Accredited


The term accredited investors refers to wealthy individuals, family offices and organizations such as foundations/endowments and other institutional investors. For individuals to qualify as “accredited”, they must have more than a million dollars in net assets along with several other stipulations required by the Securities and Exchange Commission. Because accredited investors have substantial assets and are more able to tolerate losses on investments than the retail market, these investors have greater flexibility in their financial choices. To find a US SIF member community development financial institution, visit our Financial Services Directory and search by name, category or location.
 
The Expanding the Market for Community Investment in the United States report provides valuable information on ways to attract new accredited and institutional investments.The section on High Net Worth and Institutional Investors in the Options and Innovations in Community Investing report also has more information on this subject. 
 
Cash 
 
Typically, deposits in banks and credit unions with a commitment to community development (many of which are certified by the US Treasury as community development financial institutions, or CDFIs) are considered a vehicle for retail investors.  However, the Certificate of Deposit Account Registry Service (CDARS) can be used by institutional investors to create one large cash deposit that is placed in multiple banks in amounts that qualify for federal deposit insurance. A similar product for credit union deposits is offered by the National Federation of Community Development Credit Unions. It offers a cash-based way to finance small businesses, microenterprises, non-profits, commercial real estate and affordable housing in low-and-middle income communities. More information on community development banks can be found in Doing Business with Community Development Banking Institutions: A Deposits Initiative, by the Initiative for Responsible Investment in collaboration with the National Community Investment Fund.
 
To find a community development bank or credit union, visit
 
 
Fixed Income
 
Calvert Foundation Notes
The Calvert Foundation is a CDFI that offers a securitized note that pools investor funds and lends them to a diversified group of CDFIs, affordable housing developers and international microfinance organizations.  The notes are processed electronically and are widely distributed through conventional investment platforms, making them extremely popular as a community investment vehicle in all investor classes. For more information, visit Calvert Foundation Notes
 
CDFI loan funds 
A number of CDFI and other community development loan funds accept direct investment. The investment is generally executed as a promissory note providing term debt to the organization. Typically the notes are offered under a non-profit exemption from registration at the state level. Because such notes are not registered and are therefore considered unregulated, they are not currently distributed through conventional investment industry channels. However, several CDFI loan funds, along with affordable housing organizations, are working to increase their visibility and are now offering registered (as exempt non-profits) products in some states.
 
To find a CDFI loan fund, please visit the Opportunity Finance Network Member Directory and CDFI Coverage Map. To find rated CDFI's, Aeris Insight offers a CDFI Selector.

Bond strategies with a strong community investing component
Another fairly common community investment vehicle is a community development bond strategy, structured either as a mutual fund or a separately managed account. These strategies bundle government-backed affordable housing, business financing and municipal bonds.  The securities were first developed to facilitate investments in low-income census tracts--investments that banks are required to make under the Community Reinvestment Act (CRA). They have grown in popularity with non-bank investors who like the combination of impact, return and security these bonds offer.  These bond funds are often referred to as “CRA bonds” or “social bonds".
 
There are also other mutual funds, particularly those that specialize in fixed income, that include community development investments into their portfolio mix. For more information, please visit the 2016 Report on US Sustainable, Responsible and Impact Investing Trends.
 
To find a bond fund or mutual fund with community investment, please visit our SRI Separate Account Managers guide or SRI Mutual Fund Performance Chart.

Microfinance and investments in small business finance entities
Microfinance organizations make small loans to help very small businesses, especially in the poorest parts of the world. These international or internationally focused organizations provide loans, debt guarantees and technical assistance to businesses, affordable housing providers, smallholder farmers and agricultural cooperatives. A growing number of microfinance organizations exist in the United States. Organized as both for-profit and non-profit entities, there are also a number of intermediaries that pool investor funds and re-lend them to microfinance organizations. For more information, visit Microfinance Gateway

In addition, there are growing opportunities to invest internationally in small (rather than micro) enterprises such as agricultural institutions and cooperatives. 

 
Private Equity, Real Estate and Other Alternative Investments
 
Investing in a private company (one whose stock is not publicly traded) can put money to work locally and may assist poor and underserved people or offer sustainability impacts. Additionally, investors may become limited partners in a real estate development project or a fund that involves multiple real estate initiatives. Such projects could address affordable housing, green building, transit-oriented development, charter school finance or conservation real estate.  Accredited investors and institutions can participate in virtually any legal fund structure that meets their impact goals, and many innovative funds have responded. Finally, desired impact goals can often be achieved, and customized, through separately managed accounts. 
 
To find a private equity opportunity, visit
 
 
Public Equity
 
Institutional investors can purchase equities screened for sound community investment practice through the State Street Global Advisors US Community Investment Index (USCII).  Originally developed by the F.B. Heron Foundation, the index includes more than 300 large- and mid-cap companies in diverse sectors screened for workforce development, wealth creation and community engagement and corporate philanthropy in economically underserved populations. More information is available at Mission Investors case study on the F.B. Heron Foundation.