Lately, many family foundation members have asked me about the best way to get started in impact investing.
An easy, no-risk way to start is to park your investable cash (up to $250,000 is federally insured) in a “do good” bank. Be careful though, some banks claim to do good, but they don’t.
You need to find an “It’s a Wonderful Life” bank, the kind that accepts deposits and invests the money in the local community. Avoid a bank that functions as a huge vacuum cleaner, sucking up community members’ assets and sending the money to Wall Street.
If you’re not sure if your local bank qualifies as a “do good” bank, contact the National Community Investment Fund (NCIF) to see how your bank rates.
Or, try one of the 11 Minnesota banks that meet NCIF social-impact standards. For example, the locally owned and operated Sunrise Community Banks is a B-corp and community development financial institution (CDFI) that caters to diverse urban customers and lends to them as well. This video says it all.
Full disclosure, I’m such a fan that I serve on the Sunrise Community Advisory Board. Sunrise Banks is also an MCF member.
Top of my mind these days is investing in line with Diversity, Equity, Inclusion values. Many institutions promised bold moves after George Floyd was murdered. Who is following through and doing this well? Racial justice requires new pathways for capital flows. I’m excited to be part of the McKnight Foundation’s Groundbreak Coalition, aiming to deploy $2b in flexible capital over 10 years to disrupt the status quo. In Minnesota we are a generous state, a charitable state, a hard-working state: we need to try new approaches to create that famous quality of life for all. We are leading a session on Place Based Impact Investing at the Mission Investors Exchange conference in Baltimore. Reach out if you’ll be there so I can include you in the informal MN meet-ups.