October 18, 2011

Energy Efficiency table on the Green Affordable website. We recently launched the new NeighborWorks Capital website. NeighborWorks is our second Community Development Financial Institution collaboration, the first being the Chicago Community Loan Fund (CCLF), for whom we built two websites; one for their organization and one for their Green Affordable initiative. 

I first became aware of Community Development Loan Funds (CDFI) in college when we were looking to invest our school endowment in funds that contributed to the well being of society, rather than its sickness (tobacco, fast food) or destruction (weapons). We felt that social screens were useful, but did not necessarily reach our desired impact of promoting better development. Williams College is one of the largest employers in Berkshire County, MA. The high salaries it can provide and the several alumni who settle in the Purple Valley contribute to high costs of living in and around Williamstown, making it difficult for some residents to stay in the town where they and their parents grew up. We began looking into CDFIs that would leverage endowment funds to support perpetually affordable housing, business, and community center development.

In 2001, a return on investment of 1-3% was a hard sell to the Board of Trustees, responsible for the college’s financial prosperity. We argued that positive community development was also a tangible and critical interest for Williams. Our negotiations resulted in the establishment of the Williams Social Choice Fund. Alumni can choose to donate to this endowment fund, part of which goes to a CDFI working on Berkshire County projects.

Today, one of the key services that CDFI’s provide is investment in energy efficient retrofits and new construction. We worked with CCLF to provide an online resource for Chicago area builders to find trainings, information on tax credits, locations for materials, and case studies. This tool replaced a booklet that quickly became outdated and was labor and cost intensive to re-print. It allows the staff to add several additional resources and keep them up to date.

NeighborWorks Capital (NC) lends to NeighborWorks America organizations across the country. One of their new loan products is for renewable energy and energy efficiency equipment, installed in rental properties or the borrower’s office buildings. In addition to the new website, we put together promotional term sheets for each loan, helping NC get the word out about this and other opportunities they offer. 

CDFIs often draw most of their capital from institutional investors. However, there are opportunities for individuals to invest in their work. The next time you’re considering where to put your money, research CDFIs to determine if their work can meet both your financial and social interests.