I don’t know about you, but when I get financial statements in the mail these days, I don’t look forward to opening them. An exception arrived recently —my statement from the Calvert Foundation, which was followed soon after by the nonprofit’s annual report.
I’ve got about $5,000 invested in what Calvert calls a Community Investment Note. This is the foundation’s most popular product. You can buy a note in any amount (minimum: $1,000) for a 1, 3, 5, 7 or 10-year term. You also pick your own interest rate, currently in a range from 0 to 3%. I take the full 3%, but if you are feeling generous, you can take less. About 15% of buyers take no interest at all, according to Calvert.
The reason is, Calvert provides social as well as financial rewards.
First, the money: In ordinary times, a 3% return is not very exciting. But these are not ordinarily times. Year to date, the S&P 500 Index is down by about 35%. Because interest rates are so low, a $5,000 money-market account at Bank of America earns less than 2% interest. So Calvert’s Community Investment Notes are, for the moment, competitive with conventional investments.
Second, the good: Calvert channels its money to poor communities. Its funds provide loans for affordable housing (through renovation of existing homes or new construction), microcredit for entrepreneurs, loans to business, and others to community facilities like day care centers or health clinics. Calvert also supports Gulf coast recovery after Katrina and projects with environmental benefits. You can target your investment by sector or geography.
According to the foundation, since its start in 1995:
Calvert Foundation investors have helped to create over 200,000 jobs for low-income individuals, built or rehabilitated 9,000 affordable homes, and financed close to 12,000 nonprofit facilities and social enterprises.
Calvert’s a neighbor of mine in Bethesda, so I’ve come to know and trust people there—Shari Berenbach, who runs the foundation, Bennett Freeman, who oversees social research and policy, and company chief Barbara Krumsiek. But don’t take my word for it. Lately, Calvert has attracted support from institutions as well as individual investors. Catholic Health Initiatives, a big faith-based group of hospitals, nursing homes and other health-care facilities, bought a $10 million community investment note. So did Merrill Lynch, as part of an effort to support female entrepreneurs with microcredit. You can be sure that Merrill, which soon after was sold to Bank of America, wishes it had put more money into Calvert and less into mortgage-backed securities.