The local news outlet Gothamist recently ran an article about the push to charter a public bank in New York City—part of a larger campaign that appears to be gaining traction in some American cities. It is a good illustration of how contemporary left-wing public policy organizing is often conducted: bringing together Big Philanthropy, multi-issue coalitions of activist nonprofits, and legislative politics.
A “Public Bank”
The basic idea being put forth is that New York City should charter a public municipal bank for itself, to be owned by the city, wherein it could deposit the billions of dollars that are typically on the city’s balance sheet at any given time. This money is currently held at several private-sector financial institutions, chiefly JPMorgan Chase, Bank of America, and Citibank.
Public bank advocates argue that these pillars of American finance function only to “exploit and extract wealth” from ordinary people through bankrolling certain “destructive corporate interests” such as the oil and gas industry, real estate developers, illegal immigration detention and private prison contractors, and arms manufacturers. Activists contend that a public bank should be structured with “a clear mission to advance racial, economic, and environmental justice” and that its capital should be deployed toward those ends. Left-of-center environmental, social, and governance (ESG)-type outcomes would be an explicit purpose of such a bank, essentially making it a publicly funded version of the labor union–aligned Amalgamated Bank.
Enabling legislation—the New York Public Banking Act—has yet to pass the state legislature, and this has naturally been a key focus for activists. Other states (such as California) have already passed such legislation, and in June the Los Angeles City Council voted to formally explore creating its own public bank, despite voters having rejected the idea in 2018. San Francisco, Oakland, and Philadelphia are also currently considering public banks.
Critics make a variety of arguments against the idea, including that public banks are subject to inherent risks that would jeopardize taxpayer money—one being their intrinsic susceptibility to politically influenced decision-making. The Los Angeles Times editorial board pointed to studies that “have repeatedly found that a public bank would be too expensive for government agencies and too risky for taxpayers, while also delivering questionable value to the community.” Ordinary Americans unfamiliar with the intricacies of banking might arrive at the same conclusion simply by subjecting the panacea-like benefits touted by public banking advocates to the “if it sounds too good to be true…” standard.
A Typical Campaign
Leaving arguments on the real-world feasibility of public banks to those qualified to speak on such things, it is nevertheless revealing to observe that the activists who argue for their establishment appear more concerned with funding left-wing sociopolitical priorities than with the actual mechanics of municipal banking. Indeed, the New York public bank campaign bears the usual hallmarks of contemporary liberal-left public policy activism: Big Philanthropy funds a multi-issue coalition of activist groups, who campaign in favor of a rather radical proposal that is fundamentally rooted in political/legislative objectives.
The primary coalition pushing for a public bank in New York City is the aptly named Public Bank NYC, which is itself comprised of more than 50 groups representing a typical cross-section of left-progressive interests: climate change and the environment, immigration, organized labor, anti-police/prison, socialist economics, and organizations that synthesize these and other issues into broad-spectrum advocacy. Some of the more prominent members of Public Bank NYC include Food and Water Watch, Action Center on Race & the Economy, the New York Public Interest Research Group (NYPIRG), the New York City chapters of the Sunrise Movement and the Democratic Socialists of America, and regional districts of the Communications Workers of America and the United Auto Workers.
Public Bank NYC has a steering committee that includes the 501(c)(3) nonprofit Chhaya Community Development Corporation and the 501(c)(4) New York Communities for Change, but it is officially run by a 501(c)(3) called the New Economy Project. The New Economy Project has the characteristically all-encompassing mission of “build[ing] an economy that works for all, based on cooperation, equity, social and racial justice, and ecological sustainability.” Its total revenue in its 2021–2022 fiscal year was just over $2.5 million, and it receives funding from the offices of local elected officials and a variety of foundations and nonprofits. Some larger funders have included Enterprise Community Partners, the Marty & Dorothy Silverman Foundation, and the Robin Hood Foundation. From 2020 through 2021, the New York City–based Scherman Foundation gave $184,000 specifically earmarked for Public Bank NYC, plus another $50,000 for general support.
The Ford Foundation appears to be among the New Economy Project’s most important funders, having provided a total of $4,375,000 since 2006. Of that, $625,000 (from 2021 through 2023) was designated as support for the public bank campaign. It is hard to ignore the irony of Ford funding a campaign to divest from allegedly “predatory” private-sector banks that seek only “to enrich their shareholders and executives,” while parking billions of dollars from its endowment in opaque “private equity” holdings and paying its chief investment officer an annual salary in excess of $3.7 million.
Ford also funded a recently released academic study at the New School’s Center for New York City Affairs, which sought to quantify various positive impacts that would purportedly be realized through establishing a public bank. New Economy Project staff were involved in the study, which was based in part on the public banking model envisioned by Public Bank NYC. That study’s release was what prompted the Gothamist to cover the public bank campaign in New York and elsewhere, including associated legislation.
Philanthropic Politics
Americans underestimate the role 501(c)(3) nonprofits and philanthropic foundations play in political outcomes—national, state, and local—even without running afoul of legal restrictions on direct electoral activities. This is probably because a campaign to establish a public bank to fund left-of-center policy priorities isn’t the sort of thing that jumps to mind when people hear the words “charity” or “philanthropy.” In doing so, they miss the multi-billion-dollar (and largely left-leaning) reality of political issue activism in the United States.
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