Investing in community, one loan at a time

Investing in community, one loan at a time

BY BBT Staff ON February 8, 2013

A woman in Isla Vista, Calif., was able to find an apartment for herself and her three boys after being turned down repeatedly due to insufficient resources and inadequate credit. Shop owners, artisans, and farmers in Timbio, Colombia, have been able to expand their production and revenue. Northern Lights Community School in Warba, Minn., was able to update its facility and continue its service to nontraditional youth and special needs students.

What do these stories have in common? Each story reveals the benefit of the financial support received in 2012 through a local community development financial institution that includes investments from Brethren Foundation clients. Calvert Foundation operates the fund that connects investors, like BFI clients, with financial institutions that assist borrowers like the mother, artisans, and school above.

Through BFI’s Community Development Investment Fund, each investor has the opportunity to support similar initiatives around the world. By accepting a modest rate of return based on a fixed interest rate offered by Calvert Foundation, investors support development efforts in low-income communities. To put the CDIF’s rate of return into context, BFI’s Short-Term Fund earned 1.9 percent in 2012 after fees, and the CDIF earned 2.2 percent over the same period. Because the Community Investment Notes are unsecured general obligations of Calvert Foundation, and payment of principal and interest depends solely upon the financial condition of Calvert Foundation, the risk level may be higher than for other similar securities. Accordingly, BFI recommends clients allocate only 1 percent of their invested assets to the CDIF. At the end of 2012, BFI clients had invested $300,000 in the CDIF.

Calvert Foundation investors and their financial advisers toured New Orleans to see the transformative "social return" their investments have made.