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Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
of digitization. To see the full publication please search online or
visit the Clinton Presidential Library's Research Room.
"Exhibition Fair Community Investment Tuesday June 15 1999
3:45 PM- 5:00 PM:, 28pgs.
Making a Profit
While Making a Difference
EXHIBIT N ON FAIR
Community
Investment
Tuesday, June 15, 1999
3:45 PM - 5:00 PM
For Immediate Release
Contact: Dianne Saenz
April 20, 1999
301/657-7082
AMERITAS INVESTS $2 MILLION IN CALVERT SOCIAL INVESTMENT FOUNDATION
Large Investment Allows Calvert Social Investment Foundation to Create
Affordable Housing, Jobs and Opportunity for Low-Income Communities Worldwide
Bethesda, MD, April 20, 1999 - Calvert Social Investment Foundation (Calvert
Foundation) recently received a $2 million investment from Ameritas Life Insurance
Corp. of Lincoln, Nebraska to support disadvantaged communities. These new funds
strengthen the Calvert Foundation's ability, through its many community partners, to
help improve the quality of life for low-income families.
"We are delighted to help the Calvert Foundation, the leading innovator in community
investment, broaden its reach to more communities," said Larry Arth, Chairman of the
Board and Chief Executive Officer, Ameritas Life Insurance Corp.
Last month, Calvert Foundation selected 14 partners to receive nearly $2,000,000 in
first quarter 1999 community investments. These non-profit community organizations
span the globe, working hard to alleviate poverty through microcredit lending and
innovative community development financing. Among the list of non-profit investment
recipients were the Catholic Relief Services ($250,000), Self Help Ventures Fund of
Durham, NC, ($300,000) and the Ohio Community Development Finance Fund
($500,000). (A complete list of community investment recipients follows.)
"With its generous investment, Ameritas demonstrates it understands that community
investment leverages investor resources. With a small philanthropic contribution of
forgone interest, the full value of principal is put to work, building affordable homes,
financing small business and funding community development facilities," said Calvert
Foundation Investment Committee Chair and First Nations Development Institute
Director, Rebecca Adamson.
The loan recipients provide expertise and services to their individual communities using
the funds provided by Calvert Foundation. For example, Self-Help Ventures Fund is a
non-profit revolving loan fund in North Carolina. Its mission is to increase ownership
opportunities for low-income borrowers on the premise that ownership - and the assets
ownership creates - enables these borrowers to improve their economic security. It
also provides management assistance to commercial borrowers and oversees Self-
Help's real estate development, home loan secondary market project, and lending to
nonprofits and human service providers. It has provided more than $240 million in
financing to help minorities, women, rural residents and low-income families buy homes,
build businesses and strengthen community services.
- more -
Ameritas Investment/2
As of July 1998, Self-Help Ventures Fund had made commercial loans, typically $5,000
or less, to more than 1,500 small businesses and nonprofits. Its home loans have
assisted nearly 1,000 homebuyers. Its secondary market purchases have resulted in an
additional 1,800 families purchasing homes. Self-Help's Community Facilities Fund has
helped to create and maintain 2,100 childcare spaces, 700 charter school spaces and
105 housing spaces. Despite its focus on low-income borrowers with few financial
resources, Self-Help's loan losses average less than 1%, comparable to successful
commercial banks.
Another Calvert Foundation partner, the Ohio Community Development Fund
(OCDF), serves local community based development organizations in Ohio by
developing partnerships with them, banks and high net worth investors to increase
financing for community housing and economic development projects. OCDF also
provides grants for housing pre-development and non-profit facilities planning such as
childcare centers. OCDF's major program is the "Linked Development Deposits for
Affordable Housing" program. Deposits from institutions such as the Calvert Foundation
generate commercial rates of interest, which in turn subsidize interest rates on long
term fixed rate mortgages offered by participating lenders to low-income homeowners
and community groups.
In 1998, OCDF developed 122 projects, including 76 predevelopment projects (with 817
housing units), 32 Head Start and childcare facilities, and 13 economic development
projects. The Calvert Foundation's deposits fund projects that support affordable
housing, commercial revitalization, a regional food bank, and a homeless single room
occupancy facility.
Ameritas Life Insurance Corp. has a long history of corporate citizenship. It promotes
economic security of families and businesses through long-term savings and investment
vehicles, and is one of the nation's largest providers of group dental products and
services. The company is also a major underwriter of Nebraska municipal bonds that
fund local schools and community infrastructure.
Calvert Foundation Chairman Wayne Silby said, "Community investing allows people of
few means to share in the nation's current economic prosperity."
Calvert Foundation acts as a bridge between capital markets and disadvantaged
communities. Individual and institutional investors in Calvert community investments
benefit from security enhancements, diversification, rigorous due diligence and close
monitoring of portfolios of more than $20 million. The Calvert Foundation has lent
more than $9 million to 70 community partners throughout the United States and
abroad.
A 501(c)3 non-profit organization, the Calvert Foundation was launched in 1995, with
generous support from The Acacia Group, Calvert Group, Ltd.* (Calvert Group is a
separate, for-profit, legal entity.)
- more -
Ameritas Investment/3
and the Ford, MacArthur and Mott Foundations. *Calvert Group offers a family of 26
mutual funds, including 8 socially and environmentally responsible investment options.
Acacia and Ameritas merged their respective mutual holding companies on January 1,
1999.
Acacia Group Chairman and Chief Executive Officer Charles T. Nason added, "Acacia
is committed to serving all communities nationwide, especially the neediest, and
applauds the exceptional work and impact of the Calvert Foundation."
Calvert Foundation helps investors create an asset allocation that has its return
generated not just in dollars - but in jobs created, houses built and in lives transformed.
CALVERT FOUNDATION
COMMUNITY INVESTMENTS FOR FIRST QUARTER 1999
Name
Location
Sector
Approved
Total
Support
Northeast Entrepreneur
North Virginia, MN
Small Business and
$50,000
$100,000
Fund
Microenterprise
St. Ambrose Housing
Baltimore, MD
Affordable Housing
$50,000
$75,000
Aid Center
Women's Self-
Chicago, IL
Microenterprise
$50,000
$50,000
Employment Project
Cascadia Revolving
Seattle, WA
Small Business and Technical
$100,000
$200,000
Loan Fund
Assistance
Central City Concern
Portland, OR
Affordable Housing and Job
$100,000
$300,000
Training
Oakland Business
Oakland, CA
Small Business and Job
$25,000
$50,000
Development Corp.
Training
Self Help Ventures Fund
Durham, NC
Affordable Housing and Small
$300,000
$500,000
Business
Centro de Fomento a
International - La
Small Business and
$100,000
$100,000
Iniciativas (FIE) - Bolivia
Paz, Bolivia
Microenterprise
PRODEM Private
International - La
Microenterprise
$100,000
$100,000
Financial Fund - Bolivia
Paz, Bolivia
Ecumenical
New York, NY
Small Business and
$100,000
$100,000
Development
US Headquarters
Microenterprise
Cooperative Society
(EDCS)
Dudley Street
Boston, MA
Affordable Housing and
$100,000
$100,000
Neighborhood Initiative
Economic Development
Inglewood Neighborhood
Inglewood, CA
Affordable Housing and
$100,000
$100,000
Housing
Economic Development
Catholic Relief Services
Baltimore, MD
Microenterprise
$250,000
$250,000
Ohio Community
Columbus, OH
Affordable Housing and
$500,000
$500,000
Development Finance
Economic Development
Fund
Total Disbursements for the First Quarter 1999:
$1,925,000
###
Investing for
a Better World
A Publication of
Trittium Asset Management
May, 1999
Calvert Leads Social Funds in
Vol. 12, No. 5
Community Investment
INSIDE
By Eric Becker & Holly Davenport
Social investment professionals throw
its that provide crucial social services.
around the metaphor of social investing as
Social investors can participate in commu-
Massachusetts
a three-legged stool so frequently that you
nity investment by: investing certificates of
Burma Law Case
would think many had apprenticed as fur-
deposit, checking accounts, savings ac-
Page 2
niture makers or professional wrestlers. The
counts, and money market accounts at
three legs represent social screening, share-
community development banks or credit
holder advocacy, and community invest-
unions; making direct loans to community
Milt Moskawitz
ment, all of which are fundamental to the
development loan funds or to a pooled ve-
Two Views of
mission of social investing. In this issue we
hicle such as the Calvert Foundation's
look at what social mutual funds have ac-
Globalization: A New Way
Community Investment Notes; and invest-
for Corporations to
complished in the community investment
ing in social mutual funds that allocate a
Colonize the Earth and
arena and what challenges they face going
percentage of their assets to community de-
forward.
Simply the Wave of
velopment investments.
Future. page
Community investment refers to invest-
We surveyed the managers of social funds
ment vehicles that channel funds to non-
to find out how much money they have in-
Shareho
profit loan funds, community development
vested in community investment vehicles,
Activism
banks, community development credit
what their largest investments are, and
Baker Hughes questioned
unions and community development cor-
what they plan to do in the future. Unfor-
on Burma
porations. Community investment makes
tunately, the answers were for the most
capital available to these organizations at
part very sparse, reflecting the barriers to
market or below-market interest rates. The
community investment that the funds have
organizations can then turn around and
encountered. The clear leader among social
lend the money out for affordable housing,
funds in this area is Calvert Group.
microenterprises (very small businesses),
small businesses, and community non-prof-
The Calvert Group sees its work in this area
Continues on page 5
Socially responsible investing is now taking a
environmental justice. Panels comprised of tabor
Dear
new and exciting political turn. The political map
and community leaders addressed matters such as
Reader
upon which we sit indicates that right now social
educational reform and political coalition building
investors are located smack in the middle of
around issues such as "living wage" legislation.
environmental concerns and just next door to those
"Living wage" legislation refers to a series of
groups concerned about community matters of
state and local laws mandating that public
social justice and social equity. Organized labor has
contractors pay their employees living wages and
always been in the neighborhood - typically down
not just minimum wages. They have been very
the street. But it now looks as if everyone is about
successful wherever they have been implemented
to relocate a bit. The new slight geographic shift
and the cost to the public budget appears small at
may nonetheless prove to be seismic in its impact.
best. On the other hand the contribution of good
Last month Joan Bavaria, Carol O'Cleireacain
paychecks to residents of low-income
Elliott Sclar
and I took part in a conference at Columbia
communities has been large.
University designed to foster labor and
But the glue that by common assent held the
community cooperation on matters of social and
most promise of blending community and labor
continues on page 8
IFBW
Community Investments (Cont.)
continued from page 1
Social Change Impact
as a model for other SRI leaders to build
munity Investment is thoroughly reviewed
Ratings for SRI Funds
upon. They have been working in close
annually by the Foundation's analysts to
Eách socially responsible mutual
partnership with the separate Calvert
insure that the group remains financially
fund has its-own social screens and
Foundation to develop, and make accessi-
strong and continues to maintain its social
employs its own methods to deter-
ble, quality information about its portfolio
impact.
mine the social value of each invest-
groups and community investment. Profiles
of community development loan funds and
The Calvert Group has over $13.5 million
ment. Some funds emphasize
searching for companies with posi-
other alternative investment vehicles can
invested in community development fi-
tive social values and take on active
be found at the Foundation's web site
nance programs through the HSII program.
role in promoting social change
www.calvertgroup.com/foundation.
Currently, the Calvert Social Investment
through shareholder resolutions and
Fund Managed Growth, Bond and Equity
dialogue with corporate decision
Calvert Group's High Social Impact Invest-
Portfolios, and the New Visions Small Cap
makers. Other funds simply avoid in-
ment (HSII) program has worked with the
Fund contain a 1% allocation of HSII. The
vesting in firms or activities deemed
Calvert Foundation to overcome some of
Calvert World Values International Equity
irresponsible. A sketch of our quali-
tative rating system follows:
HSII Asets in Loan
Fund
HSII Assets in CDs
Total HSII Assets
Grade A = Has comprehensive, qual-
Allocation
Funds ($mm)
ity screens that are applied consis-
($mm)
Invested ($mm)
tently. Seeks to invest in firms with
CSIF Managed Growth
1%
$4.85
$0.73
above-average social profiles. Will not
$5.58
invest in firms that are below-aver-
CSIF Bond Portfolio
1%
$0.45
$0.00
$0.45
age in any major social area or the
fund will actively work for improve-
CSIF Equity Portfolio
1%
$1.30
$0.00
$1.30
ment of this concern. Makes high
impact investments such as commu-
Calvert World Values
3%
$3.19
$0.35
$3.54
nity loan funds and/or the fund man-
agement company donates signifi-
Calvert New Vision Small Cap
1%
$2.48
$0.30
$2.78
cant profit to targeted social prob-
lem. Maintains a consistent record
of shareholder activism through reso-
the barriers to incorporating Community
Fund has an allocation of 3% HSII. The in-
lutions and corporate dialogue.
Development Investments into their port-
vestments in HSII are comprised mainly of
Grade B = Some shareholder activ-
folios. The Foundation coordinates the due
non-profit loan funds, but also include in-
ism, some use of influence (letter writ-
diligence and monitoring process. The in-
sured deposits in Community Development
ing, public dialogue). Average screen
vestment committees for the various mutu-
Credit Unions and Banks.
quality or scope. May have greater
al funds can then make informed decisions
regarding the loan funds based on the
While the Calvert Foundation's program is
emphasis on avoiding bad companies
encouraging, our conversations with fund
rather than investing in good compa-
Community Investment Analysts' reports.
nies.
Once the decisions are made, the Founda-
managers indicate that significant barriers
still exist to investment in this area by mu-
Grade C = Minimal or no shareholder
tion places and administers the loans. The
tual funds. Due to these hindrances, man-
activism or use of influence. Screens
Foundation closely monitors the invest-
ments throughout the term. In addition to
agers tend to invest in Community Devel-
are avoidance-based or of limited
opment Bank CDs, rather than make direct
scope. Screens may be applied incon-
evaluating quarterly statements, each Com-
sistently.
continues on page 6
GLOBAL
Assets
a End 3/31
1 year
3 year
5 year
Max. Load
Expenses
Soc. Rating
Telephone
Calvert World Values Inti Equity
$218.7
1.8%
2.2%
11.2%
8.6%
4.75%
1.86%
B+
800/368-2748
Citizens Global Equity
63.6
7.5
26.0
23.1
16.4
0.00
2.20
800/223-7010
MMA Praxis International
35.8
2.1
8.7
N/A
N/A
4.00
2.00
800/977-2947
Lipper Global Fund Ave.
2.8
3.4
12.4
12.9
Attantic Avenue, Boston MA 02111617.423.6655
5
without permission of the publisher
May 1999
IFBW
Community Investments (Cont.)
continued from page 5
investments in loan funds. Some of the
Pax World Fund, with over $800 million
most frequently mentioned obstacles fol-
under management, has invested a total of
low.
$1 million in South Shore Bank. Parnassus
Most equity mutual funds are charged
Fund, with $300 million in assets, has in-
with being fully invested. To take a portion
vested $100,000 each in the Low Income
of the fund and put it into anything other
Housing Fund, Boston Community Loan
than stocks may violate the fund's asset al-
Fund, Cascadia Community Loan Fund,
location guidelines.
and the Institute for Community Econom-
ics. The fund has also invested an aggre-
Mutual funds have cash moving in and
gate of $100,000 in Alternatives Federal
out of the fund necessitating a "sweep" ve-
Credit Union and Self-Help Credit Union.
hicle. Loan funds are not set up for this.
Neuberger Berman's socially screened
For more information
Money market funds can be managed
funds, with an aggregate of $400 million
on community
cheaply. Community Development Loan
in assets, hold $100,000 CDs with Self-
investments:
Funds add significantly to the cost of man-
Help Credit Union and Community Capital
aging the fund versus a money market ve-
Bank. New Alternatives Fund maintains
The Social Investment Forum
hicle.
$100,000 investments at South Shore
1612 K Street NW, Suite 650
Bank, Alternatives Federal Credit Union,
Fund managers also cite a lack of avail-
Washington, DC 20006
Vermont National Bank and Community
able due diligence.
www.socialinvest.org
Capital Bank.
Most other social funds have limited their
As an index fund, the Domini Social Equi-
The Calvert Social
community investments to holding CDs
ty Fund must be fully invested in stocks,
Investment Foundation
from community development banks or
so it cannot make community invest-
4550 Montgomery Ave.
credit unions. Calvert is alone in having
ments. But Domini does offer the Domini
Bethesda, MD 20814
invested over $12 million in community
Money Market Account, which is fully in-
www.calvertgroup.com/
loan funds via the Calvert Foundation. For
vested in South Shore Bank. This differs
foundation
example, the Calvert SIF Managed Growth
from Citizens Funds' Working Assets Mon-
Fund has invested $4.85 million in 30 dif-
ey Market Fund, which invests in short-
National Community Capital
ferent loan funds, including $500,000 in
term debt instruments of socially screened
Association
Boston Community Capital and $400,000
corporations.
924 Cherry Street
in the New Hampshire Community Loan
Philadelphia, PA 19107
Fund. That dwarfs the community invest-
For social investors who want to direct a
www.communitycapital.org
ments made by other large social funds,
greater portion of their assets to communi-
most of which have limited such invest-
ty investments, we suggest looking into
ments to $100,000 each (the maximum
the Calvert Foundation's Community In-
that is federally insured) in a number of
vestment Notes. These instruments allow
community development banks or credit
investors with as little as $1,000 to buy a
unions.
1, 3 or 5-year note at an interest rate of 0-
4% (determined by the investor). The in-
The Dreyfus Third Century Fund, which
vested funds are part of a $9 million pool
has $1.1 billion in assets, recently made its
that is channeled to a range of community
first $100,000 investment in a Self-Help
development financial institutions. Calvert
Credit Union CD. The Citizens Funds,
Community Investment Notes are not fed-
which have over $800 million in assets,
erally insured, but risk is minimized
have invested $100,000 in each of four
through the diversification of the pool's in-
community development financial institu-
vestments.
tions: Self-Help Credit Union, South Shore
Bank, City National Bank of NJ and the
Independence Federal Savings Bank. The
6
May 1999
01999 Trillium Asset Management Corporation
Reproduction in any form is
Community Investment Profiles Request Form
An information service of Calvert Foundation, offered free on an introductory basis.
CHECK BELOW (or circle directly on chart) ALL PROFILES THAT YOU WOULD LIKE DELIVERED TO YOU
ACCN
Accion International
MCAL
McAuley Institute
BOCC
Boston Community Capital
MRCY
Mercy Loan Fund
CASC
Cascadia Revolving Fund
NNFF
Nonprofit Facilities Fund
CCCN
Central City Concern
NCDF
Northcountry Cooperative Development Fund
CHCL
Chicago Community Loan Fund
NEEF
Northeast Entrepreneur Fund
CSTL
Coastal Enterprises, Inc.
NSDC
Northeast South Dakota Economic Corporation
DVRF
Delaware Valley Comm. Reinvestment Fund
NCAL
Northern California Community Loan Fund
EDCS
Ecumenical Development Coop. Society
RCAC
Rural Community Assistance Corporation
FAHE
Fed of Appalachian Housing Enterprises
SELF
Self Help Ventures Fund
FNCA
Foundation for Intl Community Assistance
SHRN
Shared Interest
GRMN
Grameen Trust
SHBP
Shorebank Enterprise, Pacific
INCE
Institute for Community Economics
VCLF
Vermont Community Loan Fund
LIHF
Low Income Housing Fund
WSEP
Women's Self-Employment Project
MANA
Manna, Inc.
WCAP
Working Capital
(Note that these are all available on our web site at www.calvertgroup.com/foundation)
Geographic
New
Middle
South
North
NW
South
Pacific
INTER-
West
& Lending
England
Atlantic
East
Central
Central
Central
NW
NATIONAL
CSTL
ACCN
SELF
ACCN
NSDC
ACCN
ACCN
CASC
ACCN
WCAP
WCAP
WCAP
NEEF
SHBP
EDCS
Micro-
VCLF
WSEP
FNCA
credit
GRMN
SHRN
BOCC
DVRF
FAHE
CHCL
INCE
INCE
INCE
CASC
SHRN
CSTL
FAHE
INCE
INCE
LIHF
MCAL
LIHF
CCCN
Affordable
INCE
INCE
MCAL
MCAL
MCAL
MRCY
MCAL
INCE
Housing
MCAL
LIHF
MRCY
MRCY
MRCY
RCAC
MRCY
MCAL
MRCY
MANA
SELF
NCDF
NCDF
NCAL
MRCY
MCAL
RCAC
RCAC
RCAC
MRCY
SHBP
CSTL
DVRF
INCE
CHCL
INCE
INCE
INCE
CASC
INCE
INCE
SELF
INCE
NSDC
NCAL
INCE
Small
VCLF
NCDF
SHBP
Business
NEEF
WSEP
BOCC
DVRF
FAHE
CHCL
INCE
INCE
INCE
CASC
EDCS
Commun.
CSTL
INCE
INCE
INCE
LIHF
RCAC
LIHF
CCCN
SHRN
Develop.*
INCE
LIHF
SELF
NCDF
NCDF
NCAL
INCE
VCLF
MANA
RCAC
RCAC
RCAC
NNFF
SHBP
*Community Development includes non-profit facilities. environmental. social service, and cooperative lending.
Name:
Indicate if you prefer a mailed profile package with supporting
material, a fax-back set (be advised, each profile is 45 pgs), or as an
Org:
Email (attached Word documents). Please make sure full contact
Address:
info is listed.
Mail
Fax-back
Email
Also, please mail me the following information
Phone:
investment kits for Calvert Community Investment Notes.
Fax:
brochures introducing CCI Notes (one included in above kit).
Email:
information brochures on all Calvert Foundation programs.
FAX-BACK TO 301-654-2960 Or mail to: Calvert Foundation - 4550 Montgomery Ave, Bethesda, MD 20814
COMMUNITY INVESTMENT
Jobs. Homes. Lives. Invest in what matters.
In a world filled with publicly traded securities issued by large corporations -- mutual funds and
derivatives -- it's very easy to lose touch with what your money is actually doing for (or doing to)
the planet on which we live.
It's exactly this disconnect that has been fueling the growth of Community Investing, perhaps
the least well-known sector of Socially Responsible Investing -- and the one which has the most
direct impact on our communities. Amid stories of urban decay, economic dislocation and real
hopelessness, people are putting their money where their hearts are.
Community investment capital flows into non-profit loan funds and community development
banks, credit unions and corporations - hundreds of programs, domestically and internationally.
Individual investors are funding vital community development lending, and financing programs
that enable others to work their way out of poverty, and into jobs and homes. Investors are also
enabling local non-profits and small businesses to maintain the critical facilities that healthy
communities depend on. These investment opportunities vary widely in terms, rates and risk.
What does Community Investment accomplish?
Sustainability comes with empowerment.
The impact of community investing is direct and measurable. In addition to geographic concerns,
you may consider a number of social impact areas when looking at community investment. There
are four primary sectors of lending that community investing supports: Affordable Housing,
Microenterprise, Small Business, and Community Development.
Affordable Housing lending builds or rehabilitates housing for low-income families. Many
programs also provide important and pivotal support in helping individuals secure and repay
mortgages, and even offer training and empowerment programs that help support new
homeowners in other areas.
Teresa Coles worked her way through college and earned her teaching credentials while she and
her children were living at Comstock Apartments, a Mercy Housing property for families in
Nampa, Idaho. Today, Teresa is a new homeowner, thanks to Mercy Housing Lease-Purchase
Program. Mercy houses more than 10,000 low-income and special need residents nationwide. In
the U.S., the gap between the number of affordable housing units and the number of people in
need is 4.7 million -- the largest on record.
Microenterprise Development focuses on assisting low-income people in starting their own
businesses by providing very small loans, less than $25,000. Internationally, loans can be as
small as $50. Some programs lend directly to individuals, while others use a peer-lending model
that binds individuals together in a supportive group of borrowers. Many programs also offer
technical assistance.
Nurjahan from Bangladesh was married at twelve and became a single mother at the age of
thirteen. With the help of Grameen Bank, Nurjahan was able to take out a $180 loan and start a
business selling vegetables. Five years later, she owns land and farm animals. She can now feed
her family and has made a better life for herself.
Small Business Development lending is more traditionally structured and supported than micro-
loans. This category of lending assists low-income people in disadvantaged communities to start
or increase the scope of their own businesses by providing loans generally over $25,000.
Native Seeds has been collecting and preserving endangered plants since 1983, working to
conserve the traditional crops that have sustained Native American peoples. Thanks to " $25,000
loan from the Environmental Support Center, Native Seeds can now prepare the soil and plant
the hundreds of seeds in their seed bank that need to be "grown out" to provide fresh seed stock.
This will ensure that plants like Hopi string beans and Navaho Hubbard squash will survive into
the next century.
Community Development lending supports non-profits and cooperatives that are working
directly with disadvantaged populations and communities to develop enterprises that provide
core social resources, such as health services and daycare centers. Others activities include
banking services in targeted communities and critical funding to non-profits, cooperatives and
environmental programs.
The Mary Neal Child Care Center in Pittsboro, NC was started with technical and financial
assistance from Self Help Credit Union. This nonprofit provides quality childcare from early
morning until after midnight, accommodating parents who work both day and evening shifts.
Thanks to the efforts of a few committed citizens who established this nonprofit facility, this
center gives small children a place where they can learn and grow in a secure environment.
Who puts the Community Investment capital to work?
These are lasting solutions to poverty.
Local community loan programs do the lending and development work, providing the means for
investment capital to impact disadvantaged communities. As a group these organizations are
generally known as Community Development Financial Institutions (CDFIs).
CDFIs range from good sized community banking institutions, to small non-profit
microenterprise lenders with a few hundred borrowers. CDFIs fall into the following categories,
and offer various investment opportunities that vary in terms, rates and risk.
As you move from community banks to credit unions, from development corporations to
community loan funds, all the way through to microcredit programs -- a rich tapestry of
opportunity may be created. Investment capital can reach deep into some of the most
disadvantaged communities across the country and around the world.
Community Development Financial Institutions (loosely defined)
Community Development Banks (CDBs) target disadvantaged communities to provide banking services, loans,
and community revitalization programs. There are only a few CDBs in the United States. They are for-profit
regulated entities with FDIC insurance, and offer insured depository accounts and CDs, most of which have pretty
competitive returns (as much as 5%), and are very safe (FDIC insured to $100.000).
Community Development Credit Unions (CDCUs) are non-profit regulated and insured entities serving their
members in low-income communities. There are more than 200 CDCUs in this country. Like CDBs, these also
offer insured depository accounts and CDs, although tending to be slightly lower in return.
Community Development Corporations (CDCs) are primarily involved in housing, neighborhood revitalization
and community development. They may also have community loan funds within their programs. There are more
than 2000 CDCs active in this country. CDCs often develop their own umbrella of projects, funding and building a
portfolio of deals. Some CDCs accept direct investment from individuals. Offerings tend to be below market rate,
typically ranging between 0-5%, for terms of 1-5 years. They are non-profit, unregulated and uninsured.
Community Development Loan Funds (CDLFs) administer loan funds for community development and various
lending activities, including the environment, housing, small business, and non-profit facilities funding. They
sometimes have limited microenterprise programs, too. CDLFs are able to make loans that banks and credit unions
would hesitate to make, and often partner technical assistance with their capital They are non-profit, unregulated
and uninsured entities. Many CDLFs accept private investment, with similar rates and terms as those offered by
CDCs.
Micro Finance Institutions (MFIs) are non-profit microcredit institutions that are also unregulated and uninsured.
Although microlending has gained much recognition internationally, there are a growing number of programs in
the U.S. MFIs often target some of the poorest of the poor, and may offer technical assistance and employ the
peer-lending model. A few MFIs accept direct uninsured investments.
All of the investment notes and CDs issued by CDFIs are typically illiquid, meaning you have a
set term of investment. Early withdrawals may be possible with some penalties against interest or
principal.
How can I make a community investment?
Creating opportunity, responsibly.
Now that we've seen the what and who of community investing, you may be wondering how to
take the next step. As a potential community investor you can start by clarifying what it is you're
looking for in a community investment:
Decide on the amount that you feel comfortable with (always consult with your financial
advisor) -- and how charitable you can be (market or below-market return, generally between
0-5%). Remember to think of community investing as a piece of the asset allocation pie.
Decide how long your funds can be committed for (usually between 1 and 5 years -- longer
terms allow CDFIs to be more flexible).
Decide where you want your capital put to work - locally, domestically, or internationally,
and what you're most interested in funding: housing, microcredit. small business, or other
forms of community development.
Think carefully about your risk tolerance (e.g. insured or uninsured). Consult with programs
directly to attain current offerings, and always request full documentation.
There is probably a community investing option for almost any combination of the above
concerns, especially if you are willing to be flexible about your rate of return. Once you have
decided on the basic parameters. you will need to determine how to make the actual investment.
There are three distinct options: Direct Investment, Community Investment Portfolios, and
Mutual Funds.
Direct Investment: As previously discussed. many CDFIs accept direct investments from
individuals. All Community Development Banks and Credit Unions offer insured accounts
and CDs, while only some Loan Funds. CDCs and MFIs offer investment notes (all
uninsured). Rates generally fall somewhere between 0%-5%, with terms of 1-5 years, for all
options.
Community Investment Portfolios: Intermediary facilities allow you to purchase a note
that is a piece of a larger pool of CDFI investments. With this option you can reach many
different types of programs at once. Community investment portfolios may benefit from
active monitoring and diversity, and also can have additional security enhancements built in,
though they are not insured. Terms and rates are roughly those of the CDLFs, CDCs and
MFIs they invest in (e.g. 1-5 years and 0-5%).
Mutual Funds: Several mutual funds have a community investment component built right
in. These mutual funds give you a very small percentage exposure to community investment,
one that may or may not effect the overall return of the fund. If you want to make a
substantial commitment to community investment, though, it may be hard to reach the
desired amount with this option (since only a small percentage of every dollar is reaching
CDFIs). Mutual funds do have the attraction of being very liquid, and can be held easily in
brokerage accounts. You have to look closely to find out what, if any, commitment a given
mutual fund has to community investment.
You may even find that the most appealing community investment is not necessarily the one that
has the highest financial rate of return (for instance, a local loan fund in your home town, or one
that supports a social issue close to your heart). The tradeoff here is a slightly lower rate of
financial return, for a higher social return:
A WAY TO THINK ABOUT
"BELOW-MARKET" COMMUNITY INVESTMENT
When you make a
When you invest
$20
$1,000 in a community
donation:
investment at 3%:
You give
You may sacrifice
$20
$20 in interest*
And only that
While your entire
$20
$1,000
goes to work
goes to work helping
helping people.
people help themselves!
*Compared to a T-Bill investment of 5%.
As responsible investors, we must always be concerned about portfolio diversification,
responsible asset allocation, risk. and performance. but we should also be on the lookout for the
human element. Return, in the form of powerful and direct social impact. may be something to
consider. Community investing is an opportunity to align financial resources with one's social
mission, in meaningful and measurable ways.
And, if an investor were to place a modest portion of assets in support of community
investments, it could make little difference in the return on a total portfolio:
SENSITIVITY ANALYSIS ON ANNUAL RETURN
Principal
Annual Return*
Appreciation
1) 90% 60/40 Equity/Bond Investment
$90,000
15.01%
$13,509
10% Traditional cash component
$10,000
4.50%
$450
100% Balanced Portfolio
$100,000
13.96%
$13,959
2) 89% 60/40 Equity/Bond Investment
$89,000
15.01%
$13,359
10% Insured Community Deposits
$10,000
4.50%
$450
1% Below Market Community Invest
$1,000
3.00%
$30
100% Portfolio w/ Community Invest
$100,000
13.84%
$13,839
*Based on the 10yr average return for a balanced portfolio comprised
of 60% S&P 500 equity and 40% Lehman's bond indices. and a 10% cash component of Treasury Bills,
Certificates of Deposit. and Money Market instruments returning an average of 5%.
This example uses below market community investment w/ an average 3% dollar weighted return.
Community investment demonstrates a sustainable partnership between capital and people that
cuts across partisan lines. Regardless of the option you choose, you can have the satisfaction of
knowing that every dollar of your community investment capital is directly partnering with hard
working people down your road, across the country, or around the world -- helping people like
Nurjahan, Teresa Coles, and their families.
[resource listing on reverse
Timothy Freundlich [800-248-0337/[email protected]] is the Program Manager for Calvert
Social Investment Foundation |www.calvertgroup.com/foundationj. Calvert Foundation is a non-profit
community investment facility channeling funds to, and developing information on, 100 CDFIs globally for
individual and institutional investors. Calvert Foundation's Community Investment Profiles service
features an online interactive database allowing users to explore local lenders.
None of the information contained herein should be taken to be investment advice from the author and
is not a solicitation to buy or sell securities.
Websites with Community Investment Information
Calvert Foundation I www.calvertgroup.com/foundation|- portfolio of, and information source about,
CDFIs
Social Investment Forum [ www.socialinvest.orgl- clearinghouse for many community investment
options
SocialFunds.com I www.socialfunds.com|- well organized online resource with tools and educational
sections
Websites of CDFI Umbrella Organizations
Association for Enterprise Opportunity [ www.wwa.com/-aeo|- the national membership organization
for microcredit programs
CDFI Coalition [www.edfi.org]- the national coalition and advocacy group for the CDFI industry with
over 350 members
National Community Capital Association I www.communitycapital.org| umbrella organization for
over 40 CDFIs
National Congress for Community Economic Development [www.ncced.org]- a membership
organization for 800 CDCs
National Federation of Community Development Credit Unions [ www.natfed.org]- membership group
of 200 CDCUs
Calvert
COMMUNITY
INVESTMENTS
Calvert Foundation
Calvert Foundation
4550 Montgomery Avenue
Bethesda, MD 20814
(800) 248-0337
fax (301)654-2960
[email protected]
www.calvertgroup.com/foundation
Clinton Presidential Records
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This marker identifies the place of a publication.
Publications have not been scanned in their entirety for the purpose
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visit the Clinton Presidential Library's Research Room.
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Calvert Social Investment Foundation
CLINTON LIBRARY PHOTOCOPY
Calvert Foundation
4550 Montgomery Avenue
Bethesda, MD 20814
(800) 248-0337
email: [email protected]