In the cutthroat world of finance and investment, where the focus often seems squarely set on quarterly earnings and stock market standings, there are a few remarkable entities notable for their commitment to a different bottom line. BlackRock, the world’s largest asset manager, is undeniably one of these standout organizations.
Founded in 1988 by legendary financial prognosticator and influencer Larry Fink and others, BlackRock specializes in providing institutional clients with asset management services that emphasizes the long-haul (in other words, risk management).
As a fiduciary to investors and a leading provider of financial technology, BlackRock helps millions of people build savings that serve them throughout their lives by making investing easier and more affordable.
Since its IPO in 1999, BlackRock has been the highest-performing financial services stock in the S&P 500, delivering a total return of 7,700 percent.
But what sets BlackRock apart isn’t only its sheer size or record returns; it’s the dedication to a broader mission that goes beyond profits. You’ll find it clearly amid that purpose statement above: to help people build savings.
BlackRock fundamentally believes — and regularly proves — that doing well financially and doing good in the world are not mutually exclusive. From the beginning BlackRock’s been committed to sustainability through environmental, social, and governance (ESG) principles. And it believes in, and continually demonstrates the principle of “in a rising tide, all boats rise;” with a mission to “help more and more people experience financial well-being. Which is a long-term proposition, not necessarily dependent on the moment-to-moment vagaries of the stock ticker.
Building a safety net for financial well-being
Rather than point to Blackrock’s gargantuan assets under management for mega-companies such as Microsoft and MetLife, Claire Chamberlain, Managing Director and Global Head of Social Impact at BlackRock, focuses on financial resilience for all Americans. Chamberlain oversees grant making and engagement programs for the fund, and serves as an officer of The BlackRock Foundation.
Chamberlain’s Social Impact Team directs the firm’s global philanthropic initiatives to help address the critical social challenges often top of mind in Fink’s annual letters to investors and shareholders. She’s especially focused on the economic mobility and financial resiliency of vulnerable communities. Her team partners with nonprofits, research organizations, start-ups, employers, and employees to fund and build solutions that create more inclusive and sustainable economies.
The lack of financial stability for the average Joe and Jane is a pressing issue for Chamberlain and her team. “Something like 51 percent of American households don’t earn in excess of their expenses.” The stark reality is that individuals and families are forced to figure out how to build their own safety nets, she says, a task that often proves challenging, to say the least, without scant help from the State.
To address this critical issue, in 2018, BlackRock’s Social Impact team created its Emergency Savings Initiative (ESI). The ESI creates custom solutions for employers and financial services institutions of all sizes to make access to savings easier for 10+ million Americans, addressing the critical gap in the US savings system.
Over the past four years, BlackRock and its ESI partners have provided $30 million in philanthropic support to financial health non-profits to help build various emergency savings initiatives.
With those funds, the ESI program initially focused on upskilling and re-skilling individuals to break down barriers, allowing them to move toward better paying career trajectories, says Chamberlain. However, the team and partners soon realized that concentrating on income alone wouldn’t suffice — to enable people to meet their day-to-day financial challenges effectively, she says, it would have to shift its focus to helping individuals and families build “accessible, liquid savings.”
“[ESI programs get] people started on that upward journey with the hopes that, over time, they’re able to build for themselves, build for opportunities for their families,” says Chamberlain. “I’m a mother. I have three sons who are now young adults and I understand firsthand, as well as intellectually, the importance of … believing in a better financial future state for people.”
What’s the ideal way to tackle a global conundrum as big and thorny as universally increasing savings? The answer, for BlackRock, is large-scale collaboration with like-minded organizations already on the ground.
The power of purposeful partnerships
Commonwealth, a nonprofit dedicated to building financial security and opportunity for financially vulnerable individuals, shares Chamberlain’s mission to help people build financial security for themselves and their families’ future.
Commonwealth collaborates with people living on lower incomes, employers, innovators, the financial services industry, fintechs, recordkeepers, payroll providers, gig platforms, policymakers, and other nonprofits.
As a founding expert and leading partner in BlackRock’s ESI since 2019, Commonwealth has developed deep partnerships with leading companies, focusing on piloting real-world solutions to employee savings. In addition to working with ESI partners and grantees, it conducts research and advances public policies related to emergency savings. It shares BlackRock’s goal to improve financial security and emergency savings for people living on low and moderate incomes in the US.
Timothy Flacke, co-founder and executive director of Commonwealth, says that the success of his organization’s collaboration with BlackRock stems from a sincere interest in communicating back and forth with each other and with all their grantees. Of ESI, he says, “We built this thing together, and that is what you want. Obviously, that makes for a good relationship, but we have also had the benefit and the perspective of the world’s largest asset manager, a very sophisticated, widely respected firm that’s well run, so that has helped inform our work.”
With a challenge as gigantic as helping all Americans build savings for inevitable emergencies, the partnership thrives on a commitment to tackle substantial issues by taking them on one small step after another, says Flacke. The partners decided to “pick something actionable within that large issue and say, ‘If we can move this thing, we will change the conversation about the larger problem.’
“That was where we came together and [BlackRock], I think, wisely decided that the strategy to do that was to find a small number of qualified partners and build a deep relationship where we could do some really difficult and long-term work,” says Flacke. “As opposed to the temptation, I think, to cut the pie into a bunch of small pieces and hand that out in lots of different places. But there, you lack the power then to go deep.”
What does “qualified partners” mean? Chamberlain says that BlackRock is comfortable taking some risks with its philanthropic grant-making. “We’re comfortable backing relatively new organizations because we evaluate their theory of change, we’ve evaluated their leadership. We look at their governance, and so we feel comfortable taking a bet.” But, of course, it’s also comfortable partnering with more established organizations such as Commonwealth and the other partners in the ESI, she says.
Beyond bucks: unlocking opportunities, providing tools, & resetting expectations
As Flacke points out, Commonwealth’s collaboration with BlackRock extends beyond mere funding. It is in the “influence business,” he says, seeking to catalyze change by getting other actors to act on their ideas about emergency savings. “Research shows that when people have the right tools and opportunities, they are better able to set aside money for the future,” says Flacke.
BlackRock’s Social Impact team and its nonprofit organizations beyond Commonwealth — Common Cents Lab and the Financial Health Network, partnered with more than 40 employers and financial institutions including AutoNation, Best Buy, Levi’s, MasterCard, and Voya Financial, among others to build custom and flexible solutions to help millions of employees to access savings at an unprecedented scale.
Chamberlain explains that the ESI fund sought out organizations that could find mutual benefits in their collaboration. For instance, its partnership with ADP, the largest payroll company in the US, helped enhance its app with easily accessible emergency savings features. This collaboration has resulted in a massive $2 billion so far in savings for users — all from that initial $30 million in philanthropic infusion.
In five years, the ESI partners hope to see a society where financial anxiety is no longer a pervasive issue, and where financial well-being is attainable for all. Their shared commitment to this mission, grounded in purpose and collaboration, is a testament to what can be achieved when finance serves the greater good.
Says Chamberlain, “It’s not profit or good, profit or purpose. These two things can very much work together and in fact, be multipliers.”
If you’d like to dive deeper with more purpose-led companies like BlackRock & Commonwealth, check out the Lead with We podcast here, so that you too can build a company that transforms consumer behavior and our future.