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If
the CDFI is a bank or a credit union, you can invest by making
a simple deposit in a savings account or purchasing a certificate
of deposit, just as you might at a commercial bank. Like banks,
credit unions are regulated and insured by government agencies.
However, only Community Development Credit Unions officially designated
as low-income are allowed to take deposits from nonmembers.
Investing
in a loan fund or venture capital fund can be more complex. Each
investment is a separate contract. Some states require that investors
prove that they can afford to take the risk. However, a number
of loan funds have streamlined the investment process and attract
hundreds of individual investors. Although deposits are not covered
by government insurance, most loan funds have nearly perfect records
of repayment.
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 "In
the beginning, the people who invested were predisposed to
do so out of liberal social values. Or they were people from
the church community, often Roman Catholic orders and some
of the mainline Protestant denominations. But, as we built
more credibility, we got more interest from banks, insurance
companies, foundations, and from hundreds and hundreds of
individuals."
Jeremy
Nowak, The Reinvestment Fund |
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