Source: LOHAS Weekly Newsletter
Published: Wednesday, December 24, 2003

Investments in community development are the fastest growing type of socially responsible investing in the U.S.

Assets in community-development financial institutions (CDFIs) have nearly doubled during the past two years, according to a Dec. 10 article at SocialFunds.com. The Community Investing Program, a project of the Washington-based Social Investment Forum and Washington-based Co-Op America, say that total assets held by CDFIs in the U.S. increased from $7.6 billion in 2001 to $14 billion in 2003.

Community-development banks, community-development loan funds, community-development credit unions, and community-development venture capital funds are the four types of CDFIs. They invest in projects such as affordable housing and job creation. Investment managers typically allocate CDFI investment through the cash portion of portfolios, according to SocialFunds.com. Thus, investors can earn a market-rate return while also being covered by the Federal Deposit Insurance Corporation, says SocialFunds.com.

"The risk that depositors take is almost nonexistent--there have not been significant failures or losses in this industry," states Jean Pogge, senior VP of mission-based products at Chicago-based ShorBank, a community development bank, via SocialFunds.com.