In November 2004, as presidential hopeful John Kerry conceded the presidential race to George W. Bush, husband and wife team and Democratic supporters Tom Steyer (MBA '83) and Kat Taylor (JD/MBA '86) found themselves at an impasse in their political endeavors. The lost presidential bid was not only disappointing but left the couple seeking out new avenues to benefit from their time, passion, and energy. For Taylor, the idea of a beneficial bank was not new | in fact, the notion of starting a bank to help underserved communities had been suggested to her almost 20 years earlier when Taylor sought career advice from then-economic advisor to Governor Jerry Brown of California, Michael Kieschnick. At the time, the idea seemed implausible but now, with their newly unleashed resources, the idea of community banking as a leverage point in both communities and the overall financial system seemed almost compulsory. Specifically, they wanted to create a triple bottom-line bank that produced social justice and environmental well-being while also being economically sustainable not just in the community but across the financial system. Still, determining how best to structure the organization in order to ensure the fulfillment of its intended benefits presented a significant challenge to the couple. This case describes the founding vision and organizational structure for a triple bottom-line bank. It covers governance issues, regulatory considerations including Dodd-Frank, a discussion of the bank's business model including competitive strategy and the importance of human capital, and measures of impact. Also see SI134B: Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors.
