerson, formerly of The Solutions Project and a reform-minded voice in the progressive philanthropic space, as its first vice president.
While Nickerson doesn’t have a finance background, it’s common for Amalgamated to hire leaders with backgrounds in the nonprofit, political and labor arenas it primarily serves. Nickerson said he sees it as a unique opportunity for someone on the grantmaking side to move over to the financial side at a time when philanthropies are increasingly conscious about their investments.
“What appealed to me, really, was an opportunity to come to this institution that I had deep alignment with,” Nickerson said. “I was intrigued by their boldness in making really clear indications about their values to support philanthropy in this important moment that we’re in as a sector.”
Nickerson said the bank hopes to continue the strong growth they’ve seen with the philanthropic sector, with nearly 30 foundation clients to date, including longtime client the Nathan Cummings Foundation and new addition the Rockefeller Family Fund. Amalgamated currently offers services like screening investments from industries such as fossil fuels and private prisons; it is now exploring new ways to help funders move money rapidly, and to make program-related investments, he said.
In taking over the philanthropic banking strategy, Nickerson is building on the work of Anna Fink (formerly of the Wyss and New World foundations), who launched the bank’s philanthropy division in 2016, and now serves as executive director of Amalgamated’s new foundation, which launched in May.
The foundation took over the bank’s corporate giving, but most interesting about the launch of the foundation is its donor-advised fund platform. While DAFs have been a long-running topic of debate, lately, we’ve seen heightened scrutiny of DAFs, which are increasingly popular among donors, and a boon for financial institutions like Fidelity Charitable. Meanwhile, they’ve drawn criticism as “warehouses of wealth” that offer tax breaks, but avoid the payout and transparency rules foundations must follow.
But just as it is a different kind of bank, Amalgamated hopes it can provide a “different kind of DAF,” Fink said, and put forth examples of best practices. “We’ve entered the DAF space with our eyes wide open.”
Such best practices include encouraging donors to take a voluntary giving pledge to give 10 percent of the value of their funds annually, double the payout required of private foundations. Fink says all of the donors currently on their platform have adopted the pledge.
They’re also encouraging fund owners to participate in collective giving opportunities, such as a recent rapid response fund for groups working on family separations at the border, including United We Dream, the Florence Immigrant and Refugee Project, and the Texas Civil Rights Project.
Fink said the foundation is consulting with philanthropic scholars and advisors on ways to increase the transparency of its funds, and is forming an advisory council of philanthropic and movement leaders to guide the program and its donors.
Amalgamated’s foundation seems to be putting together a unique sort of program for donors, and the bank is handling no small amount of cash for mission-driven organizations. But it’s still a relatively small player in the enormous DAF space (the Silicon Valley Community Foundation alone is sitting on $13.5 billion in assets). Could Amalgamated have an impact on the larger philanthropic sector, perhaps through its role as an advocate?
It’s still early, but Nickerson said Amalgamated’s best practices could demonstrate what might make sense from a policy perspective. And in August, he co-authored an op-ed on the future goals and standards we might seek for DAFs.
The most important thing for Amalgamated, the way it makes an impact, Mestrich said, is serving its clients and allowing them to achieve their missions. But as the foundation grows, he does hope they can become meaningful players. “We’re new in this space, but I do think we want to be leaders in this space, in terms of thinking about how donor-advised funds are important contributors, from a philanthropic perspective.”