One of the funds Trillium likes is Boston Community Capital's (BCC) Boston Community Loan Fund. BCC's Stabilizing Urban Neighborhoods initiative helps homeowners who've gone into foreclosure on predatory lending mortgages try to repurchase their homes. Rice likes that BCC educates borrowers about mortgages. "Financial literacy and technical assistance are as important as lending money," he says.

Another holding is the North Carolina-based Self-Help Credit Union. It's been working with the Center for Responsible Lending to try to regulate payday lenders who make short-term, unsecured loans to people with cash flow difficulties.

Due Diligence
Trillium can place investments that support microfinance and community lending on six continents, says Rice. Some international organizations it works with include Accion International, Oikocredit, Shared Interest and Root Capital.

On the home front, clients can select state-specific loan funds or target specific need areas. For example, clients who want to have an impact in Native American communities can invest in First Nations Oweesta Corp., the Lakota Fund or Native American Bank.

Rice says expected returns on domestic and international loan funds are averaging 2% to 2.5%. Trillium portfolio manager Elizabeth Levy says clients often see this part of their portfolio quite differently and may accept below-market returns.

Financial due diligence is very important for community loan funds because they're uninsured, unsecured and aren't SEC-registered, says Levy, who performs credit risk analysis. She examines their ability to meet interest and principal payments for investors as well as their rollover rates, balance sheets, repayment histories, loan loss reserves and accounting policies. Trillium strongly encourages CDFI loan funds to get rated by CARS, the CDFI Assessment and Ratings System, which looks at financial and social impact.

More risk-adverse investors may opt for instruments from FDIC-insured community banks or National Credit Union Administration-insured credit unions.

Investors don't have to be accredited to do community investing in these types of vehicles, but most of Trillium's clients are accredited. Minimum investments range from $10,000 for banks and credit unions to $50,000 for loan funds.

Non-accredited investors can do community investing through various sources including Calvert Foundation's community investment notes (an electronically-traded pooled asset vehicle that's in Trillium's portfolio), MicroPlace (an Ebay company that pays interest) or Kiva (a non-profit that provides peer-to-peer lending), says Rice.

Calvert's community investment notes have a $5,000 minimum investment.