Fintech Firm collaborates with Mastercard and NeuGroup to promote a more inclusive economy.
Making a positive social impact has taken on high importance for businesses in the last year, but the world of impact investment is still cloudy for many. It can be difficult to decipher which investment options will actually have a tangible effect on the community, not to mention which make economic sense. CNote, a women-led impact investment platform, is here to help.
- CNote uses technology to connect investors with diversified and proven community investments and cash deposit opportunities that generate economic mobility and increase financial inclusion for under-served communities.
- Last October, Mastercard announced a $20 million partnership with CNote as part of Mastercard’s broader commitment to help close the racial wealth and opportunity gap
- “The inequalities that exist are deeply ingrained in historic systems and processes, which means we have to make an ongoing, active effort to redesign them,” said CNote CEO Catherine Berman in Mastercard’s press release. “Financial freedom and economic opportunity should be accessible to all – and not denied because of the color of someone’s skin or where they were born. This is what we are fighting for at CNote.”
Mitigating risk, preserving capital. Through CNote’s nationwide network of federally certified Community Development Financial Institutions (CDFIs) and depository institutions like low-income designated credit unions, institutional investors can deploy capital at scale, increasing access and funding loans that change lives and communities for the better.
- CNote was built to streamline community investment for institutional investors, removing common friction points, minimizing risk and streamlining the administration and data collection processes that can often become onerous for large allocations.
- Its mission is to help close the wealth gap in America by making impact investing straightforward, measurable and adaptive to specific risk and liquidity preferences.
Impact investment made simple. In what CNote calls “The Virtuous Cycle,” money invested on its platform helps to build wealth and economic self-sufficiency in low-income communities across the country by fueling an engine of sustainable growth—small businesses.
- Those successful firms create jobs and grow wealth in their communities, which can build a positive feedback loop of economic development while delivering tangible financial and social returns to CNote investors.
- CNote simplifies the community investment process by providing end-to-end investment solutions like the insured Promise Account to quickly drive capital into communities. Institutions can also use CNote’s platform to build bespoke impact investments tailored to their specific ESG priorities.
- This allows institutions to mobilize capital to address pressing social issues like the lack of affordable housing, gender equity and climate change, while maintaining a strong community investment focus.
- CNote technology services make it more cost-effective for institutions to directly invest into community organizations and lenders by simplifying the identifying, servicing and impact reporting efforts through data and automation.
Mastercard’s Impact. Demonstrating a commitment to supporting women-led firms and fostering a more inclusive economy, Mastercard originally supported CNote through its start-up engagement program, and more recently, with contributions from Mastercard and the Mastercard Impact Fund made a $20 million commitment to CNote’s Promise Account, expanding their partnership.
- The Promise Account, just one of CNote’s investment options, is a cash management solution that’s structured to provide FDIC and NCUA depository insurance coverage of all funds while giving institutional investors a single place to put their cash to work for positive social impact and competitive return (see graphic below).
- This single point of management reduces the administrative burden that would exist when manually monitoring and opening deposit accounts across numerous community financial institutions and makes it easy to scale investments on demand.
- Recognizing the vital role CDFIs can play in providing access to funding and pathways to financial security for underserved communities, the Mastercard Center for Inclusive Growth partners with many leading CDFIs and innovative firms like CNote operating in the community finance ecosystem.
NeuGroup’s Impact. NeuGroup’s ESG Working Group was founded in 2020 after more than 20 separate sessions in NeuGroup meetings focused on ESG-related topics. It is open to a variety of NeuGroup members, but includes a core group of about a dozen companies considered advanced in these topics.
- Monthly sessions are intended to quickly break into smaller groups (broadly, those with deep experience to compare notes and develop lists of best practices), and companies just getting started and wanting to learn from one another.
- The intent is for this group to occasionally bring in outside experts for trends and updates, to document key learnings and best practices, and to spawn Virtual Interaction Sessions where those learnings could be shared with the broader NeuGroup Membership.
- At a recent NeuGroup Treasurers’ Group of Mega-Caps interim monthly meeting, members of the t-Mega group had an opportunity to attend an interactive session with Mastercard on their partnership with CNote to provide recovery and growth funding for underserved communities in the U.S. through their insured impact cash management solution.
- If you’re interested in learning more about NeuGroup’s ESG initiatives, please click here and fill out the form, and we’ll follow up with you regarding next steps.