High Impact Community Investing
By Scott Secrest
Among the objectives of becoming an investor is, of course, to earn a return on our money to help us enhance our financial security, and meet specific financial goals in the future. So, earning competitive investment returns is important if we’re to meet these vital goals. But, more and more investors are learning that it is possible to earn good returns and to use your money to support positive enterprises.
Take community investing with the Calvert Foundation. Investments can be made through the organization which will direct investor dollars into positive, high impact community investments. Investing in communities is as important now as ever. With the carnage in mortgage foreclosures due to in some cases to predatory lending, many investors are asking how they might be able to use their investments to protect families and get them into affordable homes.
Community investment also helps rebuild the Gulf Coast, expands small businesses and social enterprises, allows micro-entrepreneurs to provide for their families and, importantly, creates jobs here in the US and in developing counties.
Micro-credit loans are loans made to individuals, or small groups who have an idea to launch a small business. With the seed capital provided through micro-credit lenders, they are able to procure the necessary equipment and materials to turn their ideas into money-making businesses. The success rate for these businesses is very high. Making loans as low as $100 changes the lives of hardworking entrepreneurs – mostly women – in developing countries. In many cases, these micro-entrepreneurs are the sole providers for their families.
Through the Calvert Foundation and similar organizations, individuals may invest as little as $1,000 and earn a stated annual rate of return for investing in positive community investments. That money is then used by the Foundation to provide loans.
Through the invested dollars of individual and institutional investors, last year the Calvert Foundation was able to invest $38MM in affordable housing, $35MM in microcredit programs, $21MM in small businesses, and $27MM in non-profits and cooperatives.
Through these programs, neglected neighborhoods have been revitalized, fair-trade cooperatives have been established and are now functioning throughout South and Central America, home loans have been made to low income families, and communities are stronger in each case due to these high impact programs.
Most investors will not invest all of their money into such investments. Diversifying assets is the keystone of a successful portfolio. More often, community investments make sense as a component of a well diversified, socially responsible portfolio of investments. It is important for all of us to take stock of our financial resources, our tolerance for risk and our desired rates of overall return in arriving at a suitable investment approach.
Speak with your financial advisor or visit www.calvertfoundation.org to learn more about how community investing might fit into your financial picture.
Contact Scott to discuss this topic.
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