Calvert Foundation – Community Investing

July 3, 2008

Calvert Foundation Logo

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.