Check out this press release from U.S. SIF singing the praises of community investment and predicting its continued rise in the latter half of 2011 and beyond. As REC launches its national community investment campaign, it's clear the momentum is building! EXPERTS: AS TRADITIONAL BANKS FAIL TO MEET MORE AND MORE LOCAL NEEDS, COMMUNITY INVESTING POISED TO BREAK THROUGH TO MAINSTREAM IN 2011 Already One of the Fastest-Growing Aspects of Socially Responsible and Sustainable Investing, Community Investing’s Continued Rise Seen As Fueled by 3 Major Trends Among Consumers, Institutions. WASHINGTON, D.C.///April 13, 2011///
”Community investing” is already the unsung hero in thousands of towns and neighborhoods across America, where it quietly has added jobs, local services and support for small businesses where traditional lenders have been unable or unwilling to do so. In 2011, community investing is poised to become much more widely visible as a result of three trends that could boost related investments from individuals and institutions, according to experts from the Social Investment Forum, Green America, One PacificCoast Bank and the National Federation of Community Development Credit Unions.
Community investment involves capital from investors and lenders that is directed, typically via community development financial institutions (CDFIs) and other community investing institutions, to communities and individuals that are underserved by traditional financial services. According to a major 2010 Social Investment Forum Foundation report (the most recent data set currently available), assets in community investing institutions rose more than 60 percent from $25 billion in 2007 to $41.7 billion at the start of 2010, reflecting healthy growth in all four categories of community investing institutions: community development banks, community development credit unions, community development loan funds and community development venture capital funds.* (For more information, see http://www.socialinvest.org/resources/research/documents/2010TrendsES.pdf
In a news conference today, experts from the Social Investment Forum, Green America, One PacificCoast Bank and the National Federation of Community Development Credit Unions identified three trends expected to continue leading to a surge in community investing assets in 2011:
Rising institutional interest in community investing. The latest SIF Trends report shows that institutions in several categories are now investing more in community investing, thanks in part to SIF’s education and outreach efforts around this issue to financial advisors, investment managers and religious institutions. According to new data from the Sustainable Endowments Institute, colleges and universities are now among the leaders in moving assets into community investing. Major institutions that have recently turned their attention to community investing include Mount Holyoke, Macalester College, Dickinson, Lehigh, Vanderbilt, and Skidmore.
Growing consumer awareness of community investing success stories. Most CDFI banks were formed after 1994, initially as small institutions to serve communities that had little access to financial institutions and services. Over the past decades, these institutions have grown at a greater rate than conventional banks of the same size as they have met pent-up demand. An example of this demand: In a recent one-month period, Green America received nearly 15,000 orders and downloads for its new Guide to Community Investing, which helps individual investors take part in this fast-growing field. (See http://www.greenamerica.org/socialinvesting/communityinvesting/orderguide.cfm.) This is where success breeds more success: As community investing institutions meet local demands, they attract additional assets from individuals and institutions wanting to be part of such positive change and help local institutions to flourish.
Fran Teplitz, director
of social investing & strategic outreach
, Green America said: “The fact that community investing has grown steadily over the past decade, despite fears of capital constraints and the impacts of the market downturn, is a strong indicator for future growth. Add to that consumers’ continuing frustration around mega-banks, and the growing movement to support local economies, and we’re likely to see continued growth of CI in 2011 and beyond.”
Meg Voorhes, deputy director and research director, Social Investment Forum, said: “For many years, investment managers and advisors specializing in socially responsible investing have helped clients allocate a portion of their portfolios to community investing. It is exciting to see a new wave of interest in community investing as foundations and other institutions look for investments that will have high social impact.”
Cliff Rosenthal, president and CEO, National Federation of Community Development Credit Unions, and a member of the board of directors of the Social Investment Forum, said: “Many Community Development Credit Unions and other CDFIs have played a crucial role throughout the recession in providing credit to borrowers who were shut out of the conventional capital markets.”
Kat Taylor, founding director, One PacificCoast Bank, said: "We believe that Beneficial Banking -- providing fair and transparent transactional and savings services and loan capital for business and job growth in all communities -- is what all banks should deliver for the privilege of federal deposit insurance. In particular, we focus on lending that supports clean technology solutions, regenerative agriculture and natural resource use, critical community institutions, job growth and a living wage, as well as the resilience of consumers in times of setback. Banking that supports people and the planet will be critical in serving the nation as a whole as well as marginalized communities in order to move toward reliable prosperity for all. We understand that a bank cannot measure success and sustainability by focusing on profits alone, which is why community development financial institutions are so important.” BACKGROUND: THE RISE OF COMMUNITY INVESTING
According to the Social Investment Forum’s 2010 data, top-level trends in community investing include the following:
- Assets in Community Development Banks grew to $17.3 billion by yearend 2009, up 34 percent from the 2006 total of $12.9 billion and sixfold from $2.9 billion in 1999.
- Assets in Community Development Credit Unions grew to $11.1 billion at the end of 2009, up 76 percent from $6.3 billion in 2006 and by more than a factor of 18 since 1999, when they stood at $610 million.
- Assets in Community Development Loan Funds grew to approximately $11.3 billion at the end of 2009, up approximately 145 percent from $4.6 billion in 2006 and more than six times from $1.7 billion in 1999. Of the 2009 total, approximately $2.2 billion are in US-based international microfinance funds that provide or guarantee loans for small-business creation and community development abroad.*
- Assets in Community Development Venture Capital Funds grew to $2 billion in 2009, an increase of 67 percent from $1.2 billion in yearend 2006 and 1200 percent from $150 million in 1999.
A major factor in CDFIs’ asset growth has been the capital they have received from the US government, as well as foundations and other institutional investors. US Treasury programs stepped up assistance to CDFIs in 2009 as part of US government economic stimulus and recovery programs. In recent years, a number of campaigns, touting such concepts as “program-related investing” and “impact investing” have helped to increase awareness among foundations, other institutional investors and high-net-worth individuals of the high social impact associated with community investing strategies. However, the threat of a pullback in federal support for CDFIs has the potential to put a crimp in the rise of community investing as the very point where communities need it the most, according to the experts. ABOUT THE ORGANIZATIONS
Green America is the nation’s leading green economy organization. Founded in 1982, Green America (formerly Co-op America) provides the economic strategies, organizing power and practical tools for businesses and individuals to solve today's social and environmental problems. www.GreenAmerica.org
The Social Investment Forum is the U.S. membership association for professionals, firms, institutions and organizations engaged in socially responsible and sustainable investing (SRI). The Social Investment Forum advances investment practices that consider environmental, social and corporate governance criteria to generate long-term competitive financial returns and positive societal impact. SIF members support SRI through such strategies as portfolio selection analysis, shareholder advocacy and community investing. www.socialinvest.org
. The Social Investment Forum Foundation, the publisher of the 2010 Report on Socially Responsible Investing Trends in the United States
, carries out research activities to support the public education mission of the Social Investment Forum.
One PacificCoast Bank, FSB, is an FDIC-insured Community Development Financial Institution (CDFI) that serves businesses, nonprofit organizations, and individuals. One PacificCoast Bank operates from a triple-bottom-line perspective that allows it to place equal importance on its financial, social, and environmental goals while meeting the needs of its communities. One PacificCoast Bank’s beneficial banking services integrate financial literacy, technical assistance, and business education through support from the One PacificCoast Foundation. The bank is headquartered in Oakland, California with branches in Seattle and Ilwaco, Washington, and a lending office in Portland, Oregon. www.onepacificcoastbank.com
The National Federation of Community Development Credit Unions represents more than 225 credit unions that serve low-income communities. The Federation, which co-founded and sits on the board of the CDFI Coalition, has provided capital to low-income credit unions nationwide since 1983. www.natfed.orgMEDIA CONTACT:
Patrick Mitchell, (703) 276-3266 or firstname.lastname@example.org
A streaming audio replay of the news event will be available on the Web at www.greenamerica.org/about/newsroom
as of 5 p.m. EDT on April 13, 2011.
* Because of a change in data sources, the pool of certified CDFI loan funds measured for the 2010 report increased from the 146 largest certified CDFI loan funds at the end of 2006, to all 519 at year-end 2009, so a direct comparision is not possible.http://ussif.org/news/releases/pressrelease.cfm?id=173