posted on: Tuesday, November 16, 2010

By Lisa Ranghelli

In our recent report on the impacts of foundation-supported advocacy and organizing in the Northwest region, we featured the efforts of the Montana Community Foundation and several nonprofits in the state to curb payday lending through a ballot initiative. An article in NCRP’s Fall 2010 Responsive Philanthropy elaborated more on how these Montanans were “Fighting Moneyed Interests with People Power.”

Great news! On Election Day, Montana voters approved the ballot measure to curb exorbitant rates charged by payday lenders to 36 percent interest. As reported by the Center for Responsible Lending (CRL), which provided policy guidance to the coalition, interest rates often reached as high as 400 percent, burying borrowers in a cycle of spiraling debt. After four attempts to get the legislature to address the issue, advocates saw they needed another strategy, and this time they went directly to the voters, who approved the measure overwhelmingly, 72% – 28%.

For Linda Reed, CEO of the Montana Community Foundation, this campaign offers a great model for partnership between private foundations and community foundations collaborating to create impact through policy. Earnings from a Northwest Area Foundation endowment provided seed funding for the campaign. According to CRL, payday loan volume in Montana in 2007 was $47,271,444. Dramatically curbing interest rates and redirecting those profits back into low-wage workers’ pockets—that’s quite a bang for the buck.

Alysha Janotta, executive director of Montana Women Vote, had noted before the election that whenever her group explained the measure to Montanans, they immediately agreed that capping the interest rate was a “no brainer.” Let’s hope the legislature agrees now too.

Do you have a story of overcoming moneyed interests with people power? Share it with us in the comments section below.

Photo from: Microsoft Office clip art

Lisa Ranghelli is director of NCRP’s Grantmaking for Community Impact Project.