Jeremy Nowak: Money Organizer

by Bruce Schimmel

Jeremy Nowak wants to reorganize the way you think about money. Your money.

Head of the Center City-based The Reinvestment Fund (TRF), Nowak is known to his staff as the "Director of the Big Picture." And the vision that Nowak is creating for the Delaware Valley is filled with affordable housing, innovative charter schools and burgeoning, locally owned businesses.

Defying both Shakespeare's and Franklin's advice, Nowak is both a borrower and a lender. Soft-spoken, Nowak carries a big portfolio. The Reinvestment Fund has sunk nearly $200 million in all kinds of projects that promise to do good if they do well.

As Nowak explains it, TRF is neither a investment bank nor a charitable institution. It straddles both worlds, with one foot embedded in the commercial capital marketplace and the other planted in the grassroots of social activism.

That's a hard concept to grasp, says Nowak. People think of investing their money to get the best return. Or they think of donating their money to make a better world.

For most, their capital is used either for profit or for charity but rarely for both.

But the twain do meet for the nearly thousand investors that Nowak has attracted over the last 17 years. Investors range from major banking and insurance institutions, hospitals and universities to individuals with as little as $1,000 to spare.

The financial return for someone with $1,000 to lend is between 2 and 3 percent -- lower than elsewhere. But, says Nowak, the Fund's write off for bad debt is also extraordinarily low, less than 1 percent.

Nowak says his sophisticated investment concepts were founded in part on a simple notion of a financial community expressed by George Bailey in It's a Wonderful Life. Borrow money from people who care about a place and lend it to those who'll invest their lives there.

It's a distinctly middle-class vision because we very much need a thriving middle class, says Nowak. "Democracy can't survive without a middle class -- that's for damn sure."

As a former social activist, Nowak says he learned to organize people. But then he realized he could achieve even greater change by organizing money and putting it "in the hands of organized people."

"You will get the right financial benefits" if you retool your thinking about money, says Jeremy Nowak, "and you will help make a community you'll be proud to live in."

Jimmy Stewart couldn't have put it better.

Hear Jeremy Nowak talk about his past and the future of social investing by downloading: www.schimmel.com/nowak_jeremy.mp3