How T. Rowe Price brought capital to under-resourced communities and ensured it had the desired impacts, while inspiring pride and creativity among corporate associates.
When T. Rowe Price’s Black Leadership
Council advocated for a social-impact investing program, we were both
cautious and confident — cautious, because it was the first initiative of its
kind in the investment-management industry and we knew other companies had
struggled with getting social-impact money exactly where they wanted it to go;
confident, because our thorough research and diligence process yielded support
from internal stakeholders along with a mission-aligned partner that mitigated
The Black Leadership Council, formed in 2020 to advise T. Rowe Price’s
Management Committee and support engagement with Black/African American
associates, began looking in 2021 at ways to leverage the firm’s
investment-management expertise and business operations to strengthen
communities. We saw the lack of access to capital for marginalized groups and
and believed an initiative addressing that problem would be a meaningful action
in support of T. Rowe’s focus on access and opportunity.
The questions were largely around how to do it:
How would we structure the capital investment?
Decoding effective methods of driving consumer behavior change
Join us for a transformational experience at SB Brand-Led Culture Change — May 8-10 in Minneapolis. This event brings together hundreds of brand leaders eager to delve into radical lifestyle shifts and sustainable consumer behavior change at scale. The trends driving cultural acceleration are already underway, and you can be at the forefront of this transformative movement.
Where would the money sit and live?
How would it get deployed?
What would happen for the individuals who ultimately received the funding?
What would happen if they didn’t deliver on their business? And what would
the impact of that be?
The answers we turned up led to a commitment to deploy $50 million from the T.
Rowe Price balance sheet to under-resourced community financial institutions
through a partnership with CNote. A year-plus into
the deployment, we’re seeing benefits for
as well as the organization and have insights to share with others who are new
to social-impact investing.
Finding the right path and partner: Scale, mission and security
For any company, $50 million is a lot of money; and this was a new investment
venture for us. Consequently, the Black Leadership Council spent significant
time on research to understand the landscape, evaluate alternatives and refine
We started with a broad exploration of how our firm could support
underrepresented communities through an investment of
This involved assessing a number of options for social-impact investing,
including direct investments in businesses. We concluded that we could achieve
the greatest impact by partnering with an organization that could make
investments nationally at scale, shared our mission, and was able to place funds
according to our targeted impact themes and regions.
We engaged the firm’s finance and treasury experts to get a sense of our
and the implications of investing in this way. We also brought in counsel to
understand the legal aspects. After evaluating the options against our
requirements, we decided to partner with CNote — a women-led technology
that channels corporate cash into insured deposit products at impact-driven
community financial institutions (CFIs).
Tracking results: Community and business impact
Part of what made us comfortable with CNote was the rich diligence the company
does to screen the CFIs it works with and its focus on institutions that support
small businesses, affordable housing, climate action and other economic drivers
in low-income communities and communities of color. The results to date prove
the value of these efforts. T. Rowe Price deposits are doing what we hoped they
would: funding greater access to opportunity and building community resilience.
As of September 30th, 2023, T. Rowe Price funds have been deposited in 69 CFIs:
43 community development financial institutions (CDFIs), 28 minority depository
institutions (MDIs), and 45 low-income-designated credit unions (LIDs). These
institutions disbursed 55 percent of their loans in low- to moderate-income
communities — with 44 percent of borrowers identifying as Black, Indigenous and
people of color. In addition to funding loans to small businesses, T. Rowe
Price’s deposits helped support $1.2 billion in home loans and
Our social-impact investments have not only delivered tangible results; they’ve
also enhanced goodwill in the communities we support and created a sense of
pride among associates about how the firm is investing in communities. They have
also opened a broader window of possibility: Through this initiative and others,
the Black Leadership Council has had a significant impact on the firm in a
relatively short period of time. And that success is inspiring other T. Rowe
Price business groups to think differently and more creatively about ways we as
a firm can lean into access and opportunity.
Lessons learned: Engagement and integration
Engage early with key internal stakeholders. Engaging key stakeholders early
in the process drives awareness and commitment and ensures that you are
addressing the right issues. T. Rowe Price’s Black Leadership Council comprises
employees across different business units. Our employees knew how to engage
legal and finance leaders in the conversation and connect the recommendation
back to business priorities — because of this collaborative work, we were able
to make a strong, fully supported recommendation to the firm’s CEO and CFO. That
said, the group worked internally first and then brought in cross-functional
partners. If we had engaged them a bit earlier, we probably would have asked
different questions and been able to increase the pace.
Be thoughtful about internal messaging. Consider how to position
social-impact investment inside the organization so that it won’t be
misunderstood as philanthropy. This is not grantmaking; this is money the
company receives back, with interest. It’s crucial that stakeholders understand
this, especially in a down or volatile market.
Ask your provider to connect you with peer organizations. We talked to peers
that had made social-impact investments to understand their experience: what
worked, what didn’t and what they wished they had known. We also took questions
to CNote and got access to companies that had partnered with them in the past,
which helped us understand how we might navigate some of those seemingly tough
Integrate impact into your usual investment-evaluation process.
Social-impact investments are investments; so our finance team applied the
usual security, rigor, liquidity and yield considerations. The impact you’re
trying to achieve adds another variable, however — and that can change the
weight you allocate to each component.
Connect social-impact investing to your company’s business priorities. This
kind of investment can drive your business in a meaningful way; so it’s worth
exploring the potential effects from a comprehensive perspective: external and
internal, present and future. Think about how your initiative can attract the
next generation of employees and clients, make your business a valuable
community member, and increase brand connection.
T. Rowe Price is still in the early stages of social-impact investing, but we
are on track to meet our goals and already we are seeing broad benefits — not
least from the work we did in forging a path to get here.