Sr Magdalene Fogarty is not your average nun. Now living in Kilkenny, Sr Magdalene is responsible for an institution which approved e10m in loans last year and expects to lend nearly e20m this year.
In 1996 Sr Magdalene came up with the idea of social investing. Unlike typical financial investing where you attempt to use your capital to generate more money, social investing is the use of capital to create a social dividend. The result of this revolutionary idea was a charity and social bank - Clann Credo.
“In social investing we talk about a social dividend, improving the quality of life. Improve the quality of life of people and I felt very strongly that that is what our economy should be doing. I didn’t get into religious life for wealth creation, but because I was involved in finance I had to live my religious life through the work I did. I suppose this is partly my personal response to finding a way to do that,” she said.
The most recent recipients of funding from Clann Credo was the Stoneyfrod Development Authority. They were looking to borrow money to refurbish their community centre. Due to the economic collapse traditional banks were unwilling to lend money to the community sector or anyone else. Clann Credo stepped in and provided Stoneyford with money to build a new meeting room, office, new kitchen, wheelchair accessible toilets; storage space for sports equipment and a new reception area.
Sr Magdalene has worked in finance since 1972, when she was put in charge of the finance’s of a number of Presentation Sister congregations. It was a new position at the time “I had to fumble my own way and I think in some ways I just became very familiar with finance,” she said.
While working within the financial world Sr Magdalene became increasingly aware that large sections of society were cut off from finance. She was constantly looking for some way to use her experience to help shoulder the burden of the less fortunate. A second issue that was nagging at Sr Magdalen was the decline in the number of people taking vows. Sr Magdalene felt that the order needed to look at what they were doing fundamentally. “We had an aging population and a declining population so the question was how were we going to continue institutions in that scenario. So that was another reason why for me we needed to look at what we were doing. Everything we were doing suggested we needed to make changes. Traditionally the resources that we would have counted were people, property and funds. We didn’t see ourselves as having an abundance of any of them but we relied upon them to respond to the needs of society.”
The inspiration for Chlann Credo came from a poem that asked what would God do if he had money. “I remember reading a poem all about if God had money what would he do with it and the last two lines were “but God has no money at all, he has given it all to you and me, what do we do with our money?”
“I was thinking about that and asking well what would he do and what do we do and that kind of served for an alternative system and model of finance. That would care for people and look after their needs. It was very important for me that people had the opportunity to develop their full potential. I suppose I believe that people who are given a chance would do that.”
Sr Magdalene took her idea of establishing a social bank to her superiors in the Presentation order. She didn’t expect them to go for the idea. The order created a special research position for three years to allow Sr Magdalene test the idea of social investing. Now 14 years later Chlann Credo has invested over €26 million in 250 community and voluntary groups dotted across Ireland, Eastern Europe (Slovakia and Kosovo) and South Africa. Sr Magdalene describes the growth of the company as unbelievable.
Clann Credo’s success has drawn the attention of the government. They are impressed by the fact that it can finance community and social projects with out the support of central government. Speaking at a launch of a research paper on social investing “from the ground up,” Minister Phil Hogan said that, in a situation where resources are scarce and our population continues to grow, social enterprise and the social economy can play a key role in creating sustainable and socially useful jobs.