MetLife Puts Higher Stake in Local Economies.Since 1984, New York-based Metropolitan Life Insurance Co. has made more than $170 million in loans, guarantees and equity investments, using its Social Investment Program to support community ventures that do not meet customary investor criteria. The program has financed health services health services Managed care The benefits covered under a health contract , land preservation, the arts and affordable housing. It also has financed business development, but the company had prohibited pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. community-development corporations and other recipients from devoting more than 10% of a MetLife contribution to commercial ventures for neighborhood economic development. That is changing. MetLife now plans to allow community-development groups to spend up to 20% of a contribution on business development. MetLife executives say it's a change that will benefit its recipients, their communities--and the company. Although commercial ventures can generate more of a return, MetLife had placed the 10% restrictions because it was more interested in providing quality-of-life improvements than financing often-risky business investments, company executives said. After all, the Social Investment Program was not designed to maximize profits. MetLife's return for such deals was primarily the goodwill value of establishing the company's reputation as a good corporate citizen. "The benefit is not direct," said Dennis White, director of social programs for MetLife, "and we're not seeking big profits because we're trying to make a difference. But it helps the company's image. We raise our profile with nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive. Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. leaders and with government and other businesses." Better-Than-Expected Returns MetLife is confident about expanding its commitment to community business development in part because its social investments to date have generated better-than-expected returns. For example, MetLife had invested ample sums through the National Community Development Initiative--funds dedicated to organizations such as the Local Initiative Support Corp. and the Enterprise Foundation. Those investments yielded a return of 5%. MetLife's social-investment record has been broad. For example, the company recently made a $3 million loan to the Community Reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. Fund, a private nonprofit organization Nonprofit Organization An association that is given tax-free status. Donations to a non-profit organization are often tax deductible as well. Notes: Examples of non-profit organizations are charities, hospitals and schools. that purchases loans from development groups. The fund sells those in the form of bonds. The company has invested some of its social-program money in its own back yard. For example, it provided $7.5 million to the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of City-based Common Ground Community Housing Finance Development Corp. over the past four years. The group restored the Times Square Hotel, rebuilding a 600-unit structure. From that base, Common Ground provides housing, medical services, counseling and job training. MetLife also helped finance the restoration of the Prince George Prince George, city (1991 pop. 69,653), central British Columbia, Canada, at the confluence of the Fraser and Nechako rivers. It is a railroad division point and a distribution center for a lumber region. Hotel, located near its headquarters. A $5 million loan created 416 efficiency apartments for the homeless, people with AIDS The People With AIDS (PWA) Self-Empowerment Movement was a movement of those diagnosed with AIDS and grew out of San Francisco. The PWA Self-Empowerment Movement believes that those diagnosed as having AIDS should "take charge of their own life, illness, and care, and to minimize and low-income working people. Common Ground also will provide counseling and medical services at the site. The company also purchased $2 million in mortgage notes from Habitat for Humanity Habitat for Humanity, nonprofit ecumenical Christian organization that enables low-income people to own affordable, livable housing. Headquartered in Americus, Ga., it was founded in 1976 by businessman Millard Fuller and his wife. to help the organization build additional affordable housing, and it is placing $5 million in a limited partnership that invests in affordable housing developed by nonprofit community-development corporations nationwide. Win-Win Relationships "What we're seeing throughout the nation are examples of companies joining with often underserved communities to forge forge Open furnace for heating metal ore and metal for working and forming, or a workshop containing forge hearths and related equipment. From earliest times, smiths (see smithing) heated iron in forges and formed it by hammering on an anvil. strong win-win working relationships," said Michele Kahane, a program officer in the Economic Development unit of the New York City-based Ford Foundation. Kahane is overseeing implementation of the Foundation's Corporate Involvement Initiative, which is designed to promote profitable corporate investment in low-income communities. "Community investment is making it possible for companies to develop new markets and increase revenues, all while helping build wealth where it previously did not exist," she said. MetLife has reaped more than the below-market interest rates it charges for such investments. The company vies for corporate contracts as well as individual policies with other life insurance giants, and its reputation is a competitive factor. MetLife's contributions sometimes generate news coverage. Nonprofits also cite MetLife's involvement when publicizing pub·li·cize tr.v. pub·li·cized, pub·li·ciz·ing, pub·li·ciz·es To give publicity to. Noun 1. publicizing - the business of drawing public attention to goods and services advertising successful projects. The newly announced expanded commitment to business development reflects a shift in focus on the part of the nonprofits with which MetLife has been working. MetLife helped fund projects that created supermarkets and retail jobs in some underserved inner-city communities. It was the success of such projects that prompted the insurance company to allow community-development corporations to spend more on business development. "Nonprofits have already proved themselves in housing," White said. "It's not much of a risk to give them a chance to continue to succeed in economic development." George White George White may refer to:
|
|
||||||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion