Community Loan Funds and Community Development Finance Institutions (CDFIs)
Community Loan funds and Community Development Finance Institutions offer endowments cash or fixed income like investments that have a positive impact on the surrounding community. They have a risk/return profile that can make investments suitable for the fixed income or cash portfolio dependent on the tenor of the note or CD. When used as a cash investment, endowments may want to consider laddering investments as the loans made generally have a 1 - 10 year tenor and these investments cannot be sold on the public market.
Many CDFI's are rated by an organization called Aeris which rates both the financial stability and impact of the organization. A few have been rated by Standard & Poors rating agency.
Resources for Learning More
- IEN's Community Investing Roundtables panel recordings (2019 roundtable and 2020 roundtable)
- CDFI Locator - learn more about community development finance institution with and without investible community load funds in your region
- Community Investing | US SIF
- Strategies to Address Climate Change Risk in Low- and Moderate-income Communities | Federal Reserve Bank of San Francisco, 2019
- Higher Education’s Anchor Mission: Measuring Place-Based Engagement l Democracy Collaborative, 2017
- Place-Based Investing for Resilient Rural Development | Croatan Institute, 2016
- Maximizing Returns to Colleges and Communities: A Handbook on Community Investment l Michael E. Swack, University of New Hampshire, 2009
- Place-Based Investing: Creating Sustainable Returns and Strong Communities l Democracy Collaborative
- Expanding the Market for Community Investment In the United States l US SIF, July 2013