Erich Broksas over at the Case Foundation suggested I check out the Calvert Foundation. This is a pretty interesting venture that allows individuals to invest in securities that have a fixed rate of return that you set from between 0 and 3%. Calvert then lends out the money to organizations working on community-related projects such as housing, microcredit and other areas. You get your money back at the end (1, 3, 5, 7 or 10 years) plus interest at the rate you set.
Unlike donations, your investment is not tax-deductible - but you get your money back. If you’re in the 33% tax bracket, a $1,000 donation will shave $330 off of your taxes that year, but you’ve given up $670 of your principal. If you invest $1,000 in a Calvert Foundation Comunity Investment Note for 5 years, you get your principal back at the end of 5 years. Assuming 4% inflation and setting your note interest at 0%, the “real” amount returned to you is $815, or an inflation-based $185 loss of purchasing power. During the 5 years your capital has helped build affordable housing, or capitalized socially-oriented small businesses, or provided microfinance loans to entrepreneurs in developing economies. You can reinvest it or choose to donate it at that time.
Calvert has a cool “Social ROI” calculator that shows how $1,000 over 5 years helps create “7.83 microenterprises and create 15.68 jobs in communities around the world.” Worth checking this out.
Filed under: Social Investing | Tagged: Social Investing, calvert
The Calvert Foundation indeed does interesting work - I love the “Social ROI” calculator! For similar investments - those that achieve a positive social impact and return your capital with a profit - I suggest checking out a community investing bond fund. Those funds purchase bonds that finance community development, affordable housing, enterprise development, etc. The About.com section on Socially Responsible Investing has an article about Community Capital Management’s community development bond fund - go to http://socialinvesting.about.com/od/srimutualfunds/a/SRIBondFund.htm. Best luck and happy investing!