It is possible to benefit people in need, and the environment, simply by choosing a socially responsible bank account, or even putting extra money into community loan funds. Why not let savings sit in a green credit union or progressive bank, rather than a conventional banking account? Looking for a safe, low-yield investment, and interested in sustainable development and the environment? Then loan funding may be a great fixed-income, eco investment. There are many options for green investors, willing to accept smaller returns for the greater good.
Choosing a Green Credit Union or Bank
Credit unions by nature tend to benefit communities or small groups of people. They are non-profit, yet still federally insured institutions, which focus on members, not profit. They loan money out to the community at reasonable rates, instead of issuing loans, and then selling these debts for profit. A green credit union takes the concept of benefiting the people to a new level.
Both socially responsible banks and credit unions proactively put funds into areas that need development. While traditional banks will not give money to lower-income customers because of financial risk, progressive institutions will purposefully, yet responsibly, invest in areas which desperately need development. Minority-owned, environmentally-friendly, and community-minded businesses receive the funds which they need to thrive.
Socially Responsible Banking Options
One of the most well known banks for socially responsible investing is Shore Bank Pacific. This institution was the first commercial bank in America to focus on sustainable, green investing. They offer a range of fixed-income investments, from money market accounts to certificates of deposit, for both individuals and businesses. Anyone can use Shore Bank Pacific for their banking needs, regardless of location.
Other institutions for green investors include Carver Federal Savings Bank and Chittenden. Based in New York City, Carver is African-American owned, and has been investing and supporting the community for over fifty years. Chittenden is based in Vermont, and uses funds to support education, conservation projects, affordable housing, and community building.
Loan Funding for Green Investors
Another option for socially conscious investors is loan funding. A loan fund or trust is neither a charity, nor a for-profit organization. The goal of a loan fund is to provide financial returns for green investors while providing funds for borrowers in need. In order to curb the risk of unsecured loans, many loans are pooled. This way, if a handful of projects do not work out, the success of other projects will neutralize the loss.
These fixed-income investments are slow-growth, but generally secure. According to research done by the Community Capital Association in the 1990's, repayment was at 99%. Still, unlike federally-insured credit unions and banks, loan funds are not backed by the federal government. They should be treated as a secondary eco investment for safe money, after savings accounts. Examples of loan funds include the Institute for Community Economics and the Cascadia Revolving Fund.
Settling on Socially Responsible Investing
Socially responsible investing will have much greater benefits than fixed-income returns. When people put their money into green and social ventures, everyone reaps the rewards — the applicants who utilize the money, the investors who receive the returns, the community who gets an environmentally-friendly business, and the surrounding communities who are touched by the positive, progressive venture.
Sources:
Editors of E. "Green Living: The E Magazine Handbook for Living Lightly on the Earth." (Plume, 2005).
"Community Development Banks" (Better World Handbook)
Brenna Coleman - Brenna is a freelance writer focusing on natural health and beauty. She has written hundreds of articles, helping readers find ways to ...
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