Review: Building Wealth

Building Wealth: The New Asset-Based Approach to Solving Social and Economic Problems

Building Wealth: The New Asset-based Approach to Solving Social and Economic Problems

Edited by the Democracy Collaborative at the University of Maryland

210 pages, Aspen, Colo.: The Aspen Institute, 2005

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Building Wealth:
The New Asset-Based Approach to Solving Social and Economic Problems
Edited by the Democracy Collaborative at the University of Maryland
210 pages (Aspen, Colo.: The Aspen Institute, 2005)

The Democracy Collaborative’s useful primer examines the reach and impact of individual, community, and government wealth-building initiatives to promote social and economic justice. In only 121 pages (plus an expansive and excellent bibliography), senior research associate Steve Dubb, the principal author, and his colleagues offer a succinct and dispassionate definition of each of several asset-based strategies.

Among the strategies described in the book are individual development accounts, which match the savings of low-income people with philanthropic or government funds. There are also an unidentified number of “social enterprises” that make money and pursue social missions. Add to that community- development corporations that revitalize urban and rural communities by producing affordable housing as well as commercial and industrial space. And community-development financial institutions – including community-development banks, credit unions, loan funds, and venture capital funds – that support underserved minority communities.

The Democracy Collaborative’s cogent, albeit cursory, treatment of these and other complex development catalysts should be commended for calling policymakers’ attention to untapped opportunities to create and protect jobs, and to help fund community services. Yet the book’s subtitle, The New Asset-Based Approach to Solving Social and Economic Problems, overpromises. The authors’ views are not innovative, nor do they present a cohesive strategy to redress social wrongs or achieve economic justice.

Mr. Dubb and company acknowledge, in a thoughtful epilogue, that there is more work to be done. For starters, I suggest two areas for their further consideration. The first is one of objective: Building Wealth is almost entirely a descriptive recounting, rarely offering any advice or counsel. If the authors want to promote social and economic change, they should prescribe what needs to be done and by whom.

Which brings me to the second suggestion. The authors astutely point out that diverse decision makers – some encouraging income growth, others savings, and still others direct human services or job creation – can pluralistically drive positive change. The players they neglect, however, share the greatest capacity for effective empowerment. These are the individual and institutional investors who promote change either by investing only in companies that demonstrate exemplary social responsibility, or by prodding social laggards to do better.

The Social Investment Forum, a nonprofit research and educational organization, recently reported that more than $440 billion is invested in portfolios whose professional managers employ social screening or shareholder engagement strategies. And my empirical research demonstrates that the common stock of those companies that earn the highest marks for social justice and environmental concerns tends to outperform that of their peers. The Democracy Collaborative should embrace values- based investing as a tool to effect positive social change in corporate boardrooms and, ultimately, in society at large.


Marc J. Lane is a Chicago attorney, president of Marc J. Lane Investment Management Inc., and an adjunct professor at Northwestern University School of Law. He is the author of Profitable Socially Responsible Investing: An Institutional Investor’s Guide (Institutional Investor Guides, 2005).

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