Community Investing: Move on Up

I have something you will like, my little friend.   It is community investing! It is fun, easy, and delicious.  I just loaned The Reinvestment Fund, based in Philadelphia, some money for a term of 3 years at 2.50% interest.  My investment is basically a CD (certificate of deposit) and I can't get at it until the term is up without penalties.  What is my money doing during those 3 years? Increasing fresh food access in low income communities, building energy efficient affordable housing, and financing charter schools in the Greater Philadephia area.  It feels like I'm making a donation, but I'm getting it all back! Plus interest - a lot more interest than most savings accounts or CDs are getting nowadays.  You'll probably want to start listening to Move on Up immediately because it will last for 9 minutes.



More generally, community investing is "financing that creates resources and opportunities for economically disadvantaged people in the US and overseas who are underserved by traditional financial institutions. Community investors make it possible for local organizations in rural and urban areas to create jobs, provide financial services to low-income individuals, and supply to capital for businesses, affordable housing, and vital community services, such as education facilities."  This definition is from The Community Investing Center, an extremely useful website, really the only useful website about this.  When I searched their database, I wanted to find an institution in Greater Philadelphia, but there are lots of parameters you can select.

There are so many options! The Cooperative Fund of New England finances cooperative housing, worker-owned businesses, and community-oriented non profits in New England.  Owen's housing coop got a loan from them last year to finance maintenance on their coop house. Oikocredit requires a minimum investment of only $20 to invest online in global microfinance.  Pick a global one or a tiny local one.  Four Bands Community Fund loans only to the Cheyenne River Indian Reservation in South Dakota and offers investors interest rates of 0-4% for loans longer than 5 years with a minimum investment of $5,000.  I bet you will find something intriguing.

Minimum investments vary, but many I've seen are about $2,000.  Each fund also has a different investment term, sometimes one year, sometimes three.  Generally the investor can choose up her interest rate (up to a maximum), allowing investors to select less if they choose to be more generous.  This article by Timothy Freundlich (a Wes film major, surprisingly) offers a better primer on community investing than I have here.  I'm just here to get you psyched.  Look, from a pure investment standpoint, where else are you making a sure 3% right now?  Plus your money is being awesome when you make a community investment.  TO THE DATABASE!