As we reflect on ways to ensure our community offers promise and opportunity for everyone, several areas come to mind: Affordable housing. Local entrepreneurs and start-ups. Small businesses. First-time homeownership. Strong local food systems. Financial stability and economic mobility.
These are all priorities that donors in our community care about and to which they give generously. But they can also invest in projects and entities aligned with their interests and have the possibility of generating both a return for the community and a financial return for themselves.
Greater Good Greenville convened a targeted group of community members representing donors and investors, local organizations that deploy investments, and partnering nonprofits to learn more about local impact investing and discuss its potential. The event was generously sponsored by Bank of America.
Local impact investing is a tool that extends the community impact of an individual, foundation, endowment, or donor advised fund, increasing the bottom line of what they put toward causes they care about. Because it is a true investment – meaning the dollars are an asset of the investor that stay on the investor’s books rather than a donation – investors can potentially put forth more toward a project or entity than they might with just a charitable gift.
Our top five takeaways:*
1) Your assets (not just your donations) can be used for charitable impact. Ways to have mission-related impact with assets range from screening one’s portfolio to exclude or include causes you oppose or support (e.g. tobacco or climate-friendly companies), investing in local entrepreneurs and start-ups, or lending money at a low interest rate to local affordable housing development. Returns don’t have to be concessionary, but you can also decide to accept a lower return as a part of your charitable impact.
2) If you care about community members in Greenville County and you already give generously, local impact investing is a way to go the extra mile. There are many people with means who make donations to things like early childhood development; they could invest in an entrepreneur starting a new childcare center. Those who give to affordable housing can invest in its production with affordable housing developers. Donors who support first-time homeowners can put assets toward those entities that make mortgages affordable.
3) There are many easy, low entry points to begin local impact investing, along with more complex and significant ways to act. A few examples:
- Open an account with just $500 at Self-Help Credit Union, which they can lend out to folks with low incomes who want to buy a car or avoid a predatory loan.
- Open an account for just $1,000 with CommunityWorks, and they can use it to support small businesses and first-time homeowners
- Make an investment of $100,000 or more with the Greenville Housing Fund to help develop more affordable housing.
4) Don’t be overwhelmed by the opportunities, say those already engaged in impact investing. Just pick a place to start and learn as you go, whether it’s traditional screening in your investment portfolio in a way that aligns with your values or investing in a local housing provider such as Homes of Hope. You can also make charitable gifts to an entity such as Abundance Capital, where you can direct their investment in local projects.
5) Generosity is the natural expression of gratitude, as our keynote speaker Dianne Chipps Bailey shared with us. Many in Greenville County are enjoying prosperity and a high quality of life. Our gratitude for that experience should propel us to generously use all of what we have to make a difference. Impact investing is one tool to expand charitable impact beyond charitable gifts.
Local impact investing holds great promise to bring more capital to some of our community’s greatest challenges and opportunities. The four panelists who are already engaged in local impact investing, whether as a family foundation, individual donor, a bank, or investment advisor, have found that there are many opportunities that align with different interests and risk tolerance.
* Greater Good Greenville shares this page for informational and educational purposes only, and it is not intended to constitute legal, tax, accounting or investment advice. Greater Good Greenville expressly disclaims any liability for the accuracy and completeness of information.
