January 2020

Barron’s: Tiedemann Advisors to Offer an Impact-Investing Cash Solution

by Fang Block | Updated Jan. 15, 2020 6:13 pm ET

Tiedemann Advisors is offering a new program to help clients put their cash to work in impact investment, the New York-based independent investment and wealth advisors announced on Wednesday.

This program, called FICA (short for Federally Insured Cash Account) Impact, will allow investors to invest in more than 700 community banks across the U.S.. The banks will use the funds to give loans and support community reinvestment programs to create jobs, build infrastructure and schools, and expand social programs, according to Brad Harrison, managing director at Tiedemann.

“Cash has traditionally been held at large financial institutions, which don’t necessarily have socially responsible lending criteria that align to core values of our clients ,” he says.

For one, the Russell Family Foundation has held cash in large banks over the years for grantmaking and opportunistic investing. The foundation, established by Jane and George Russell in 1999 to support sustainable community organizations, has worked with Tiedemann to explore impact investing cash solution.

“Since cash has always been a smaller allocation for us, it’s been an easily overlooked asset class in terms of how we could put impact investments to work,” says Kathleen Simpson, CFO and interim CEO of the foundation.

The cash solution is enabled through StoneCastle Cash Management, LLC, a financial technology company.

“The real advancement of financial technology enables us to allocate cash to this network of 700 different community banks to unlock impact opportunities in communities nationwide,” Harrison says.

What’s interesting, he says, is that FICA Impact has similar yields and liquidity as money market accounts at large financial institutions.

In accordance with FDIC regulation, cash deposited through FICA Impact is limited to no more than $250,000 per tax ID per bank, he says.

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