Community Investing

Across America and around the world, many communities lack affordable housing, child care, health care, and jobs that pay a living wage. Putting money into under-served communities as an investment strategy that remedies economic disparity by providing lower-income people access to capital, credit, and training that they otherwise would not have.

Community investing, however, is beyond charity and is a sound investment practice. These investments earn competitive returns, like non-community development investments, but also produce a social return that is attractive to investors and helps communities in need.

How Does Community Investing Work?

Community investing institutions use investor capital to finance or guarantee loans to individuals and organizations that have historically been denied access to capital by traditional financial institutions. These loans are used for housing, small business creation, and education or personal development in the U.S., or are made available to local financial institutions abroad to finance international community development. The community investing institution typically provides training and other types of support and expertise to ensure the success of the loan and its returns for investors.

What Does Community Investing Do?

Community Investing projects are small and local, and work by lending individuals and local groups the capital they need to improve their own communities in a socially positive and environmentally sustainable way. They focus on affordable housing, small business creation, development of community facilities, and the empowerment of women and minorities.

Amidst the sub-prime mortgage meltdown , community investing institutions are unique examples of the right way to engage in the business of lending to the underserved . Services include foreclosure prevention counselling, financial training programs, direct home-lending, financing secondary mortgage market programs, restructuring consumer debt, modifying consumer loans, and managing repossessed properties.