SRI in Focus: Creating a New Normal

In The Resilient Investor, we noted that this is an era of volatility, uncertainty, complexity, and ambiguity. Five years after the publication of our book, which was devoted to planning for major disruptions, it turns out even we underestimated how prescient our framework would be!

Typically, volatility is described in terms of the severity of equity market price fluctuation. Severe peaks and valleys in a short period of time typically reveal the levels of investor uncertainty in the absence of dependable economic patterns.

Market uncertainty increased when Trump was nominated and elected and was generally higher than normal throughout 2018 and 2019. Although it skyrocketed in February and March, as the pandemic emerged, it has actually been decreasing the past few months.

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Spotlight: First Nations Oweesta

First Nations Oweesta (or Oweesta for short) was founded in 1999 to support economic development in Native American communities across the United States by addressing a lack of financial infrastructure and money.

Oweesta, which means money or “item of exchange” in the Mohawk language, is a non-profit Community Development Financial Institution (CDFI)—a federally certified class of banks, credit unions, and loan funds that are committed to making affordable, responsible loans to historically underserved and disadvantaged communities. In their words, Oweesta’s mission is to “provide opportunities for Native people to develop assets and create wealth by assisting in the establishment of strong, permanent institutions and programs, contributing to economic independence and strengthening sovereignty for all Native communities.”

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Spotlight: The Ujima Fund

The Ujima Fund launched in Boston in 2017 as an outgrowth of years of organizing for racial and economic justice. Ujima, the first community-controlled loan fund in the US, has raised $1.7 million to date. Ujima is a Swahili word meaning “collective work and responsibility”. The membership of Ujima is comprised of more than 250 working-class people of color living in Boston. As members, they vote on community business standards, neighborhood investment plans, and top community needs. Each member, no matter their level of investment, has one vote. Together, members decide which black-owned cooperatives and social enterprises to invest in, as well as those owned by people of color.

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2006: Community Investing after Hurricane Katrina

This article is from our archives as part of the 100th issue special, celebrating twenty-five years of quarterly newsletters. 

Community investment is one of three pillars of socially responsible investing, alongside screening and shareholder advocacy. As natural disasters increase with climate change in the 21st century, this article illustrates why Natural Investments has always made community investing a key component of any client portfolio.

In the fifteen months since hurricanes devastated the Gulf Coast Region, we have participated in revitalizing communities by investing in affordable housing, minority-owned businesses, and redeveloping urban and rural areas torn apart by the storms.

Community development financial institutions (CDFIs) have channeled capital to low-income and displaced people who are traditionally underserved by conventional banks, providing credit to those who have insufficient income or lack credit or collateral. This assistance has been and continues to be critical for those hardest hit by Hurricane Katrina. Because the CDFIs were already in these communities, they had the infrastructure and relationships in place to offer immediate and prolonged help throughout the recovery effort.

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Impact Profile: Calvert Impact Capital

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.

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Impact Profile: American Homeowner Preservation Fund

American Homeowner Preservation has developed a way to help struggling homeowners by leveraging the power of crowd sourced funding. Since 2008, AHP has helped hundreds of families across the country (and in Puerto Rico) resolve unaffordable mortgage debts and remain in the homes and communities they love.

Like many who have been touched by AHP, Joe Willie Hart had fallen behind on his mortgage due to severe illness. Although he recovered and eventually returned to work, the hefty interest and penalty charges were insurmountable. He started planning for the worst: foreclosure and eviction.

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Impact Profile: BlueHub Capital

Credit: Marilyn Humphries Photography

Over the last decade, Natural Investments clients and other accredited investors have contributed more than $173 million to a unique and highly impactful initiative by BlueHub Capital called Stabilizing Urban Neighborhoods (SUN). The nonprofit program has helped more than 1,000 homeowners in foreclosure avoid eviction by purchasing homes at a deep discount from mortgage lenders and then selling the homes back to the former owners immediately, so they don’t have to move.

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Weaning Off Wall Street

Excerpted and adapted from The Resilient Investor by Hal Brill, Michael Kramer, and Christopher Peck

The world in which we live is volatile, uncertain, complex and ambiguous. There’s an unfathomable intertwining of relationships that underlie the global economy and the physical world, making predictions virtually impossible. As financial advisors, it hasn’t been easy for us to overcome our desire for certainty about where the world is heading. But once we acknowledged that the world may not be sitting on the most solid of foundations, and that our clients hold a range of views about our possible futures, it became essential to explore strategies that speak to both emerging innovations and local resilience.

Even a few years ago, such a multifaceted approach would have been impractical, as there were few opportunities to invest in alternative strategies. Today, we are energized by the explosion of socially responsible investing (SRI) options

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Hope Credit Union: Impact Banking for a Hopeful Future

by Sara Loving

Hope Credit Union mortgage client and first-time homeowner Melbatine Hunter. Photo courtesy Hope Credit Union.

As institutions that give profits back to their members rather than to shareholders, credit unions are usually a better banking option than megabanks. However, choosing a credit union is no guarantee that  our money is being used most effectively in your communities. There are low-impact credit unions, just like there are low-impact banks.

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Fighting Deregulation with Community Investment

On May 24, President Trump signed legislation to roll back critically important regulations on the financial industry. The consumer protection measures, which were put in place under the former Obama administration as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, have now joined the long list of public-interest regulations to be terminated by this administration.

When Obama signed Dodd-Frank into law in 2010, the mortgage meltdown that had begun in 2008 was in full swing, the government was bailing out the big banks that had caused the crisis with taxpayer dollars, and Americans were furious enough that legislators were able to push through the most significant changes to financial regulation since the reforms that followed the Great Depression. These include the Volcker rule, which keeps banks from taking speculative investments, and the creation of the Consumer Financial Protection Bureau—which is responsible for regulating consumer financial companies like banks, lenders, and credit unions. The act also created stipulations for banks to create plans to wind themselves down, instead of filing for bankruptcy, in the event of another economic collapse.

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