Community Impact at Northern Trust
Community Impact at Northern Trust
Community involvement is deeply rooted in the Northern Trust culture, affecting the way we do business globally. Since our founding in 1889, Northern Trust has actively advanced a culture of caring and a commitment to invest responsibly in the communities we serve worldwide. This philosophy continues today through progressive community investments; contributions to service and community organizations; partner volunteerism; gifts in-kind such as donations of meeting space, catering, supplies and other knowledge services; and directorship guidance to charitable and civic boards.
Community Impact Strategy
Our approach to supporting the community takes into account the overall impact on our clients, shareholders, partners and communities we serve, and we execute each activity with these priorities in mind. Our scope of community involvement provides sustainable company benefits:
- Corporate Alignment – With our Wholesale Community Reinvestment Act (CRA) designation, we can more fully align the firm’s business strategy with our community reinvestment strategy. The wholesale designation allows us to concentrate efforts and resources on direct investments that have a sustainable community impact.
Brand Awareness – Our brand strength relies on community sponsorships and alignment with highly respected nonprofit institutions. Integral to our marketing strategy, our charitable grants, event sponsorships, charitable and civic board representation and employee volunteerism all help raise brand awareness and brand equity in target markets around the world.
Business Development – We work directly with each ofour business units to identify community investment opportunities related to key marketing and client relationship efforts. Given the philanthropic nature of our client base, community involvement has proven to be an effective business development tool providing access to key clients, prospects and influencers.
Talent Acquisition & Development – Community engagement opportunities, paid-time-off for volunteerism and matching gift programs provide a competitive advantage in partner recruiting and satisfaction. Employee volunteerism was strong in 2014 and consistently is a priority for college graduates considering future employers. Nonprofit and civic board involvement is integral to talent management as it provides partners with leadership, skills development and networking opportunities beyond the scope of their responsibilities.
Our global corporate philanthropy program awarded more than $15 million to local and international civic and charitable organizations in 2014, investing 1.2% of annual pre-tax profits into the community.
Northern Trust Community Partners is a global program that helps employees identify, engage and develop relationships with local charities. These relationships include both financial and volunteer support. We offer two full days of paid time-off for partners to spend volunteering with an approved nonprofit, and as was reported in the 2014 Volunteer Survey, partners also generously gave approximately 125,000 hours of their personal time to charity.
Northern Trust carries an “Outstanding” CRA rating. New CRA investments originated totaled $262.7 million in 2014. Our directors receive an annual CRA and fair lending report and have approved our policy related to community reinvestment. As of December 31, 2014, the community investments portfolio totaled $577.9 million for the following:
- Education and Social Services – $58.7 million outstanding. Objective: Provide long-term capital and equity for the development of community and education facilities such as charter schools, health clinics and day care centers by nonprofit partners.
Affordable Housing – $458 million outstanding. Objective: Support the creation and retention of affordable rental housing and affordable homeownership in partnership with nonprofit lenders and developers.
Job Creation – $42.1 million in asset value. Objective: Support nonprofit micro loan origination programs and the expansion of businesses and job creation through private equity funds.
Wealth Accumulation – $19.1 million in asset value. Objective: Equity investments and certificates of deposits in community development banks provide capital to develop products and services to meet the needs of the unbanked, underbanked and underserved members of our communities.
These community partnership investments are longer-term debt investments at low interest rates, equity investments, tax credit investments, subordinated debt investments that carry equity-like terms or marketable securities with a community development purpose.