Investing in Community By Chuck Matthei Chuck Matthei is director of the Institute for Community Economics, which provides training, technical assistance, and financing to community development organizations throughout the United States. In the spectrum of social investment initiatives, community investment programs stand out for their unique ability to strike at the roots of economic injustice and express an affirmative social vision. Community investment funds encourage investors to think not only about what they are opposed to, but what they would like the world—and their neighborhood—to look like in the future. Community investment addresses social needs and opportunities that cannot be addressed through conventional stock and bond investments. Community investment provides housing, employment, and basic human services to those who have been excluded from the real estate and job markets, and it supports the development of innovative, democratic, community-based economic institutions. The line of demarcation between the haves and have-nots in this society is shifting, particularly in the housing markets, on the farms, and in the industrial heartland where factories and communities are neglected and abandoned and thousands of jobs are lost. Factories owned by distant conglomerates are literally "running away," leaving working-class and middle-class Americans unemployed and disenfranchised, and the plight of the poor steadily worsens—yet much of the critical financing for worker cooperatives, and micro-businesses in low-income communities is not available from conventional capital markets. Investors who are concerned by these realities, who want to help realize these opportunities, turn to community investment. Community investment involves three basic social conrunitments. First, it is a commitment to places—to specific communities—and to strengthening the economic and social relationships on which they depend. Second, it is a commitment to the people in those communities who have been systematically disadvantaged or excluded by prevailing economic forces—a commitment to social and economic justice. And third, it is a commitment to the kinds of projects—community development projects—that build an economic base in and for those communities, that effect a just distribution of equity and earnings. What kinds of investments reflect these three basic commitments? Community investment typically finances businesses owned by workers, consumers, or nonprofit organizations—rather than those owned by distant shareholders; it supports community land trusts, housing cooperatives, and nonprofit housing corporations, which provide affordable housing and homeownership opportunities to residents while ensuring that the properties will remain affordable for future residents and will not return to the speculative market. For the investor, community investment offers a wide range of terms and may take a variety of forms. Investments may be negotiated directly between Community investment addresses social needs that cannot he addressed through conventional stock and bond investments. investors and particular conamunity development organizations, but usually they are placed through community development credit unions, development banks, or community development loan funds. Community development credit unions are established to serve low-income communities. They have the ability to effectively meet the consumer banking and credit needs of neighborhood residents—people who are usually served very poorly, if at all, by conventional banks. Occasionally, as in the case of the Page 14
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