"Our human destiny is inextricably linked to the actions of all other living things. Respecting this principle is the fundamental challenge in changing the nature of business."
- Paul Hawken, The Ecology of Commerce


- = Sustainable Economy Initiatives = -


ShoreBank Corporation is America’s first and leading community development and environmental banking corporation.

Origins and History
The origins of the Chicago-based ShoreBank Corporation lie with four friends who used to meet regularly in the late 1960s at ‘The Eagle’, a neighborhood gathering place near the University of Chicago, to explore their belief that community development and social justice could be achieved by community-focused banking.

Chicago’s South Shore community, nine miles south of the Loop, the city’s central business district, is home to 80,000 socially and economically diverse residents, many of whom live in various multi-family buildings.  However, in the 1960s, the community was afflicted with urban decay – disinvestments, abandoned buildings, population loss and high unemployment and crime.

By 1970 with more African-American families moving into the neighborhood, the owners of the $40 million South Shore National Bank decided it was time to relocate to downtown Chicago, on the assumption that local business opportunities were not a good investment.  But in 1973, when the federal regulators intervened and said the new demographics were not a good reason for relocating the bank, they put it up for sale. The four friends, Milton Davis, James Fletcher, Ronald Grzywinski, and Mary Houghton, with backgrounds in banking, social service, and community activism, raised $800,000 in capital, obtained a $2.4 million loan from American National Bank, and bought the bank.

During the 1960s, Ronald Grzywinski had run a successful program lending to African American entrepreneurs. As new owners of the ShoreBank, they pursued a similar track, lending out $6.7 million, but with disappointing results because the collapsing physical state of the housing made it seem like a hopeless case for business.

So Grzywinski and his friends changed tack. They teamed up with a non-profit development corporation, and started lending to local people who wanted to renovate the buildings, making it a principle that borrowers must renovate, and preferring to lend to landlords who lived on their rental property, encouraging them to improve the property.

In 1978, they formed three affiliates to support their work: the City Lands Corporation, a for-profit land development company which bought property in particular areas of the neighborhood, which it then renovated and sold, or managed; the Neighborhood Fund, which lends equity finance to minority-owned businesses to help them get going; and the Neighborhood Institute, a non-profit agency which work with local people to increase their economic opportunities and wealth creation through education, entrepreneurship and employment initiatives.  By 1987, ShoreBank had lent over $75 million in development loans for mortgages and rehabilitation work, and facilitated work on more than 200 buildings, 25 percent of the total. In the process, they had helped create a new wave of local entrepreneurs.

In order to attract the capital the South Shore neighborhood needed, the bank created Development Deposits, and sent out solicitations all over the U.S., appealing to people who wanted to invest their savings for community development, while still earning a competitive rate of return. By this means, with the help of just under 5,000 investors, ShoreBank reversed the normal flow of capital out of a low-income neighborhood, and provided the means to power its regeneration. Later, it created EcoDeposits, which attract investments into the bank’s conservation lending activities.

As the ShoreBank grew, it received requests from people who were interested in community development banking in other regions. In 1988, it launched the Southern Development Bancorporation in Arkansas, focused on job creation, and started a micro-loan service for small firms in Chicago, Arkansas and Michigan that lacked a good credit rating. In 1994, they launched an initiative on the city’s West Side in the Austin neighborhood, providing job-training services for residents in the manufacturing and health care industries as well as management advice and loans to local entrepreneurs to encourage additional development.

In 1995, ShoreBank merged with Indecorp, doubling its size to just over $500 billion dollars. Indecorp was a Chicago bank holding company that included two South Side commercial banks, that at the time was the largest African American-owned financial institution in the U.S.

Today, ShoreBank, with assets of $1.4 billion and more than 500 employees is America’s first and leading community development and environmental banking corporation.   It has invested over $600 million in more than 13,000 businesses across the country.  Headquartered in Chicago, ShoreBank has affiliated nonprofits in Chicago; Cleveland; Detroit; Ilwaco, WA; and Portland OR; business development services in Michigan’s Upper Peninsula and consulting services around the world.

Aims and Objectives
ShoreBank is committed to building vibrant communities by providing financial services and information to create economic equity and a healthy environment.  ShoreBank’s shareholders and employees are committed to the belief that a banking corporation can earn competitive profits by helping its customers build their wealth, invest in their own communities, and create a healthier environment. Its triple bottom line goals are profitability, community development, and conservation. Its logo reflects these goals: “Let’s change the world.”


  1. Community Development

The majority (71%) of ShoreBank’s loans are community development investments in 22 priority urban neighborhoods where the median income and property values are below the regional average. These include loans to minority-owned businesses, non-profits and faith-based organizations, conservation loans, first-time home-buyer grants, and real estate development loans. 60% of the loans in 2003 were for residential real estate, including financing for renovations, and the purchase and rehabilitation of more than 4,200 homes and apartments, bringing the 30-year total to approximately 42,000 units of housing.  Last year, ShoreBank loaned $51 million to businesses in priority communities or to minority-owned businesses, the highest in its history.

The importance of residential rehabilitation in the almanac of community development is that a renovated home restores pride, boosting self-esteem, and instilling confidence among residents and investors in the neighborhood’s future that can be a catalyst for additional development opportunities.   These improvements build a growing sense of community that can lead to the delivery of social services and programs that provide residents with the tools and information to sustain them while preparing for future challenges.   To help accelerate and ensure effective redevelopment efforts ShoreBank’s non-profit organizations provide financial literacy, wealth management and creation programs, assist with job training, retention and placement programs, and offer technical information promoting energy efficient solutions that save homeowners, businesses and organizations money and protect the environment. MetroEdge, a ShoreBank nonprofit, offers businesses, organizations and city agencies access to unique market research to encourage economic and commercial development opportunities in urban neighborhoods. Within Chicago’s South Shore neighborhood, ShoreBank developed a commercial center that attracted 22 shops, and established a small business incubator for other service sectors and light manufacturing companies while providing residents with access to retail amenities typically associated with a healthy and vibrant community.

  2. Conservation

ShoreBank’s conservation loans have helped finance a wide variety of environmentally-oriented businesses, from Cleveland’s Environmental Centre, a commercial green retrofit with ground-source heating, rooftop gardens and solar lighting, to organic dairy farms in Oregon, to home retrofits for water and energy efficiency. In 2003, ShoreBank issued $71 million in conservation loans, five times more than in 2000. The loans have helped transform contaminated and   vacant brownfield sites into new residential and commercial developments that have created new jobs and opportunities and revitalized underserved neighborhoods. In the Pacific Northwest, ShoreBank’s conservation loans have helped EcoTrust, an associated partner, start the slow process of building a conservation economy in areas where traditional resource industries such as logging and fishing are severely threatened.

  3. International

As word of ShoreBank’s good work spread, inquiries began to come in from underdeveloped countries from around the world. To service the need, ShoreBank Advisory Services (SAS) was established. SAS consultants have worked in more than 40 countries, and throughout the USA, focusing primarily on micro-enterprises and micro-finance endeavors. In Guanjuato, Mexico, for instance, SAS manages the Fondo Capital Guanjuato, an $8 million fund capitalized by multilateral donors and private investors to support small and medium sized businesses in the state.

In collaboration with a group of other investors, ShoreBank recently embarked on a major new initiative when it established ShoreCap International. It just raised $23.5 million from multi-national financial institutions to create an investment company to provide equity to banks that finance micro entrepreneurs that build support for struggling economies in Asia, Africa and Central Europe. Its partners ShoreCap International include ABN AMRO, BIO, The Ford Foundation, FMO, FinnFund, the International Finance Corporation, the Gatsby Trust, and the European Investment Bank.  In addition, it established Shorecap Exchange, an affiliated non-profit to provide technical and capacity-building services to the banks it invests in.  ShoreCap expects to offer a 7.1% internal rate of return, and to draw on the growing number of investors who are willing to reduce their expected rate of return in exchange for measurable social returns.  Currently, ShoreCap is growing in a way similar to ShoreBank’s own successful growth.

Over the years, ShoreBank has demonstrated that serving the triple bottom line goals of profitability, community development, and conservation is both realistic and achievable. In the US, it has cumulatively invested $1.7 billion in underserved communities in the U.S.; created, retained, or placed over 10,000 jobs; contributed to the rehabilitation of more than 42,000 units of affordable housing; and it manages $34 million in seven risk capital funds in the U.S. that support small businesses.

In 2003, ShoreBank had $1.4 billion in consolidated assets, and earned $7 million, 5% more than in 2002. In Chicago and Detroit, where most of its community lending business is based, it achieved a net income of $15.4 million, and demonstrated a 16.8% return on equity. Its net loans grew by $108 million, primarily funded by an $83 million increase in Development Deposits and EcoDeposits, and showed a 5-year average ratio of net losses to total loans of only 0.42%.

ShoreBank also strives to improve its performance internally, to “walk its talk.” Its employee benefit plans work to reduce the disparity between higher and lower paid employees, and it is working to increase training and educational opportunities, and to promote from within. ShoreBank reduced its use of paper by 44% from 2000 to 2002; is making energy efficiency upgrades in every building it owns; and is adopting green purchasing policies throughout its affiliates.

Internationally, from 1990 to 2003 it has overseen more than $254 million in lending to small enterprises by 45 banks in nine emerging market countries, at an average charge-off rate of less than 1%. It has helped more than 20 micro-finance   institutions to increase their capacity in countries such as Georgia, Azerbaijan, Northern Ireland, Romania and Bangladesh, and is managing $142 million in invested funds. 

In achieving all this, ShoreBank has provided a bridge between the two divides of private gain and public good. It has demonstrated that it is possible for a for-profit bank to operate in the public benefit, serving community and environmental goals, while satisfying its investors and its customer’s individual goals.

In 2003, for the second year in a row, ShoreBank performed significantly better that its peer banks in $1-$3 billion assets range, none of which is a community development or environmental bank. It was also listed as one of America’s best-performing community banks by the Independent Community Bankers Association, and honored as one of 11 leading supporters and financiers in the world of businesses and non-profits run by women.

For further information contact:
Brian J. Berg
ShoreBank Corporation
7054 S. Jeffery Boulevard
Chicago, IL 60649
Phone: 773-420-4664

Written by Guy Dauncey, Victoria, B.C., Canada