Many individuals would like to know that their investments are doing some good in the world. One recent survey found that 75% of investors were interested in impact investing. But the $114 billion impact investment market has traditionally been the domain of foundations, institutions and wealthy individuals.
“We are at a tipping point,” says Dorrit Lowsen, chief operating officer & cofounder of the aptly named Change Finance (pictured at right, above). “All the pieces of the puzzle are lining up.” That includes consumer demand and a realization among business leaders that doing good is good business, she says.
Lowsen’s company is among those tapping into public demand and opening up impact investing to all investors. We write about crowdfunding a lot on this site, so here’s a rundown of some of other new populist ways to do good while doing well:
Low Impact Investment Fund
The Low-Income Investment Fund (LIIF), a San Francisco-based community development financial institution (CDFI), has been investing in low-income communities for over 30 years. Its loans support affordable housing, high quality schools, child care centers, health centers and other community facilities that benefit low income people and communities.
It used to be that only institutions and individuals able to write big checks could invest in its funds. Now the nonprofit lender has created the LIIF Impact Note, which has a minimum investment of $1,000 and is open to all. The note follows in the footsteps of mission-based lenders like Calvert Foundation and RSF Social Finance, who were among the first to create widely available notes for the so-called “retail” market.
The interest rate on the LIIF Impact Note varies from 1% for a 6-month note to 3% for a 10-year note. It is available on ImpactUS, a broker dealer “impact marketplace” that handles the back end for LIIF and other CDFIs. The LIIF note is among the first offerings on the site available to non-accredited investors.
Impact area: Low-income communities
Return: 1% – 3% interest
Want access to a broader range of CDFIs? CNote makes that easy.
The startup was founded by Cat Berman and Yuliya Tarasava to solve twin problems they saw in the market. On one hand, many people (especially women) have money sitting in low- or no-interest savings accounts that is being eaten away by inflation.
On the other, many CDFIs have had to turn away individual investors because they’re not equipped to handle lots of small investments. Instead, they raise money from banks that need to fulfill their Community Reinvestment Act mandates, grants and from wealthy investors.
CNote solves those problems by acting as a bridge between individual investors and CDFIs, pooling small investments from individuals and channeling them to partner CDFIs. It launched last year for accredited investors, but only began accepting investments from unaccredited investors (those with a net worth of less than $1 million or an income under $200,000) in September after being approved to do so by the Securities & Exchange Commission.
The full and original article can be viewed on Locavesting.com
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