Every day brings news of human struggle and environmental crisis. Reports of wildfires, dying lakes, children without access to education, and tent cities of the working homeless spur the urge to help—but the problems are complex and often thousands of miles away. This combination can leave us feeling powerless.
Yet for many of the most challenging problems we face, there are proven solutions that we can support in a tangible way. Investors in Calvert Impact Capital (CIC) are making a difference in these situations and more by putting their money to work in community investments.
The impact of community investing is as tangible as bricks and mortar. CIC “partners with and invests in great organizations,” says Justin Conway, CIC Vice President of Investment Partnerships. “Some I know, and some are in places I only dream of going.” One neighborhood that has been transformed by community investing is his own in Washington, D.C. “Community investing is very real to me when I walk outside,” says Conway, whose neighborhood has been revitalized in part by groups that received loans from CIC. On his way to work, Conway passes renovated affordable housing complexes, improved schools and health care centers, and storm water run-off systems that impact his community every day.
Among the places he might dream of going are Kenya, where CIC’s partner has helped a small-dairy farming cooperative double production and build resilience to climate change, or Honduras, where renewable energy projects are creating jobs and reducing emissions. All told, CIC loans touch people in more than 100 countries.
Conway describes CIC’s role as plumbing: moving the capital that gives life to a small business or community from investors to front-line organizations, and moving the interest earned from repayments back to investors. The CIC approach is responsive, rather than prescriptive, he says. “We are funding partners on the ground who know what their communities need,” Conway says. That includes risk management and due diligence on partner organizations— essential services that give investors confidence—as well as a keen assessment of social and environmental impact.
Interest tends to be higher than standard CD rates but below standard debt-market rates. Community investment (CI) notes are, in some ways, a hybrid of philanthropy and investment. Like a donor, an investor in Calvert CI notes can expect life-changing impacts from the use of their money. A Calvert CI note holder will also give a bit away by accepting below-market rates. But, like an investor, Calvert CI note holders retain their money rather than giving it away, and even earn some interest.
CIC’s partner organizations get reasonably priced loans on fair terms, as well as CIC’s guidance on reducing risk to acceptable levels for investors. CIC keeps pushing into new territory for community investing, seeding new energy companies in Africa and offering a “forest resilience bond” to provide loans for wildfire prevention. The array of projects and geographic regions in CIC’s portfolio provides plenty of opportunities for investors to take concrete action on the issues they care about most.
