The head of JPMorgan's $350 million philanthropic arm explains the challenges of investing in cities when Americans are increasingly wary of corporate influence
- JPMorgan Chase's head of corporate responsibility, Peter Scher, is one of Business Insider's 100 People Transforming Business.
- Scher's team is on track to spend $350 million this year, up $100 million over last year.
- Its investments are built on unusually deep partnerships with local political and business leaders, and include the five-year, $500 million AdvancingCities initiative and a three-year $350 million skills training program.
- This article is part of our ongoing series on Better Capitalism.
- See the full list of the 100 people transforming business here.
Virtually every major corporation has a philanthropic arm, but JPMorgan Chase's has evolved into one that rivals major foundations in its size and scope.
Peter Scher has been the bank's head of corporate responsibility for the past 11 years, and he's one of Business Insider's 100 People Transforming Business.Scher's team is on track to spend $350 million this year, up $100 million from 2018. Its aim is to reach $1.75 billion by the end of 2023. These investments include the five-year, $500 million AdvancingCities initiative to boost opportunity in underserved city neighborhoods and a three-year, $350 million skills training plan.
"You look around the world and these societal fractures are not getting better and these problems don't age well with time," Scher told us. "I think there's also a recognition from the business community that we have to get into the game in a much more assertive and impactful way, that we can't just leave it to government and the nonprofit sector to do these things."
To pull this off, he's had his team develop what community leaders in the bank's markets are already working on, rather than swooping in with mandates.
Scher previously worked in President Bill Clinton's administration and as a lawyer in Washington, DC, before JPM CEO Jamie Dimon recruited him during the financial crisis to run an emboldened corporate responsibility team. The key turning point for Scher's team was in 2013, when the bank launched both the New Skills program and investments in Detroit after it declared bankruptcy. Both would set the pace for the rest of Scher's work.
"We have really tried very hard over the last five years to look for models that can really, at a system level, connect the businesses where you're going to have most of the hiring with the trainers," he said.
Dimon also had Scher draw talent from throughout the company to spend weeks at a time helping form partnerships on the ground in Detroit, working with Mayor Mike Duggan and local entrepreneurs. It provided a blueprint for both the AdvancingCities plan and the Entrepreneurs of Color program.With an increased presence in cities (primarily in the United States, but also in Europe and Asia) comes increased influence on local politics and the direction of these regions. And as it was shown when Amazon pulled its HQ2 from New York City after New York politicians and activists pushed back against the company's presence, Americans aren't always on board with a big company coming in to "help out."
Scher said he recognizes this, and does not want his team going in there with the mentality of, "Hey, we're here from Wall Street. We're going to fix all your problems," especially, as he said, "Because a lot of these people think we're the ones who created most of the problems anyway." The way to do avoid that, he said, is by going to places where they're actually wanted and building long-term relationships on the ground, accelerating change that's already happening and lobbying for policies that it considers beneficial to small-business owners and residents who need access to skills training.
Key to this new approach to corporate responsibility is linking its goals with those of the entire company. "I think there's also recognition that we see that we want to grow our business in these places and, ultimately, if we're going to grow the economy of a France or Michigan or the greater Washington region, you can't have all these economic hurdles holding people back," Scher said.