For decades, conversations about creating a more just and sustainable economy have focused on how people spend, invest, or donate their money. Increasingly, attention is turning to another piece of the financial system: banking.
A growing movement of mission-driven financial institutions is challenging traditional assumptions about what banks exist to do and demonstrating how financial services can support community development, environmental sustainability, and long-term economic resilience.
Among them is Beneficial State Bank, a certified B Corp and Community Development Financial Institution (CDFI) founded to advance what it calls “Beneficial Banking” – a model that prioritizes people and planet, alongside profits that are financially sustainable.
As Chief Impact Officer, Terra Neilson helps ensure that mission translates into measurable outcomes. In this conversation, she shares her perspective on the role banks play in shaping communities, the opportunities for businesses and consumers to align their finances with their values, and the growing ecosystem of investors and institutions working to build a more regenerative economy.
People often consider the environmental and social impact of their purchases when it comes to things like food, clothing, and cars, but less so when it comes to where they bank and invest. Why is their choice of bank among the most impactful choices individuals and businesses make?
When you deposit money in a bank, the funds don’t just sit there – they are used to make loans and circulate through the economy. Where you choose to bank determines whether those dollars work for your values or against them.
When you bank at big banks, your hard-earned dollars fund fossil fuels and private prisons. When you bank at a mission-driven bank like Beneficial State Bank, your dollars fund affordable housing projects, small businesses, and environmental initiatives. As of December 2024, U.S. commercial banks held over $24 trillion in total assets. For consumers and businesses alike, where we put those dollars very much matters.
How does the traditional banking structure further sociocultural inequities, and how do impact-minded banks help unravel that history?
The banking industry has a long history of exclusion, redlining, and predatory practices. Too often, the financial industry is extractive – it moves wealth out of communities instead of investing in them.
Mission-aligned community banks like Beneficial State Bank are committed to doing things differently and delivering capital to communities that the mainstream banking industry has overlooked. For instance, we are intentionally combating discrimination in banking through our partnership with Beneficial State Foundation’s Underwriting for Racial Justice Program. We originated $86.8 million in affordable housing loans in 2025 in some of the most expensive cities in the country, and 100% of our lending upheld our community development mandate.
And we actively advocate for regulation and policies that protect consumers and communities, creating a better banking system for all, and we encourage other banks to follow our lead.
Many business owners want their operations to reflect their values, but banking is often overlooked. What prevents more businesses from moving their money to mission-driven financial institutions, and how can they overcome those barriers?
Moving your money is much easier than you might think. Sometimes, momentum can keep consumers or businesses with the same financial institution, but switching banks is simple. Beneficial State Bank has put together guides for both businesses and consumers on how to switch banks.
We also often hear about the “tradeoff myth,” in which people believe that mission-driven banks offer worse financial returns or worse platforms. That’s simply not borne out by the evidence; at banks like Beneficial State Bank, purpose and profit align.
People often don’t think about the role banks play in the broader financial ecosystem. Ethical banks and CDFIs are conduits through which financial resources and investments reach people in communities. Can you talk a bit about your relationship with investors and why impact-minded investors/funds want to work with BSB?
I think of informed deposit placement as the front door to impact investing. Anyone can do it, not just institutional investors.
That said, we also work with many impact investors, both institutional and individual, who want to see their money go back into communities and support mission-aligned work. If you’re investing in a climate fund, but banking with a big bank, you’re limiting the impact of your finances.
We have a proven record of impact and market-rate returns. We also have extensive experience in mission-aligned dealmaking. For instance, if someone wants to invest in affordable housing, we can make those connections and ensure missions and resources are aligned to deliver maximum impact.
Could you share a favorite story about your work with people and communities?
It’s hard to choose a favorite, but one of the accomplishments I’m most proud of is the work our team has done to invest in the preservation of affordable housing. There is an affordable housing crisis, and conversations about solutions often center building more (which is important) but can overlook the importance of preserving affordable housing that already exists. That can mean everything from making roof repairs to cleaning up overgrown landscaping – the types of changes that ensure homes are safe, comfortable, and liveable for years to come.
In 2025, our Affordable Housing Preservation Grant Program awarded $850,000 to 17 property owners, helping preserve 1,271 units. This is not only good for people and communities but also good for the planet, as it reduces the materials needed to maintain housing quality without rebuilding.
One of our investments helped deliver new stoves to residents at Willow Run, a senior community in Snohomish County, Washington, serving residents with very low incomes. The new stoves are energy-efficient, easier to repair, and feature essential safety features for seniors. That’s the type of investment that may not be flashy, but makes a world of difference.
