Invest In Your Street, Not Just Wall Street

ON January 19, 2017

Giving locally makes a lot of sense. We’re lucky in Minnesota to have one of the most generous communities in the country and world.* We also have innovative and effective not-for-profit organizations that make the most of each philanthropic dollar (click here for some of my favorites and send me yours!).

What about our investments? As thoughtful as we are about our donations, most of us tend to segregate our charitable instincts from our investing strategies. The good news is that it’s increasingly possible to combine the two. In fact, there are a growing number of thoughtful financial advisors who can help us think through how to do good AND do well in our portfolios.

For an example close to my home, The Minneapolis Foundation is leading the way with “InvestMpls”, a $10 million initiative for donors to put their assets to work for small business and schools in Minneapolis. Instead of going to Wall Street, local philanthropic dollars will stay here, capitalizing on the love people have for where they live. Individuals and small family foundations with a Donor Advised Fund can participate.

For fans of the Windy City there is the $100 million Benefit Chicago, a place based investment strategy led by the MacArthur Foundation, Chicago Community Trust, and Calvert Foundation that is open to individual investors.  They aim to put money to work in the local community to fill the unmet need for financial capital in the social sector. For as little as $20 investment, individuals can buy a “note” in which they get similar financial returns and safety as a certificate of deposit “CD” rate. We have a similar product here, Ours to Own, run by the Calvert Foundation with local partners Community Reinvestment Fund and  AEON.

Or perhaps your heart lies just east of the Mississippi River. In 2014 the St. Paul Foundation launched the $2.1 million East Metro Loan Fund, an initiative already creating jobs through investing in minority- and women-owned businesses (who are large job creators and remain loyal to their community). Metropolitan Economic Development Association (MEDA) and Neighborhood Development Center (NDC), have approved $1.9 million of the East Metro Loan Fund in low interest loans to local businesses—75% of which are owned by people of color—creating 175 new jobs.

Rural Minnesota is another hotbed for place-based investment strategies. Regional foundations such as the Southern Minnesota Initiative Foundation in Owatonna which has launched a ‘Grow a Farmer Fund’ to support small-scale sustainable farmers. They are accepting donations to jump-start the fund which they will, in turn, lend to farmers.

Consumers have many good options to buy local and donate local; now invest local!

Click here for more “Locavesting” ideas and tweet me your thoughts @susan_hammel.

Susan Hammel Bio: As a philosophy major who went to Wall Street, Susan Hammel translates between passionate social changemakers and expert accountants.  In her role as President and Founder of Cogent Consulting Inc., this year Susan is serving as MCF Executive in Residence for impact investing and leading the charge to map the Twin Cities impact investing ecosystem, both thanks to support from the Bush Foundation.  In this unique position, Susan is connecting the many disparate initiatives happening both in the philanthropic and financial sectors.  As a life-long Minnesotan, Susan is dedicated to the entire community and brings professional experience from New York, Washington DC and Chicago to our region. 

*Charitable Source: CBS “Minnesota is the second most charitable state” (behind Utah) in the 2nd most charitable country (behind Myanmar)

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What I'm doing now

The tide is turning: more people are thinking about their moral, social and environmental values when they shop, play, and invest. Impact investing is going mainstream with more robust and consistent impact measurement and monitoring happening every day. The blowback on ESG (Environmental, Social, Governance) makes true impact investing (which requires impact measurement) all the more relevant. Will changing how people view money change the world? Well, it isn’t a panacea for all that afflicts us but as they say, “follow the money”. Investors have power. Use yours wisely.