In essay “In the ‘People Business’: A Call for Interdependence” Clearinghouse CDFI President and Chief Executive Doug Bystry wrote as his final point, “What we build in our minds is just as important as what we build with our hands.”
It’s a thought-provoking conclusion to a piece that extols interdependence as a strength and the idea that people working together can build something great.
The company he founded 22 years ago was the idea brought to life. Clearinghouse is a lender that finances building projects in low-income, underserved com-munities.
Headquartered in Lake Forest, it’s a B Corp, or “benefit corporation,” a type of for-profit that includes positive impact on society, workers, the community and the environment as goals to balance profit and purpose. To earn the certification, businesses must score 80 out of 200 possible points on a 150-question online survey. They’re rated on everything from energy efficiency to employee programs, to corporate transparency.
Clearinghouse invests in projects and activities that benefit the local community through financial donations and staff volunteer time. The holistic approach to caring for the community is one reason it’s been awarded special recognition on the Business Journal’s second annual Civic 50 list in the small-company category.
From the Heart
B Corp status has become something of a badge of honor. A number of studies point out that consumers are more inclined to work with a socially responsible company, especially millennials. Clearinghouse says employees volunteer their time not because it needs to maintain the B Corp status, though.
“We believe in volunteering in the community because it is our responsibility as a member of the community, and as a certified B Corp, to provide benefit to all stakeholders,” Bystry writes by email.
Volunteering gives staff an opportunity to achieve a deeper sense of purpose, commit to issues and causes they believe in, and increase satisfaction in the workplace.
Throughout the year, staff donate time to local nonprofit organizations and hold events like clothing and food drives to support people in need. Employees are paid for the time they volunteer on issues dear to them, whether they offer one hour, one day or an entire season. For example, every year a staff member volunteers his time to coach the Santa Ana High School football team and also to mentor students who live in low-income areas and typically face challenges with crime, gang violence, and lack of resources and positive role models.
Volunteering and financial support go hand-in-hand at Clearinghouse. “We un-derstand that philanthropy is about giving according to the organization’s needs,” Bystry says. “That’s why Clearinghouse provides financing through our core business and donates volunteer hours to the same organization.”
As a company, it makes charitable contributions to support various Orange County organizations, ranging from women’s shelters to youth-mentoring organizations. It says it contributed 7% of its profit last year to nonprofit organizations.
Big Plans, Programs
Clearinghouse says its people are at the center of the business—the people who secure loans through the company to build apartments and homes in low-income areas, and the employees who help make it happen. Bystry says he believes working together strengthens communities. No one can do it alone, he says, and that’s part of the inspiration behind two of its most robust programs.
Building Bridges through Outreach Leadership Development is a program inspired by Bystry’s friend and mentor Allen Baldwin, longtime executive director of the Orange County Community Housing Corp. Consistent with the values of the B Corp community to “build bridges,” it’s a part-time, paid summer internship program for college-bound high school juniors and seniors from low-income families.
Another program is the Ripple initiative, or Raising Impact for People and the Planet with Leveraged Efforts, which works to increase beneficial impacts of Clearinghouse lending.
“As a B Corp, we consider community impact an important aspect of every decision,” Bystry writes. “Our borrowers’ impacts through their clients, suppliers, workforce, and partnerships are just as important as our own.”
Through the initiative, borrowers are invited to take the Ripple Challenge by using an assessment tool to measure their impact on their workers, community and the environment. It allows business owners to evaluate their companies’ strengths, room for improvement, and how they stack up against others. The goal, Bystry says, is to “create positive ripples through our lending practices. We want to see those ripples continue growing to reach beyond our borrowers to the communities of their clients, customers, workers and vendors.”
Strength via Giving
Bystry says that when he started the company in 1996, he envisioned Clearinghouse financing just a few highly impactful loans per year. As more companies embrace social missions of building something stronger in the community, he says his business has expanded to Nevada, Arizona, New Mexico and American Indian nations in Western states.
“I continue to be astonished by the number of high-impact loans that we now fund annually and just how far we have evolved over the past two decades to better serve that same mission.”
