When Kathy Stearns launched her fee-only financial planning and investment management firm about six years ago, she brought her passion for community development investments with her.

Early in her career, she managed and consulted with microfinance programs worldwide at nonprofit Accion International. Also prior to starting her firm, she served as CFO of the Opportunity Finance Network (OFN), a national network of community development financial institutions.

But Stearns, head of Arc Advisers LLC in Boise, Idaho, has found it hard to get clients on board with CDFIs, which help create social impact in distressed markets in exchange for modest financial returns. It’s generally not for lack of social concern—clients tend to seek her out because of her focus on socially responsible investment management. The big challenge, she says, is there are no CDFIs in Idaho that take small investors. And many clients wish to invest locally.

“There really needs to be a personal connection,” says Stearns. “I didn’t realize in the past how strong that aspect was.” So where can clients find community investments that speak to them?

While CDFIs are one option, there are others. Banking locally with community development banks and credit unions is a good start, says Stearns, because they help support poor, local communities. She has also spoken to clients about One PacificCoast Bank, whose targeted lending sectors include affordable housing; sustainable food, fisheries and agriculture; green chemistry; and resource efficiency.

Meanwhile, individual investors can find plenty of CDFI opportunities based in other parts of the U.S. The Reinvestment Fund (TRF), which works across the Mid-Atlantic region, and the New Hampshire Community Loan Fund are two examples highlighted by Stearns.

TRF has financed neighborhood development since 1985 and invests in homes, schools, fresh food access and sustainable energy projects. The 30-year-old New Hampshire Community Loan Fund helps support affordable housing, jobs, child care facilities and community facilities. Each fund has a $1,000 minimum investment.

Food Deserts, Fish And Much More

Mark Pinsky, president and CEO of OFN, encourages investors to invest directly through CDFIs that match their geographical and social interests. OFN also offers a fund aimed primarily at institutional investors.

OFN, which has 210 CDFI members, has strict eligibility criteria. Among other things, members must have an active lending and/or investing history of two or more years and at least one completed financial audit. Half of its 2012 applicants failed to meet its standards. OFN reaches out to help organizations that do not yet qualify, says Pinsky.

First « 1 2 3 » Next