community investing guide - strengthen local communities and good green business

8/7/2019 Community Investing Guide - strengthen local communities and Good Green Business

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1 Green Americas Community Investing Guide GREENAMERICA.ORG

CommunityInvesting Guide

INSIDE:How your banking and investing can:

strengthen local communitiessupport good green businesses

lift families out of poverty

and how you can get started today!


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Green America's mission is to harness economic power for a just and sus-

tainable society. We work for a world where all people have enough,

where all communities are healthy and safe, and where the abundance of

the Earth is preserved for all the generations to come. Our programs

grow the green economy, stop corporate abuse, tackle climate change,

build fair trading systems, support local communities, and help families andbusinesses go green. We define green to mean social and economic

justice, community and environmental healthpeople and the planet.

BOARD OF DIRECTORS Mouhamad Alem, Melissa Bradley, Bernard Brennan,Dana Christianson, Nikki Daruwala, Paul Freundlich, Russ Gaskin, Alisa Gravitz,

Priya Haji, Kathy Harget, Eric Henry, Andrew Korfhage, Todd Larsen

Green America1612 K St. NW, #600, Washington, DC 20006

800/58-GREEN fax 202/331-8166GREENAMERICA.ORG

A publication of Green America (formerly Co-op America)

Green AmericasCommunity Investing Guide

table ofcontents

On the cover: Danny Schwartzman (in stripes) started his green business,

the Common Roots Caf, thanks to a loan from University Bank, a community

development bank in Minneapolis. His caf sources locally, from this urban garden

he created, as well as from other organic farmers in Minnesota and from Fair Trade

suppliers around the world. His University Bank loan created 30 green jobs.

Ryan

Taylor

for

Un

ivers

ity

Ban

k

The global economic crisis has focused public scrutiny on the predatory

practices, gross mismanagement, and outright greed of some of the

biggest conventional banks and financial institutions. The housing crisis

has clearly shown what happens when lenders treat borrowers as ameans for leveraging greater corporate profits, providing deceptive and

unsound terms and inappropriate products and services.

Add in unemployment, plus diminishing services from state and local

governments caught in budget crises, and it becomes clear: the work

of community development financial institutions (CDFIs) is

more important now than ever before.

While not a substitute for a sound governmental economic development

policy, CDFIs provide all of us with a much better choice for banking

and investing. Theyre also uniquely positioned to help commmunities in

need, because its been their mission for years. Even better, CDFIs on

the whole are weathering the economic crisis well. We hope thisguide helps you find CDFIs that can serve your banking and investment

needs while putting your money to good use in the world.

IN THIS GUIDE:

Investing in Communities............................................................................... 3

Community Banks vs. Community Development Banks..................................................4

Break Up With Your Bank!.................................................................................................................7

Investing for Good............................................................................................... 8

Success Stories of Community Investing

FAQs: What You Need to Know................................................................. 12

A Primer on Community Investment Vehicles..................................14How Darilyn Kotzenberg Broke Up With Her Bank.......................................................15

What About Online Microfinance?............................................................................................19

Resources................................................................................................................. 20

COMMUNITY INVESTING GUIDE

EDITOR Andrew KorfhageEDITORIAL ADVISORS Alisa Gravitz,

Todd Larsen, Fran TeplitzCOMMUNITY INVESTING DIRECTOR

Fran TeplitzGRAPHIC DESIGN Andrew Korfhage

PUBLISHER Denise Hamler

PUBLICATIONS

DIVISION DIRECTOR Dennis GreeniaEDITOR Tracy Fernandez Rysavy

ASSOCIATE EDITORVictoria Kreha

SENIOR WRITERS Joshua Marks,Sarah Tarver-Wahlquist

SPECIAL PROJECTS & ADVERTISING MANAGER

Rob HansonGREEN BUSINESS SALES & DEVELOPMENT

COORDINATOR Sandy BurkeADDITIONAL ADVERTISING Dennis Greenia

ONLINE & SPECIAL PROJECTS EDITOR

Andrew Korfhage

GREEN BUSINESS NETWORK

DIRECTOR Denise HamlerGREEN BUSINESS DIVISION ASSISTANT

Misha Deborah CliveBUSINESS SCREENING DIRECTOR

Rebecca ShaloffSCREENING INTERN

Sara-Katherine CoxonSENIOR RESEARCHER Tish Kashani

SR. MANAGER, MARKETING & MEMBERSHIPDesire Wolford

GREEN AMERICA EXCHANGE MANAGERKeaty Gross

GREEN FESTIVAL REGIONAL DIRECTORS

CHICAGO & DC: Alix DavidsonSAN FRANCISCO: June Brashares

SEATTLE: Jenny Heins

DEVELOPMENT PROGRAMS

DIRECTOR OF DEVELOPMENTRichard Kim-SollowayMAJOR GIFTS OFFICERS

Amy Genevieve Kozak, Christy SchwengelMEMBERSHIP MARKETING MANAGER

Dana ChristiansonMEMBERSHIP MARKETING COORDINATOR

Molly Rubin

EXECUTIVE TEAM

EXECUTIVE DIRECTOR Alisa GravitzEXECUTIVE ASSISTANT Elizabeth OConnell

CORPORATE RESPONSIBILITY

PROGRAMS

DIVISION & CLIMATE SOLUTIONS DIRECTORTodd Larsen

CLIMATE INTERN Joe EdwardsBETTER PAPER PROJECT DIRECTOR

Frank LocantoreBETTER PAPER PROJECT

CAMPAIGN ORGANIZER Sophie Glass

FAIR TRADE COORDINATORElizabeth OConnell

RESPONSIBLE SHOPPER COORDINATORVictoria Kreha

DIRECTOR, SOCIAL INVESTING &

STRATEGIC OUTREACH Fran Teplitz

GREEN CONSUMER MOBILIZATION &

TECHNOLOGY

DIRECTOR Mouhamad AlemSENIOR INFORMATION SYSTEMS ANALYST

Bernadette Morales GaskinIT/SYSTEMS ADMINISTRATOR Pat Keyes

SENIOR WEB DEVELOPERShireen Karimi

TECHNOLOGY CONSULTANTHans Bauman

ORGANIZATIONAL SYSTEMS

CHIEF BUSINESS OFFICER Russ GaskinDIRECTOR OF FINANCE &

ASSISTANT DIRECTOR OF ADMINISTRATIONNora Marsh

SENIOR ACCOUNTANT &

BENEFITS MANAGER Linda CarpenterACCOUNTS RECEIVABLE SPECIALIST &

DATA ENTRYDeanna TildenDIRECTOR OF COMMUNITY &

DONOR SERVICES Becky LaBounty KeyesCOMMUNITY & DONOR SERVICES

COORDINATOR Jesse DiLauraRESEARCHER Joshua MarksATTORNEYLara Pearson

FOUNDER/PRESIDENT EMERITUSPaul Freundlich

This Guide was made possible in part through

generous support from the Underdog Foundation.

Copyright 2011. Printed on 100% de-inked recycled fiber, elemental chlorine-free.


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Green Americas Community Investing Guide

in Communities

q

For 30 years, a vacant lot stood atthe corner of Wood and 58th St.on the South Side of Chicago.

Within three miles of this street corner,there was no place for local residentsto buy a fresh tomato. To help changethat, the Chicago nonprofit organiza-tion Growing Home was looking to ex-pand its urban agriculture projects, butto complete its newest project at Wood

and 58th, and remain a stable organiza-tion while expanding, Growing Home

would need to take out a loan.Across the country, in New England,

a worker-owned cooperative known asPioneer Valley Photovoltaics was con-fronting a cash flow problem becauseof the nature of their solar installationbusiness. Most of their clients usestate-sponsored solar rebates to pay fora chunk of their installation, but theserebates dont become available until

after the system has been installedand is working. The worker-ownersof Pioneer Valley (also known as PV-Squared) realized theyd need a lineof credit to keep them afloat betweenpayments.

And when Danny Schwartzman grad-uated from college, he knew he wantedto become a green entrepreneur, givingback to his community in Minneapolis

by opening a caf serving local, organic,and Fair Trade food, and paying work-ers a living wage. But Schwartzmanfound that few banks were interestedin financing a start-up green restaurant

with a young prospective owner.As a non-profit organization, a work-

er-owned business, and an individualjust starting a career, Growing Home,PV-Squared, and Danny Schwartzmanhad something in commoneach was

working on a project that would benefit

a local community, and each needed aninflux of capital to survive.

Fortunately, all three have somethingelse in common. Each of them foundthe solution to their financial challengethrough support from a communitydevelopment bank, credit union, orloan fundgroups collectively knownas community development financialinstitutions or CDFIs for short. Un-

like conventional financial institutions,CDFIs include social impact as part oftheir mission and as a measure of theirsuccessmaking the three projectsdescribed above natural fits for funding.

In the case of the urban garden projectin Chicago, for example, Growing Homehad already approached traditionallenders, and found that to conventionalbanks, the projects social benefitscouldnt outweigh what they foresawas a low return on investment. But

A line of credit from The Cooperative Fund of New England

keeps Pioneer Valley Photovoltaics in business, providing good

green jobs, and installing solar throughout the community,

Investing


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Brenda and Silvio Granados in the dining room of their house in the Peachtree Hills

neighborhood in Charlotte, NC. Hit hard by the foreclosure crisis, Peachtree Hills is

bouncing back thanks to responsible housing loans from Self-Help Credit Union.

Diane Davis

when the group turned to the ChicagoCommunity Loan Fund (CCLF) m, thisCDFI saw things differently.

Assessing the community benefits ofthe project, as well as the strong com-mitment of local community leaders

who were determined to see the urbangarden succeed, CCLF stepped in with

some crucial financing.The impact on the community has

been impressive. More than 150 home-less and formerly incarcerated indi-

viduals have received job training fromthe project, a former eyesore has beentransformed into a beautiful garden,and countless Chicago families havebenefited from the newly availablefresh, organic local produce.

Kim Pinkham, a worker-owner atPV-Squared, agrees that her businesssline of credit from the community loan

fund the Cooperative Fund of NewEnglandm has likewise had a wideimpact, helping them convert morehomes and businesses in Connecticutand Massachusetts to solar energy,and preserving good, green jobs.

The line of credit from the Coop-erative Fund helped create three jobs,and retained 12, says Pinkham. Weuse the line of credit to cover pay-roll during installations and to makeup any expenses that arent covered

by our clients payments. It gives usbreathing room we wouldnt other-wise have.

Likewise, Danny Schwartzmansfinancing from University Bankm , aCDFI in Minneapolis, both createdlocal jobs and brought new servicesto the community. At last count,Schwartzman had added 30 jobs tothe local economy via his caf, andfurthermore supports the Minne-sota economy by purchasing organicingredients from local farmers and

producers. The social benefits rippleout from there, all the way back to theFair Trade producers at the beginningof Schwartzmans supply chain foringredients he cant source locally.

These are just a few examples ofCDFI-supported projects. CDFIs alsolend to initiatives supporting localhealth-care; child-care; education;green buildings; and programs em-powering groups like Native commu-

WHATS THE DIFFERENCE?COMMUNITY BANKS AND

COMMUNITY DEVELOPMENT BANKS

Over the past several years, more and more people have been paying attention

to the egregious behavior of some of the worst corporate mega-banks. This

heightened awareness has led to several campaigns to switch to smaller, less

impersonal banks, such as the Huffington Posts great high-profile Move Your

Money campaign. But be aware: Not every community bank is also a

community development bank.

A community bank can be a very good thing, lending money within your local area, or

perhaps more responsive to you as a local customer than a mega-bank would be. But

only community development banks pursue the mission of directing their lending to

the people who have been overlooked by traditional lenders. A community bank

might still not match your values in its lending practices.

When you bank with a community development bank, you know for sure

that your support is helping to create jobs, build housing (including low-income

housing), and provide services that have a positive impact on a community

in need. This Community Investing Guide is designed to point you toward

community development banks.

Find a community development bank or credit union by consulting the resources

in this guide (p. 20), by visiting the Community Development Bankers Association

at www.cdbanks.org, or by visiting the Federation of Community Development

Credit Unions at www.cdcu.coop.


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Odette Mednard in her store in Port-Au-Prince, Haiti. Mednard is a participant in a

microloan program created by Fonkoze in conjunction with the American Red Cross

that has helped many in Haiti to recover in the aftermath of the earthquake.

Talia Frenkel/American Red Cross

plan, says Laura Howe, counselingmanager for the Enterprise Corpora-tion of the Deltam, a CDFI based in

Jackson, Mississippi. We guidedthem through every step, from receiv-ing grant money to selecting a contrac-tor, to credit repair, to fraud preven-tion. And we celebrated with them

when they finally moved back into

their completed homes.

a long history of working with low-in-come borrowers in Haiti a country

where 80 percent of the populationfalls below the poverty line. When thedisaster hit, Fonkoze was alredy there,

with existing relationships alreadyin place to help those affected by theearthquake get back on their feet.

For example, Odette Mednard has

been a client of Fonkoze since 2005,

gency funding from the American RedCross, and already connected by theirpre-existing relationship, Fonkoze

was able to respond immediatelyto Mednards situation. The groupdistributed one-time emergency pay-ments to about 18,000 Fonkoze clientsincluding Mednard, and arranged for

new loans to help those who lost theirbusinesses get started all over again.

The money from Fonkozebrought my family hope, Mednardtold the American Red Cross. Myhusband has been unable to workfor the past six months. Imsupporting my family now.

International CDFIs arent only ofbenefit in a crisis. They have a stronganti-poverty mission in developingcountries at all times. Often known asmicro-lenders, these groups empow-er aspiring entrepreurs like Mednardto provide the services needed by theircommunities.

As implied by the term micro-lender, the sums lent out to busi-ness owners are often very small byUS standards, but they make all thedifference for someone in Haiti, orNicaragua, or Bangladesh.

The model was the brainchild ofeconomist Muhammad Yunus, who

won the Nobel Peace Prize in 2006

for his anti-poverty work. It was inthe 1970s that Yunus realized that forsomeone earning only pennies a day,a small loan of as little as two dollarscould change their life.

Conventional banks balked, how-ever, at his idea that those livingunder the poverty line, with no accessto collateral, could still be consid-ered credit-worthy. So in 1983, Yunusfounded his own bank (the GrameenBank) to further his mission of extend-ing credit to those not reached byconventional lenders.

Not only has Grameen Bank stoodas a huge success on its own, but alsofor nearly thirty years it has inspiredconsecutive generations of micro-lend-ers to take Yunuss idea and extend itfrom his native Bangladesh into coun-tries all around the world.

Whats more, Yunus was right.Grameen Bank and other micro-lend-ers have found that on average their

The economic downturn blocked access to essential linesof credit for many small businesses. CDFIs remain an importantsource of capital to keep vital community businesses afloat.

INTERNATIONALCOMMUNITY INVESTING

Of course, terrible community di-sasters arent confined to the UnitedStates, and fortunately, communitydevelopment lenders arent either.Several lenders have years of experi-ence working in various countriesaround the world, and stand readyto step in with aid, with counseling,and with loans for recovery, whendisaster strikes.

This was the case in Haiti, when thedevastating earthquake struck in Janu-ary of 2010. The international commu-nity development lender Fonkozem has

when a Fonkoze loan helped her starther own dress-making business andopen a small food shop attached to herhome. Mednards relationship withFonkoze has only deepened over time,as she has repaid loans and taken outothers. She has also become a Fonkozegroup leader, hosting regular clientmeetings in her home to counsel othersmall-business entrepreneurs on howto manage their loans.

Mednard was hit hard by theearthquake, losing most of her storesinventory in the wreckage and sustain-ing significant damage to her home as

well. Bolstered by $8 million in emer-


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BREAK UP WITH YOUR MEGA-BANK!JOIN GREEN AMERICAS CAMPAIGN

Green Americas Break-Up With Your Bank campaign is inspiring people across

the country to leave their mega-banks. You too can say good-bye to grossly

over-compensated CEOs, abusive or deceptive lending and marketing practices,

and the use of your dollars to support projects like sweatshop factories and

fossil-fuel development. You wont be alone in telling your mega-bank that you

can have the same services (or better!) with a community development bank or

credit union while ensuring that your deposits will support projects that improve

peoples lives. Heres what others are saying:

clients from below the poverty line payback their loans at a rate of about 97percent, better than the rates recordedby many conventional banks. Access tocollateral, it turns out, is not a prereq-uisite for credit-worthiness.

NOW MORE THAN EVER...Like Grameen, US-based CDFIs see

similar (or better) returns on theirloans to low-income individuals, andunfortunately, in the US, the need forCDFIs has never been greater. A June2010 study by the Center on Budgetand Policy Priorities confirms a dis-heartening truth about income inequal-ity in this country: the gap between therichest and the poorest is widening.

Between 1979 and 2007, the reportfound, the income gap separating therichest one percent of Americans fromthe poorest 20 percent more thantripled. And those at the top saw theirincomes rise an astonishing 281 percentover this period, even adjusting forinflation.

The global economic downturn thatbegan in 2008 briefly slowed the widen-ing gap, but in its aftermath, the studyfinds, it is the rich who are recoveringfirst and fastest. CDFIs, however, havebeen there to help those with less accessto wealth find the investment capitalthey need to get ahead.

While the downturn led to manyfinancial institutions pulling back ontheir lending, CDFIs have actuallyincreased their lending and invest-ments in underserved communities,says Todd Larsen, Green AmericasCorporate Responsibility Director. Formany small businesses that have lostaccess to essential lines of credit fromconventional sources, CDFIs remainan important source of capital to keep

vital community businesses afloat.Thats just part of why now is an

excellent time to support CDFIs withyour banking and investing dollars.Unlike the conventional banks that lentout billions in unsound and preda-tory subprime mortgages that thattheir borrowers couldnt repay, CDFIsdidnt engage in the reckless financialgames that brought about the crisis.Whats more, CDFIs are an active partof the solution for those hardest hit bythe downturn. If all lenders took theapproach of community development

lenders, our economy wouldnt be inthe shape its in today, says Larsen.

Directing more of your banking andinvesting toward CDFIs, you can helpkeep them strong, and help a provensystem support communities in need.

While not a replacement for gov-ernment action to address the needsof struggling communities, commu-

nity investing plays a crucial role ingrassroots economic development,says Fran Teplitz, Green AmericasSocial Investing Director. People

who place their accounts and invest-ments in CDFIs are taking a step thathas enormous positive repurcussions,strengthening communities in theirown backyard, across the US, andaround the world.

When I closed my account, I was asked to state a reason. I saidphilosophical differences and the teller replied with a slight smile:Thats

not one of the choices I have to choose from. I walked down the street to

my local credit union and felt a new freedom.

Jim G., Bainbridge Island, WA

Over the past year, I have moved my accounts from Bank of America to

One PacificCoast Bank and a local credit union. I am now in the process

of phasing out my Bank of America credit card, and have begun using the

Green America credit card instead. It feels really good to have made these

changes!

Lynette B., Fresno, CA

Thanks for the nudge, Green America. Ive been meaning to do this for

years. I think its the bonuses the banks gave themselves after the bailouts

that finally pushed me over the edge. Theres just so much they do that I

cant support, and now I dont have to. I switched to a community bank

that has a commitment to green values.

Valerie K., Minneapolis, MN

For the story of how one Green American broke up with not just one but two

mega-banks and found a community development bank she could trust, see p. 15.

And if you choose to break up with your bank after reading this Guide, wed

love to hear your story. Let us know at [email protected].

m Designates an approved member of Green Americas Green Business Network


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When the Fresh Grocer opened inNorth Philadelphias ProgressPlaza on December 10, 2009, its grandopening marked a new era of access tofresh and healthy food in a previouslyunderserved area of the City of Broth-erly Love.

Built in 1968 by civil rights leader

Rev. Leon Sullivan, Progress Plazastands as the nations oldest African-American owned and operated shop-ping centerbut it had seen its lastsupermarket tenant move out nearly adecade ago. Since the late 1990s, Prog-ress Plazas owners had struggled tofind a supermarket operator preparedto open a grocery store in the urbanenvironment of North Philadelphia.

Thats where the Philadelphia-basedcommunity development loan fund The

Reinvestment Fund (TRF)mcomes in.Since 2004, TRF has participated in apublic-private partnership called theFresh Food Financing Initiative (FFFI).Working together with The Food Trust(an organization devoted to providingnutritious food to underserved com-munities) and the Greater Philadelphia

Urban Affairs Coalition (which works tocreate jobs for minority workers), TRFprovides financing for supermarkets thatplan to operate in underserved commu-nities across the state.

With the opening of the FreshGrocer, the FFFI celebrated thecreation of nearly 300 jobs for NorthPhiladelphia, plus more than 45,000square feet of new fresh-food retailspace in an area that had previouslyhad none. Whats more, the supermar-

ket was able to incorporate numerousgreen features for its new space, in-cluding an energy-efficient refrigerationsystem that reduces energy use up to40 percent over conventional systems.

The project caught the attention ofnone other than First Lady MichelleObama who traveled to Philadelphia totour the store in connection with herinitiative to combat childhood obesity.

For ten years in this community,there were kids who couldnt get the

nutritious food that they needed duringsome of the most formative years oftheir lives, said Mrs. Obama, duringher February 2010 visit. Today, just afew months after it opened, the FreshGrocer is doing a thriving business. Itsa beautiful store, attracting folks fromneighboring communities and provid-ing jobs for folks in the area.

The Fresh Grocers success is just oneof the most recent of TRFs many suc-cesses with the FFFI partnership. Since

2004, TRF has provided more than $85million in grant and loan financing to su-permarkets and grocery stores designedto bring greater access to nutritious foodat affordable prices to underserved areas bringing more than 5,000 jobs toPennsylvania communities.

For example, in 2008, FFFI helped afamily-owned and -operated supermar-ket chain expand in rural central andnortheastern Pennsylvania, providingemployment for nearly 1,000 people,and updating the stores with energy-

efficient equipment. That same year,FFFI provided funds to support theexpansion of Weavers Way, one of theoldest continuously operated food co-ops in Philadelphia. And in 2009, FFFIprovided financing for Right by Na-ture, a full-service natural foods storein Pittsburgh that specializes in freshand affordable organic produce, andmaintains a commitment to purchasingproduce directly from organic farmersin its Field to Store program.

S U C C E S S S T O R I E S S H O W T H E P O W E R O F C O M M U N I T Y I N V E S T I N G

INVESTING FOR GOOD

Creating Good Jobs andImproving Local Food Security

Working together with partners in the Fresh Food Financing Initiative (FFFI),community lender The Reinvestment Fund has saved jobs, improved supermarket

energy efficiency, and brought fresh, nutritious food to underser ved communities.

The Reinvestment Fund

You can find community investment opportunities that help you put your money to work for positive change in every issue area

covered by Green America. The stories below represent just a small sampling of the ways your banking and investing dollars can

create great green jobs, build affordable housing, install green energy systems, support the Fair Trade marketplace, and much more.


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palachian Housing Enterprises (FAHE),HOPE is one of many of FAHEs housingpartners who work together to makeaffordable housing available to low-income residents throughout centralAppalachia. When Nunley had her fi-nancial house in order, HOPE then con-nected her with FAHE for the loan that

would make home-ownership andstability a reality for her family.

With the FAHE loan, Nunley wasable to buy a home built by HOPEin the new Deerfield subdivision inWytheville. Designed following aLow-Impact Development model, theDeerfield neighborhood is unique foran affordable housing development.Developments built on this modeluse soil- and plant-based filtrationtechniques to remove pollutants andprotect the communitys ground-water.FAHE partners also pursue energy-ef-ficient housing developments, to help

minimize future energy bills for theirlower-income borrowers.

In addition, Nunley receives regulartips and resources from HOPE, suchas home-maintenance tips for protect-ing her investment, and financial tipson how to balance a household budgetand stay on top of mortgage paymentsto avoid foreclosure. The personal,high-touch methods employed by com-munity development lenders have beenkey in keeping individuals like Nunleyand organizations like FAHE steady

during turbulent economic times.For example, FAHE president and

CEO Jim King reports that while WallStreet and conventional lenders went intofinancial meltdown triggered by high fore-closures on their irresponsible mortgagelending, FAHEs foreclosure rate for 2009held steady at a low one percent.

This is a great program, says Nun-ley. I know that the economic times aretough right now and that a lot of organi-zations are losing their funding, but thisprogram really helps people. I wouldhave never been able to get a loan withthat low of an interest rate and afford ahouse of my own [without FAHE].

FAHE is just one of many housing-focused partners who provide loans toindividuals like Nunley with fundinggenerated by the Calvert FoundationsmCommunity Investment Notes. Individ-uals can invest in a Community Invest-ment Note through Calvert Foundation,

which then lends to several communitydevelopment institutions, like FAHE,all at once. As the loans are repaid, thecapital is lent out again, multiplying thesocial impact of your investment.

We make it possible for everydaypeople to place investment dollars

where theyre needed most creatingjobs and homes for families in low-income communities, says Lisa Hall,Calvert Foundations President andCEO. While we have been bringingthis type of investment opportunity to

Were very proud of our Pennsyl-vania food-security program, and itsjust the beginning, says Patricia Smith,director of special initiatives for TheReinvestment Fund. Were managinga program built on this model in New

Jersey, and were a consultant on similarprograms in New York. Its our hopethat we can expand this to other states

as well, and that we can be a guide forcommunity development loan fundsthat want to take up the issue of foodsecurity in other geographic regionsaround the country. These loans are apowerful tool for helping communitiestake control of their health, build moreliveable neighborhoods, and keep goodlocal jobs close to home.

Providing Access toAffordable HousingIn the fall of 2008, when the father of herchildren was incarcerated, Leanne Nun-ley of Wytheville, Virginia found herselfin a bad situation. As a single motherand now the sole bread-winner, Nunley

worked hard to make ends meet, but sheand her children couldnt find permanenthousing. They bounced from one tempo-rary living situation to another.

Nunley believed this wasnt a suit-

able life for her children, Ariana, Alijeh,and Acelon (then 3, 4, and 6), so she wasdetermined to establish a stable house-hold for her family. She approacheda local nonprofit organization calledHOPE (Helping Overcome PovertysExistence) to see if she could find aprogram that would help her pay herrent. The counselors at HOPE gave her ashock. They looked at her bills and toldher they thought she could buy a housefor the same or even less money than shehad been paying on rent.

I didnt think it was possible,says Nunley, who first had to work

with HOPE on improving her credit.My credit took the longest time to getcleaned up about a year because Ihad to pay a little here and a little there,and then had to wait for my taxes tocome in and pay the rest of it off.

But HOPE continued working withLeanne as she made progress towardgreater financial security. Financed bythe Kentucky-based Federation of Ap-

Richard Lord for the Calvert Foundation


Leanne Nunley and her children found access to affordable housing

through the Federation of Appalachian Housing Enterprises, supported by

investments in the Calvert Foundations Community Investment Notes.


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hundreds of that countrys cocoa pro-ducers. Thats when the first shipmentof Fair Trade Certified cocoa from theSierra Leone cooperative Kpeya Agricul-tural Enterprise (KAE), was purchasedby Divine Chocolatem, for inclusion inits chocolate bars and other Fair Tradechocolate products.

First founded in 1996, during the civil

war, the KAE cooperative has grownto more than 1200 members. The newpartnership with Divine Chocolate(co-owned by the Kuapa Kokoo coopera-tive in nearby Ghana) represents KAEsfirst entrance into the global Fair Trademarketplace, and marks a new era of re-gional cooperation, with exchange visitsbetween Kuapa Kokoo and KAE usedto share expertise on things like tips forrunning the cooperative and for raisingthe quality of the cocoa.

If Kuapa Kokoos experience is anyguide, then KAE can expect big thingsfrom the new partnership. The FairTrade system provides farmers with afair price for their products, offering asocial premium over conventional marketprices. Kuapa Kokoos work within theFair Trade system has resulted in numer-ous community development projects,including new schools, water wells,bridges, and a community-based creditunion available to cooperative membersfor new entrepreneurial projects, such as

small-scale manufacturing efforts (soapsor batiks, for example), or for the diversi-fication of crops.

On the larger financial scale, none ofthis would have been possible withoutup-front investments from a communitydevelopment financial institution with acommitment to the Fair Trade system.

An initial investment from internation-al lending pioneer OikocreditmhelpedDivine Chocolate launch its successfulentry into the US market in 2006, andcontinuing investments from Oikocredit

have enabled the companys currentsuccesses including the expansion to

welcome cocoa from the sister coopera-tive in Sierra Leone.

As Divine grows, as a result of invest-ments like those from Oikocredit, it al-lows us to work with more farmers, work

with more Fair Trade commodities, andextend the benefits of Fair Trade, DivineCEO Erin Gorman told Green America.Being part of a Fair Trade organiza-tion has also meant that the farmers get

to be community investors themselves.Members of Kuapa Kokoo have accessto the community credit union, whichtheyre very proud of, because a problemfor many small-scale farmers is that theyhave no access to credit.

Gorman explains that small-scaleborrowing in West Africa can have adisproportionately positive effect on

local communities, telling the story ofone Kuapa Kokoo farmer who was ableto set up a side business for his wifeand sister-in-law with a loan of only$75. Investors in Oikocredit can knowthat their dollars are being directed intosuch a system, improving the lives offarmers at the beginning of the supply-chain, while making high-quality FairTrade chocolate more available in theUnited States.

Divines mission has always been toimprove the livelihoods of West Africanfarmers, says Gorman. With this cocoafrom Sierra Leone, we are extending ourreach beyond Ghana and increasing ourimpact. Our partners at Oikocredit aredoing more than just investing; theyrehelping grow the market for the farmersand helping build a better way of life.

Members of the Kuapa Kokoo cooperative opening cocoa pods in Ghana.

Lending from international community investment pioneer Oikocredit has helped

cooperatives in Ghana and Sierra Leone get access to the Fair Trade market.

Divine Chocolate

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published estimates from the FDIC andNCIF indicate a year similar to 2009.

Meanwhile, the National Federationof Community Development CreditUnions reports that deposits in itssector have actually outpaced thegrowth of conventional credit unions

during the recession. Its 2009 financialtrends report found that communitydevelopment credit unions (CDCUs)experienced significant increases inmembership, deposits, and size of theirloan portfolios in 2009.

Whats more, the American Recoveryand Reinvestment Act of February 2009appropriated an extra $100 million toCDFIs certified as such by the govern-ment, enhancing their lending capacities.

In testimony before the House Finan-cial Services Committee, CDFI Fund di-

rector Donna Gambrell said, The neweconomic environment has offered veryreal opportunities for CDFIs to expandtheir impact in the communities theyserve. ... We are uniquely positionedto serve low-income and economicallydistressed communities.

And in a July 2010 article comparingCDFI performance with conventionalbanks performance during the recession,analyst Bob Adkins of Community Bank

Ventures showed that while CDFIs re-

turn on assets (ROA) have lagged behindtheir conventional counterparts, theyalso continued strong growth through-out 2008, while the rest of the economycontracted. Explains Adkins: There hasbeen a pent-up need for products andservices offered by CDFI banks in thecommunities they serve, as many of thesecommunities have been underserved bytraditional banks.

(For more on the economic crisis andCDFIs, see www.greenamerica.org/go/economiccrisis.)

Besides banking, what other

community investing options

are available?

Lots! Community development loanfunds provide financing for cooperatives,green businesses, nonprofit organiza-tions, and economic development proj-ects. Microenterprise loan funds providesmall loans to entrepreneurs in the USand overseas. Community development

venture capital funds provide loans tobusinesses creating jobs for low-in-come communities, and some socially

responsible mutual funds devote up toten percent of their assets to communityinvesting. You can even find credit cardsthrough community development banks.See our in-depth list of investment ve-hicles on p. 14. Remember that its onlyaccounts at community developmentbanks and credit unions that are feder-ally insured up to $250,000. Loan funds,

venture capital funds, and other vehiclesare not insured, so the risk is higher.As with all investment options, you or

your financial adviser should investigatethem thoroughly to ensure they meetyour social and financial goals.

Do I need large sums of money

to invest in communities?

You do not need large sums ofmoney to invest in communities. Manyoptions have low or no minimumamounts.

What impact will community

investing have on my

investment returns?If you choose to shift your checking

or savings account to a CDFI, or dumpyour mega-bank credit card in favor of aCDFI-sponsored credit card, you shouldfind that interest rates and other terms

will be comparable to those at tradi-tional banks and credit unions.

With community development loanfunds and microenterprise funds, thereturn on investment will usually run be-

tween zero and four percent. In a roar-ing market, your returns might be moremodest than other investment vehicles.

In a faltering market, when many stocksbegin paying negative returns, returnson community investments may turnout comparatively better.

Either way, the social returns aregreater with community investments,and no matter what type of market

were in, experts agree that investorsshould diversify their portfolios to mini-mize risk. Community investing can be ahealthy part of a diversified portfolio.

Why not just give the money

to charity?

Take a look at the chart above.As you can see, a potential $20 reduc-tion in the return on an investment

vastly exceeds the social-change capa-bilities of a $20 gift to charity.

Whats more, community invest-ing can be much more empoweringfor low-income individuals lookingto use their own skills and talents tolift themselves economically. Yourmoneys power to change a community

ripples out from the initial borrowerwho then embarks on a venture thatwill provide education, jobs, cleanenergy, child care, or any number ofother critical business and infrastruc-ture needs for their local community.

Continue to be generous in giv-ing to charity, and then also considerbreaking up with your mega-bank, andmoving at least one percent of yourportfolio into community investing.

CharitableGiving

When you make a $20donation:

You give $20...

... and $20 goes to help people and

communities.

CommunityInvesting

When you invest $1,000 in a

community investment at 3%:

Your interest earnings may be reduced

by $20, compared to a higher-

performing investment...

...and the entire $1,000 goes to work

helping people help themselves.

vs.

Q.

A.

Q.A.

Q.

A.

Q.

A.


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Unless you keep all of yourmoney in cash in a shoebox,or under your mattress, or in a

buried sack in the backyard, your dol-

lars are constantly having an effect onthe world one way or another.

When you spend your money,youre often choosing businesses tosupport because of the effects youknow your choices have immediately,in the real world. You know the dif-ference between buying organic andlocal vegetables vs. conventional andpackaged snack food, or betweenelectricity from a wind farm vs. elec-tricity from a coal plant.

Deciding where and how to saveor invest your money presents youwith the same sort of choice, becausewhere you choose to place your moneyaffects how your money will be used.

When you put your money in thebank, it doesnt just sit there. Its likein the movie Its a Wonderful Life,

when the Jimmy Stewart character,George Bailey, reminds the townspeo-ple that their money isnt physicallysitting in the bank.

A Primer on CommunityInvestment Vehicles

Your moneys not here, Georgetells them. Its in the Kennedy house,and the MacLaren house, and a hun-dred others. You all put your savings

in here and then we make loans topeople to buy homes and cars andother things.

Alas, when you save or invest inconventional banking products in the21st century, the bank isnt likely to beable to talk to you face-to-face, George-Bailey-style, and explain exactly what

youre helping other people to buy orbuild, by giving access to your money.Do you wonder what it might be like if

you could get a straight answer to that

sort of question?Your moneys not here, the bankmight say, Its financing an oil-and-gas exploration project in the Gulf ofMexico, and helping a mega-corpo-ration expand into new sweatshopfactories in Southeast Asia. Its in theCEO bonus, and the CFO bonus, anda hundred others.

But nobody asked you if this is theeffect you want your money to have onthe world. What can you do, instead?

You can be much more confidentabout how your money is put to use

when you save or invest in commu-nity development financial institu-tions (CDFIs). CDFIs operate with aninvestment mission that aims to helpbuild and develop local communitiesin a way thats more likely to be con-

sistent with your values (see examplesof CDFI successes on page 8).

Whether you need a bank for de-positing your paycheck week-to-week,or an investment opportunity for alarger sum, or anything in between,theres a CDFI option for you. Below,

we walk you through the availablevehicles, and beginning on page 20,we have a list of resources to help youfind options that are right for you.

CHECKING ACCOUNTS, SAVINGSACCOUNTS, AND CREDIT CARDS

Community development banks andcredit unions operate on the theorythat ownership allows people to takeresponsibility for improving theireconomic situation, and that the endresult is good for individuals and com-munities alike.

These banks and credit unions in-tentionally support projects that buildhealthy communities, oftentimes chan-neling funds to those without readyaccess to more conventional forms ofcredit. They help low- and moderate-income people buy homes, start smallbusinesses, continue their education,or create much needed communityservices like child care.

When you open a checking or sav-ings account with one of these banks

or credit unions, you know that yourmoney is helping to support an insti-tution that is working hard for socialchange. Your accounts are federallyinsured up to $250,000, and manybanks and credit unions also offeronline banking, so even if there isntone near you, you can still use youreveryday banking to create healthycommunities.

Whats more, you can find most anyother conventional banking product

tools youcan use

continued on p.16

Whats available, how to get involved,

expected returns, and potential risks

Kat Hand (with daughter Michelle and granddaughter Kloe Mae) brought stability to her

extended family when she was able to purchase a home in Portland, OR via a program

funded in part by the CDFI One PacificCoast Bank (formerly ShoreBank Pacific).

ROSE CDC


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Its been almost five years since GreenAmerica member Darilyn Kotzenbergsbig break-up, and shes never looked back.

Asked if there have been any negatives or

draw-backs to packing up and moving on,

she answers simply: Nope. Shes happywith her new relationship, and the truth

is, at the point of the break-up, she was

completely fed up.The year was 2006 and Kotzenberg was

sincerely disappointed with Citibank, asshed been in the past with other mega-banks, like when shed switched to Citifrom Wells Fargo a few years before. Facingirreconcilable differences over everythingfrom big-picture philosophy to just commoncourtesy, Kotzenberg found the onlysolution was to part ways, so she canceledher Citibank checking and savings accounts.

Plain and simple it was the lack ofrespect, she says about the motivation forthe break-up. They really only care aboutpeople who have large sums of moneyin their accounts The tiny print in thecontracts, the charges if youre overdrawn;its unbelievable. Theyll let you take moneyout if you dont have it, and then hit youwith the monstrous fees. That kind ofstuff. I just wanted a bank that isnt mean. Iwanted to be treated fairly.

So, Kotzenberg went looking for a

smaller bank a local community bankthat would match her values better. Whenshe found San Franciscos New ResourceBankm, she says she not only found a bank

that matches her green values, but a bankthat treats her with respect.

I think I pushed 0-0-0-0-0 right in thewomans ear the first time I called the bank,because I automatically assumed I was in aphone maze, says Kotzenberg. They actuallyanswer their phone! They remember me,they e-mail me, and they help me.

Even still, Kotzenberg says the friendly,personal service was actually her secondaryreason for making the switch. The firstreason was because New Resource Bankpursues green projects in its lending,something Kotzenberg wanted to support,

as a next step in the overall journey ofgreening her own life.

As the creative director of her owngraphic design studio, Kotzenberg producesgraphic design projects for organic-food andgreen-building companies. At home, she saysshes slowly turning her space into a greenMecca, currently working on installing agreenhouse that will use worm compostingand aquaponics to help her grow her ownfood. This latest green step builds upon

How Darilyn Kotzenberg Broke Up With Her BankI just wanted a bank that isnt mean.

other recent green steps shes taken: tostop purchasing items packaged in plastic(Its led to more cooking, which is fun),and to take all trips shorter than 40 milesby bicycle or on foot.

So, if Kotzenberg can go the extra mileto be green at home, she wants a bankthat wont take her green-earned dollarsand use them to finance projects she cantcountenance. By contrast, New ResourceBank lends only to businesses committedto sustainability, and offers loans dedicatedto solar and energy-efficiency projects.Whats more, New Resource carbon-offsets all employee commuting and travel;recycles, reuses, or composts about 95percent of its waste; and the offices areLEED Gold-certified.

Finally, Kotzenberg points out that

while she no longer lives in the BayArea, New Resource Banks hometown,she still finds banking with them to beconvenient and easy, via online banking,direct deposits, mailing checks to the bank,and communicating via e-mail. So, even ifyou dont live in an area with a communitybanking option just around the corner, youcan still break up with a mega-bank thatsall wrong for you, and find a communitybank that matches your values.

New Resource Banks financing gave Jason Tanko, owner of Tanko Streetlighting Ser vices, the capital he needed to

start his business providing energy-efficient lighting retrofits to cities around the country.

New Resource Bank


Kotzen

berg


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such as CDs, money market ac-counts, and more at a communitydevelopment bank or credit union,and their products pay a competitiverate of return. Some even offer creditcards, so you can cut up those mega-bank credit cards in your wallet, andstart letting your credit purchases go

to work for healthy communities.Who can get involved?:Anyone!

If you have a checking or savingsacount already, you can shift to acommunity development bank orcredit union for those services. Iftheres not a brick-and-mortar bankor credit union in your area, you canlook at that as a positive. It means

you can shop among those that of-fer online banking to see which oneimpresses you the most with its local

successes and community-buildingaccomplishments.

COMMUNITY DEVELOPMENTLOAN FUNDS

Community development loanfunds (CDLFs) provide low-costfinancing to individuals, coopera-tives, and nonprofit organizations in

developing urban and rural areas inthe US and around the world.Choosing to invest money in a

CDLF means you might be helpinga local developer build affordablehousing or helping a first-time entre-preneur start a Fair Trade business.You might be helping finance a com-munity garden, or a green roof, or a

wind farm, or a supermarket in anunderserved area. In short, CDLFslend to many various types of en-deavors, and all of them use investor

capital to create critical infrastruc-ture and services in communities thatneed them most.

A subset of community develop-ment loan funds exclusively supportthe development of small-scale, localbusinesses in the developing world,often owned and run by women orlow-income individuals who havebeen underserved by conventionalfinancial institutions. In countries

Flori

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Commun

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Loan

Fun

d

Vermont

Commun

ity

Loan

Fun

d

Chicago

Commun

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Loan

Fun

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where self-employed individuals canmake up as much as half the laborforce, these microenterprise lend-ers can help small businesses thrive,

which builds strong local economies.For a low-income entrepreneur in thedeveloping world, a loan of as littleas $25 can make the difference in

whether a business survives.

Whether domestic or international,under the CDLF system, lenders andborrowers know each other. Thelenders are familiar with the com-munity endeavors theyre funding,and the borrowers have an ongoingrelationship with their lender, some-times including training and techni-cal assistance along with the loan, ifapplicable. These are basic principlesfor CDLFs that help to keep themstrong. Along with the reasonableand realistic (rather than speculative)rates of return on CDLF investments,CDLF principles have helped the loanfunds weather the most recenteconomic storms.

Who can get involved?: Individu-als of all income levels can invest incommunity development loan funds.Ask for a prospectus or informationpacket before you invest in a givenCDLF to check whether you meettheir requirements and to ensure thatthe fund meets with your social and

financial goals.How much money must I invest?:

Most CDLFs have minimum invest-ment amounts, generally $1,000 ormore, although some internationalmicroloans may require a signifi-cantly smaller investment, as littleas $25 or so. Note that the success ofmicrocredit in the community devel-opment world has led some conven-tional banks to move into this arena.However, their interest rates can beexploitative, contrary to the spirit of

true community development lending.Stick to the lenders in the resourcessection of this guide, or be sure to ex-amine the terms closely on any vehicle

you might choose.What kind of returns can I expect?:

CDLF investments are most appropri-ate for money you can afford to havetied up for at least one to three years.Interest rates are generally market orbelow-market, falling between zeroand four percent, depending on the

investments size and term. In somecases, investors can choose betweendifferent rates, knowing that acceptinga lower one allows their investmentsto do the most good.

Investors generally receive inter-est payments quarterly or annually,depending on the specifics of the loanfund. At the end of your investment

period, the CDLF will repay your prin-cipal. Youll also have the option ofrenewing (also sometimes referred toas recycling) your loan or donatingit to the CDLF. If you choose to donateany portion of your investment backto the CDFI (either your principal or

your interest), that donation may betax-deductible.

What are the risks?: CDLFs are notinsured, so your risk of losing your

Shared Interest

Photos, facing page, top to bottom:

Funding from the Florida Community

Loan Fund helped establish a day

care center and charter school for the

children of farm-worker families at

the Beth-el Farm-worker Mission in

Wimauma, FL.

Produce from this organic community

garden, funded through the Chicago

Community Loan Fund, feeds familiesin underserved areas of the south side

of Chicago. The garden also provides

job training for homeless and formerly

incarcerated individuals.

The development of this seed-

separating machine was financed by

the Vermont Community Loan Fund

for the High Mowing Organic Seed

Company, which has created 23 green

jobs in Hardwick, VT.

continued on p.18

In Limpopo, South Africa, a client repays her loan from the Small Enterprise Foundation

which is backed by the US-based micro-lender Shared Interest. These entrepreneurs use

their micro-loans to launch and r un small businesses vital to their local community.


18/24


principal is greater than putting yourmoney into an insured bank account.However, CDLFs use grant money andloss reserves to help protect individualinvestors. Of the 508 community devel-opment financial institutions surveyedthrough the CDFI Data Project through2007, none have reported that they

have ever lost any investor principal.Do I need a financial planner to

invest?: You do not need a financialplanner to invest in a CDLF, though

you may choose to consult one. If youdecide to donate your investment, youmay want to check with a tax plannerto help you figure out whether any of

your donation is tax deductible.

COMMUNITY DEVELOPMENTPOOLED FUNDS

To diversify your community invest-ments, you can consider investing in anintermediary that invests in a large poolof community investing institutionstargeting a range of issues. At present,only the Calvert Foundationsm Commu-nity Investment Note offers this option,

which supports several communitydevelopment institutions at once, acrossmany geographical and issue areas.

When you invest in Calvert Foun-dations Community Investment Note,the full value of your principal is lentout to help underserved communities.As loans are repaid, the capital is lent

out again, multiplying the social im-pact that your investment has created.At maturity, your capital is returned to

you with interest.Who can get involved?: Individu-

als of all income levels can invest inpooled funds.

What kind of returns can I expect?:

Much like standard loan fund invest-ments, the expected return would beslightly below market interest rates,up to around four percent. The CalvertFoundation estimates an approximatetwo percent return rate in a calcula-tion on its Web site.

What are the risks?:In general,the risks are similar to investing in asingle CDLF, though the active moni-toring and diversity of a pooled fundcan mitigate those risks.

Do I need a financial planner to

invest?: You do not need a financialplanner, though you may choose toconsult one.

MUTUAL FUNDSMost socially responsible mutual

funds use either positive or negativescreens (or both) to direct your invest-ment dollars toward companies whose

values you support and away fromthose you dont. Some also engagein shareholder advocacy, using theirposition as part-owners of a major cor-poration to push for stronger social orenvironmental commitments, or moreresponsible corporate governance.

In addition, some mutual funds havea community investing component totheir fund. Like a pooled fund, with amutual fund your investment is diversi-fied, but unlike a pooled fund, not allof your investment is targeted toward

underserved communities. The leveland type of community investing may

vary over time, so be sure to contactthe fund for up-to-date information.

Who can get involved?:Individualsat all income levels can invest in mutualfunds. Check to see if the fund youchoose requires a minimum investment.

How much money must I invest?:

Your investment strategy can varybased on how much money you have.Even small, regular investments, like$25 a month can earn you significant

returns with compound interest.What kind of returns can I expect?:

The longest-running SRI index ofsocially responsible mutual funds, theFTSE KLD 400, was started in 1990.According to the Social Investment Fo-rum (SIF), since its inception throughDecember 31, 2009, the FTSE KLD 400showed returns of 9.51 compared with8.66 percent for the S&P 500 over thesame period. Numerous studies show-ing socially responsible mutual funds

to be competitive with conventionalmutual funds can be found on the SIFmWeb site, www.socialinvest.org, or at

www.sristudies.org.What are the risks?:Socially

responsible mutual funds are sub-ject to market fluctuations similarto conventional mutual funds. Toinvestigate the progress of a specificsocially responsible fund, you canvisit the mutual fund performancechart on Green Americas Web site at

Nepalese children from a previously unelectrified village stand outside their schoolhouse,which now receives clean hydroelectric power from the community-based Lamjung Electricity

Development Company, made possible by the US-based community investors E + Co.

E + Co.


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www.greenamerica.org/socialinvesting/mfpc/index.cfm. Like all mutual fundproducts, SRI mutual funds do notprovide any insurance against risk,including loss of investments.


invest?: You do not need a financialplanner to invest in mutual funds,though you may choose to consult oneto find the best funds for you. GreenAmericas National Green Pages listssocial responsible financial plannersacross the country at www.greenpages.org, or you can receive a print copy free

with Green America membership. (Signup at www.greenamerica.org.)

VENTURE CAPITAL

Community development venturecapital funds operate much like tradi-tional venture capital funds, in seekingstrong returns on investment, but witha mission to create good jobs in under-served communities. These investmentsare vital for small businesses, whichoften hold as their primary sources ofrisk capital only the personal savingsand loans from friends and family.

Instead of offering standard fundsthat are open to multiple investors,most venture-capital investing com-

panies design individual investmentopportunities for each client. Investors

with high risk tolerance and substantialsums to invest can become community

venture capitalists, providing equityinvestments in new community-focused businesses.

Along with financing, venture capitalfunds provide extensive entrepre-neurial and managerial assistance toportfolio companies. They may sit ona companys board of directors, help

with contracts, assist in designingbudgets, and help set up additionalfinancing.

Who can get involved?:These arehigher-risk ventures involving largersums of capital, so most investorshere are higher-net-worth individu-als. Investors in venture capital fundsmay also need to be accredited, whichmeans they must be designated asmeeting specific criteria of the US Secu-rities and Exchange Commission.

How much money must I invest?:

Minimum investments for communitydevelopment venture capital can rangefrom $50,000 to $1 million. Investmentcommitments tend to be long-termtypically ten years or more.

What kind of returns can I expect?:

The return on a community develop-ment venture capital (CDVC) invest-ment varies depending on the successof the companies in which it invests.In 2007, the Community Development

Venture Capital Alliance published astudy of the three oldest CDVC fundsand found a 15.5% gross internal rateof return.

What are the risks?:Venture capi-tal investments are higher risk thanmost investments, but the potentialfor higher returns is greater, as is thesocial impact. Venture capitalists enjoy

financial highs when the companies inwhich they invest do well, but they alsoshare in the lows when the companiesdo poorly. They are not insured.


invest?: Investors in venture capitalfunds need to be well-versed in the risksand potential rewards of their invest-ments, so a venture-capital savvy finan-cial planner is highly recommended.

WHAT ABOUT ONLINE MICROFINANCE SITES?

So, what if youve already moved your day-to-day bank account to a community

development bank, and you want to get even more involved in community investing,

but you dont have the $1,000 or more that is often required to take the next step and

invest in a community development loan fund? Thanks to a new generation of online

microfinance sites, individuals wishing to invest as little as $20 - $25 can make

a difference for communities around the world where what might seem likea small amount to you can make all the difference for a struggling entrepreneur. Two

popular online sites that offer this service are Microplace.com m and Kiva.org.

MICROPLACE.COM (which was purchased by eBay in 2006) enables you to

invest $20 or more in microfinance institutions in Africa, Asia, Latin America,

North America, the Middle East, and Samoa. You can choose a modest interest

rate between one and six percent and how long youll give your recipient torepay the loan less than a year, between one and three years, or more than three

years. Although you do not invest in a specific persons business, you read borrower

profiles on the Microplace Web site to see the types of projects youre funding.

KIVA.ORG partners with 126 microlending institutions in the US, South America,

Central America, Asia, eastern Europe, Africa, and the Middle East. With Kiva, you

can make a specific person-to-person connection with an entrepreneur you wish

to assist, in any amount larger than $25. Note that Kiva does not provide interest

payments to lenders. Any interest charges attached to the loan by Kivas partners

in the field are used to cover their costs associated with the administration of your

loan. Your loan will be paid back in increments, within six months to one year.



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FIND THE R IGHT CO MMU NITY BANKING AND INVESTING VEHICL ES FO R Y O U .

RESOURCES

Community DevelopmentBanks and Credit Unions

These institutions operate much liketraditional banks and credit unions, butwith a special focus on providing capital torebuild low-income communities.

Albina Community Bank cc *Portland, OR; 503/287-7537www.albinabank.com

Alternatives Federal Credit Union cc

Ithaca, NY; 607/273-4611www.alternatives.org

Broadway Federal Bank *Los Angeles, CA; 323/634-1700www.broadwayfederalbank.com

Carver Federal Savings Bank *New York, NY; 718/230-2900www.carverbank.com

Central Bank of Kansas City *Kansas City, MO; 816/483-1210www.centralbankkc.com

City First Bank of DC *

Washington, DC; 202/243-7100www.cityfirstbank.com

City National Bank of New Jersey *Newark, NJ; 800/966-8262www.citynatbank.com

Community Bank of the Bay *Oakland, CA; 510/433-5400www.communitybankbay.com

Community Capital Bank of Virginia *Christianburg, VA; 540/260-3126www.vacommunitycapital.org

First American International Bank *New York, NY; 718/871-8338; www.faib.com

Franklin National Bank mMinneapolis, MN; 651/259-2221www.franklinbankmpls.com

Guaranty Bank and Trust *Belzoni, MS; 800/859-9825www.gbtonline.com

Hope Community Credit Union mJackson, MS; 601/944-1100; www.hopecu.org

International Bank of Chicago *Stone Park, IL; 773/769-2899www.inbk.com

Legacy Bank *Milwaukee, WI; 414/343-6900www.legacybancorp.com

Louisville Community

Development Bankm

*Louisville, KY; 502/775-2521www.morethanabank.com

Lower East Side Peoples Credit UnionNew York, NY; 212/529-8197www.lespeoples.org

Mission Community Bank *San Luis Obispo, CA; 805/782-5000www.missioncommunitybank.com

Mission Valley Bank *Sun Valley, CA; 818/394-2300www.missionvalleybank.com

Native American Bank *Denver, CO; 800/368-8894: www.nabna.com

Neighborhood National Bank *National City, CA; 619/789-4400www.mynnb.com

New Resource Bankm

San Francisco, CA; 415/995-8100www.newresourcebank.com

One PacificCoast Bank cc (formerlyShoreBank Pacific): Ilwaco, WA;888/326-2265; www.eco-bank.com

One United Bank * Boston, MA;Los Angeles, CA; Miami, FL; 323/290-4848www.oneunited.com

Pan American Bank m *Chicago, IL; 773/254-9700www.panamerbank.com

Park Midway Bank m *St. Paul, MN; 651/259-2221www.parkmidwaybank.com

Permaculture Credit Union m ccSanta Fe, NM; 866/954-3479www.pcuonline.org

Santa Cruz Community Credit Union mSanta Cruz, CA; 831/460-2342www.scruzccu.org

Self-Help Credit Union mDurham, NC; 919/956-4400www.self-help.org

Southern Bancorp *

Arkadelphia, AR; 870/246-3945www.southernbancorp.com

University National Bank m *St. Paul, MN; 651/259-2221www.universitybank.com

Urban Partnership Bank * (formerlyShoreBank); Chicago, IL; Cleveland, OH;Detroit, MI; 800/669-7725; www.sbk.com

Wainwright Bank and Trust m * ccBoston, MA; 617/478-4000www.wainwrightbank.com(merging with Eastern Bank in spring 2011)

Use the following sample resources to direct more of your banking dollars checking, saving, investments, etc. into community development.Institutions marked with the symbol m are approved members of Green Americas Green Business Network and our colleague organization,the Social Investment Forum (SIF). Banks marked with an aster isk (*) are members of the Community Development Bankers Association(www.cdbanks.org), and the notation cc indicates that the bank or credit union also has a credit card available (see the sidebar, facing page).

GET YOUR COMMUNITIES INVOLVED

Its not just individuals who can invest in communities. If you have influence over

how your workplace, faith community, or other community group does its banking,

you can encourage these groups to break up with their bank and move to a CDFI.

Our allies provide the following resources for encouraging other groups to use their

investment dollars to help build communities.

Community Investing Toolkit for the Faith CommunityPublished by the Social Investment Forum, this toolkit can be downloaded at

www.socialinvest.org/resources/pubs (scroll down).

Responsible Endowment Coalitions Move Our Money Campaign This campaign provides resources and a handbook for shifting your college or

university toward community investing.

www.endowmentethics.org/community-investment-campaign

www.endowmentethics.org/handbook


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Green Americas Community Investing Guidem Designates an approved member of Green Americas Green Business Network

Community DevelopmentLoan Funds

Community development loan funds operatein specific geographic areas and poolinvestments and loans provided by individualsand institutions, often at below-market rates,to further community development.

Boston Community Capital mBoston, MA; 617/427-3640www.bostoncommunitycapital.org

Bridgeway Capital, Inc. mPittsburgh, PA; 412/201-2450www.bridgewaycapital.org

Calvert Social Investment Foundation mBethesda, MD; 800/248-0337www.calvertfoundation.org

Capital District Community Loan FundAlbany, NY; 518/436-8586www.cdclf.org

Chicago Community Loan Fund m

Chicago, IL; 312/252-0440www.cclfchicago.org

Coastal Enterprises, Inc. mWiscasset, ME; 207/882-7552www.ceimaine.org

Colorado Enterprise Fund mDenver, CO; 303/860-0242www.coloradoenterprisefund.org

Community Reinvestment Fund mMinneapolis, MN; 800/475-3050www.crfusa.com

Cooperative Fund of New England m

Amherst, MA; 800/818-7833www.coopfund.coop

Enterprise Corporation of the Delta mJackson, MS; 601/944-1100;www.ecd.org

Finance Fund m Columbus, OH;800/959-2333; www.financefund.org

First Nations Oweesta Corp. mRapid City, SD; 605/342-3770www.oweesta.org

Florida Community Loan Fund mOrlando, FL; 407/246-0846; www.fclf.org

Leviticus 25:23 Alternative Fund, Inc. mElmsford, NY; 914/606-9003www.leviticusfund.org

Mercy Loan FundDenver, CO; 303/830-3386www.mercyhousing.org

Michigan Interfaith Trust Fund mLansing, MI; 517/372-6001www.interfaithtrust.org

New Generation Energy, Inc. mBoston, MA; 617/624-3688www.newgenerationenergy.org

NH Community Loan Fund m

Concord, NH; 603/224-6669www.communityloanfund.org

New Jersey Community Capital mTrenton, NJ; 609/989-7766www.newjerseycommunitycapital.com

Nonprofit Finance Fund mNew York, NY; 212/868-6710www.nonprofitfinancefund.org

Northcountry CooperativeDevelopment Fund mMinneapolis, MN; 612/331-9103www.ncdf.org

N. California Community Loan Fund mSan Francisco, CA; 415/392-8215www.ncclf.org

Opportunity Finance Network mPhiladelphia, PA; 215/923-4754www.opportunityfinance.org

The Reinvestment Fund mPhiladelphia, PA; 215/574-5800www.TRFund.com

RSF Social Finance mSan Francisco, CA; 415/561-3900www.rsfsocialfinance.org

Self Help Ventures Fund m

Durham, NC; 919/956-4400www.self-help.org

Vermont Community Loan Fund mMontpelier, VT; 802/223-1448www.vclf.org

Washington Area CommunityInvestment Fund mWashington, DC; 202/529-5505www.wacif.org

International FundsThese institutions offer community

development loan funds that focus onproviding capital to low-income individuals incountries around the world.

Calvert Social Investment Foundation mBethesda, MD; 800/248-0337www.calvertfoundation.org(Note: Calvert Community Investment Notes are not loan

funds, but pooled funds, which allow individuals to invest

in small community lenders that may lack the resources to

provide individual investment options.)

Fonkoze mWashington, DC; 202/628-9033www.fonkoze.org

CREDIT CARDS THAT BUILD COMMUNITIES

Each of the following credit cards is issued by one of the banks or credit unions on the

previous page. Cut up your mega-bank credit cards, and use a card that gives back to

communities. The Green America card also directs a portion of your charges back to

Green America, to support our corporate-responsibility and green-economy programs.

Alternatives Federal Credit Union VisaAvailable to residents of Ithaca, NY, Tompkins

County, and contiguous counties .www.alternatives.org

The Loop VisaOne percent of every purchase from this

Albina Community Bank Visa supports

development projects in Portland, OR.

www.albinabank.com

Green America VisaProceeds from this card, issued by One PacificCoastBank, support Green Americas corporate-

responsibility and green-economy programs.

www.eco-bank.com/cards/GreenAmerica.php

Permaculture Credit Union VisaA portion of the proceeds from this card arere-invested in local permaculture projects and

investments in and around Santa Fe, NM.www.pcuonline.org

ReDirect VisaAlso issued by One PacificCoast Bank, half ofthis cards proceeds support carbon offsetsthrough Sustainable Travel Internationals My

Climate program.

www.redirectguide.com/visa

Salmon Nation VisaOne more from One PacificCoast Bank,the Salmon Nation Visa directs a percentageof the proceeds toward protecting thebioregion of the Salmon Nation of thePacific Northwest.

www.salmonnation.com

Self-Help Credit Union cardsThese cards help support Self-Help, whichprovides financial services in traditionally

underserved communities in North Carolina.

www.self-help.org

Wainwright Bank Visa cardsOffered through Elan Financial ServicesCompany, Wainwright offers six different Visa

credit cards with different rates and terms.

www.wainwrightbank.com/html/personal/cards.html


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Grameen FoundationWashington, DC; 202/628-3560www.gfusa.org

Oikocredit mWashington, DC; 202/265-0607www.oikocredit.org

Shared Interest mNew York, NY; 646/442-0182

www.sharedinterest.orgSosteNica mWest Chester, PA; 610/399-5228www.sostenica.org

Working Capital forCommunity Needs mMadison, WI; 888/224-6422www.capitalforcommunities.org

Mutual FundsSocially responsible mutual funds can alsoplay a role in community investing. Each

of the following mutual funds is a leader ininvesting in community development.

Community Capital Management mWeston, FL; 954/217-7999www.ccmfixedincome.com

Domini Social Bond Fund mNew York, NY; 800/762-6814www.domini.com/domini-funds

Praxis Mutual Funds mGoshen, IN; 800/977-2947www.mmapraxis.com

New Alternatives Fund mMelville, NY; 800/423-8383www.newalternativesfund.com

Pax World Mutual Funds mPortsmouth, NH; 800/767-1729

www.paxworld.com

Venture CapitalThese institutions provide financing forsocially responsible ventures and investingopportunities for high-net-worth individuals.

Community Development VentureCapital Alliance mNew York, NY; 212/594-6747www.cdvca.org

E+Co. m

Bloomfield, NJ; 973/680-9100www.eandco.net

SJF Ventures mDurham, NC; 919/530-1177www.sjfund.com

Underdog Ventures mIsland Pond, VT; 802/723-9909www.underdogventures.com

Financial PlannersFind a financial planner who understandshow community investing can fit into yourportfolio by consulting Green Americasgreenpages.org, or the following networks:

First Affirmative Financial Network mColorado Springs, CO; 800/422-7284www.firstaffirmative.com

Progressive Asset Management mOakland, CA; 800/350-1776www.progressive-asset.com

FIND MOREOPTIONS ONLINE

www.cdbanks.org, the Communi ty

Development Bankers Associaition

www.cdcu.coop, the Federation of

Community Development Credit Unions

www.cdfifund.gov, CDFIs certified bythe federal government (click on what we

do>> programs>> CDFI certification)

www.ncif.org, a searchable database

of community development banks with a

housing focus

www.opportunityfinance.net, click

on CDFI locator to find listings

JOIN GREEN AMERICA FOR EVEN MORE RESOURCES

Get more responsible investing and g reen living resources when you join Green America at www.greenamerica.org, by calling

800/58-GREEN, or by mailing in the membership card next to page 13. All Green America members receive a free subscription

to our bi-monthly magazine, the Green American, with its regular Real Green Investing column, as well as free copies of the

National Green Pages and Guide to Socially Responsible Investing(each of which includes directories for socially responsible

investing institutions and professionals). For regular news, resources, and action campaigns from Green America, sign up for our

e-newsletter at www.greenamerica.org/signup, or follow us on Facebook at www.facebook.com/greenamerica.


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The global economic crisis has focused public scrutiny on the predatory practices, gross mismanagement,and outright greed of some of the biggest conventional banks and financial institutions. The housingcrisis has clearly shown what happens when lenders treat borrowers as a means for leveraging greatercorporate profits, providing deceptive and unsound terms and inappropriate products and services.

Add in unemployment, plus diminishing services from state and local governments caught in budgetcrises, and it becomes clear: the work of community development financial institutions(CDFIs) is more important now than ever before.

While not a substitute for a sound governmental economic development policy, CDFIs do provide all of uswith a much better choice for banking and investing. Theyre also uniquely positioned to help commmunitiesin need, because its been their mission for years. Even better, CDFIs on the whole are weathering theeconomic crisis well. We hope this guide helps you to find CDFIs that can serve your banking andinvestment needs while putting your money to good use in the world. Take action with us today.

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The Community Investing Guide is published byGreen America. For more of Green Americaspublications, including our Guide to SociallyResponsible Investing, our bi-monthly magazinethe Green American, and our annual National Green

Pages,join Green America. Call 800/58-GREEN,visit www.greenamerica.org, or mail in themembership card located inside this guide.

Break Up With Your Mega-BankFind community development banks and credit unions (and even credit cards!) that offer you the

same services, or better, as a conventional bank, but without the unfair terms, predatory lending,insane CEO bonuses, and lending to causes you cant support. Break up with your bank, and find acommunity development bank or credit union that supports your values.

Commit to at Least 1% in CommunityBeyond everyday banking, find ways to support communities in need by investing in community

development loan funds, pooled funds, venture capital, or mutual funds with a commitment to com-munities. Help provide access to affordable housing and other vital community services, and supportsmall businesses (including start-up green businesses) that need access to a line of credit to survive.

Spread the WordShare this guide with others. Tell your friends, family, colleagues, and others about community

investing. If you have influence over banking and investing with your faith community, workplace, orother group, consider moving your accounts to a CDFI. And if you use a financial planner, talk to yourplanner about community investing, and encourage your planner to include CDFIs as options for allclients. (Order or download more copies of this guide at www.greenamerica.org/go/CI.)

community investing guide - strengthen local communities and good green business

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