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90 Locavesting
of $1,000. The notes allow individuals to choose from one of eight
regions in the United States, and then Calvert funnels their investment
to a loan fund it has partnered with in the region.
Sounds simple enough, but Calvert spent years doing the
behind the scenes work to make its notes—square pegs that
didn’t fi t neatly into the round holes of the fi nancial world—
conform with the fi nancial regulatory framework. Today, you
just call up your broker or go to MicroPlace, a microfi nance site
owned by eBay, and place your order. About two- thirds of Calvert
Foundation’s 7,000 individual investors come through MicroPlace,
where investments can be made in increments as low as $20.
These days, the foundation sells about a million dollars’ worth of
notes to individuals every week. (Currently, the notes are paying
in the low single digits, depending on the term. But the foundation
has a cumulative default rate of less than 1 percent.)
There may soon be another easy alternative for individual
investors who want to support CDFIs. A new CDFI bond program,
proposed by OFN and included in the 2010 Jobs Act, authorized
$3 billion in government guaranteed bonds over a three year
period, providing a source of long- term, low- cost capital for CDFIs
and a new investment platform for individuals. The tax- exempt
bonds could be available by the end of 2011.
As individuals increasingly seek to invest their money in more
meaningful and less volatile ways, community loan funds are trying
to make themselves more accessible. Some, such as Accion, are listing
their loans on microfi nance lending sites, such as MicroPlace.
“CDFIs are a great channel for individuals to get money into
a community,” says Fabiani. “Everybody wants to tap into this.”
At the New Hampshire Community Loan Fund, based in
a tiny New England state that has neither a big budget nor large
foundations, “We’ve always scratched by on a lot of small investors,”
says Alan Cantor, vice president of philanthropy at the
fund. Lately, though, there’s been a surge of investments from
individuals, who now number more than 350. In the fi scal year
ending mid-2010, individuals poured $4.5 million into the loan
fund, double the amount from the prior year. That’s all the more
remarkable given that, like most loan funds, NHCLF does no