There are many ways to meet your 1% in Community goal.
Of course, how much that 1% is will vary widely from one person to the
next. The recommendations below provide suggestions as to how you, or
an institution you belong to, might start out investing in communities.
Remember to do your research and consult your financial planner to ensure
that your investments match your social and financial goals.
FOR ALL INVESTORS:
Everyone can have a checking or savings account at a community development
bank or credit union. You can get all the benefits of these insured
accounts, while knowing your money is building healthy communities.
INVESTMENTS OF $1,000 TO $5,000:
If you are looking to invest a thousand or so, community development
banks and credit unions offer competitive rates for money market accounts
and CDs. Investments into pooled community investment products—available
Calvert Foundation and others—are also available at these levels
and allow you to target the region of your investment
INVESTMENTS OF $5,000 TO $50,000:
At these levels, you might want to go beyond banking. Look into the
high-impact options, and consider spreading your resources across more
than one option. For example, you might place $5,000 with a domestic
or international loan fund and $10,000 with a community development
bank in CDs, money markets, or savings accounts. By investing through
a pooled community investment product, you can diversify the organizations
and communities you reach with a single investment. If you’re
seeking to invest in a retirement account, check out community development
banks and credit unions that offer retirement accounts, such as Self-Help
and ShoreBank .
INVESTMENTS OF $50,000 TO
In this range, investors can have significant community impact. You
can choose to put money into one or a few organizations, taking advantage
of the federal insurance at community development banks and credit unions
for up to $100,000. You may also want to investigate high-impact options
that go beyond banking, like loan funds and venture capital funds. Pooled
community investment products continue to be an attractive option, given
their built-in diversification and security enhancements. You could
invest in anywhere from two to ten organizations. For example, one local
foundation with $200,000 to invest placed $25,000 in three community
development banks, $50,000 in their local community investment institution,
and the remainder in a pooled product.
INVESTMENTS OF $250,000 TO
At these higher levels, investors usually combine some federally insured
certificates of deposit with placements into two or more community investment
institutions with high-impact vehicles . Pooled community investment
products, such as those offered by the National Community Capital Association,
offer an attractive alternative as they incorporate diversification
across organizations, portfolio supervision, and professional asset
management. At this scale, targeting by organization or region is generally
available. For those seeking fully federally insured options, National
Federation of Community Development Credit Unions and Calvert Foundation
are prepared to manage a
portfolio of CDs invested in 10 to 20 different community development
banks and credit unions.
Investors at this level may be eligible for the New Market Tax Credit.
See p. 17 for more details.
—Shari Berenbach is executive director of
the Calvert Foundation, a nonprofit affiliated with Calvert Group, Ltd.
; they are separate legal entities.To find community investing vehicles
that mesh with your financial goals and values, see the resource section,
starting on p. 19. This resource section also includes socially responsible
financial advisers who can help you explore community investing, if
Impact of 1% in Community on a $100,000 Portfolio
If you invest $100,000 at5% interest ...
… the return on yourinvestment for oneyear
would be $5,000.
If you invest $99,000 at 5% interestand put
the remaining 1% ($1,000)into a community investmentvehicle that
earns 3% interest ...
… at the end of oneyear, you’d
earn$4,980 in interest.
Shifting 1% of your invested assets
into community investing will have costyou just $20 in interest,
but it will have made $1000 available for buildinghousing, jobs,
and social services in communities that need them most.