We tend to think that there are three ways we can make a difference in our communities: volunteer, engage in activism, and make charitable contributions. There is a fourth way: social impact investment. Community organizations through which one makes investments in underserved markets are known as Community Development Financial Institutions (CDFIs). And the principal CDFI in Connecticut, a recent coming together of CDFIs in New Haven, Bridgeport, and Hartford, is called Capital for Change.
Capital for Change lends money to Connecticut businesses for affordable housing and for the introduction of energy efficiency upgrades to multi-family dwellings. With horrific incidents occurring all around the world, such as in London and Honolulu, it is evident that many older buildings that house lower-income families not only lack energy efficiency features, but do not even meet current safety codes. Those who invest through Capital for Change help address these problems.
Social impact investments do good while providing an income stream to the investor. An investor with Captial for Change can, however, choose to receive no interest or a rate lower than the maximum for the length of the investment. Choosing a lower rate is effectively a contribution to the organization.
Capital for Change is seeking investments of as little as $1,000 from individuals and from foundations, faith-based organizations, and other entities. It pays interest annually for these investments, with longer-term investments receiving more favorable interest rates. They are as follows:
1 to 2 year investments: 0 to 2.5%
3 to 7 year investments: 0 to 3.0%
7 to 10 year investments: 0 to 3.5%
10 plus years: 0 to 4%