• 09.02.14

Investing In Your Community Pays More Than A Savings Account

Want to get involved in impact investing, but don’t have millions of dollars? Organizations like the Calvert Foundation are making it possible.

Investing In Your Community Pays More Than A Savings Account
[Top Photo: Michael Shake via Shutterstock]

Impact investing has the potential to leverage serious capital for social purposes. But, as we saw recently, it hasn’t yet emerged as the force it could be. There’s a need for better measurement and metrics to satisfy data-hungry funders, as well as an expanded range of investors. At the moment, the field is associated mostly with institutional funds, big foundations, and well-meaning one-percent types. It’s still not a movement for the rest of us.


When we made this point recently, Patrick Davis got in touch to say he agreed–but that there are avenues for ordinary people to participate. The Calvert Foundation, where Davis works, recently launched, which lets people invest in community projects, putting down as little as $20 a time. The platform is a little like Kickstarter–except there are real financial returns, not just perks and products with funny names.

Kenneth Sponsler via Shutterstock

For example, Calvert works with a group in Minneapolis and St. Paul that helps finance entrepreneurs from minorities. Go to the Twin Cities page and you can immediately invest $100 over five years. You get a 1.5% interest rate–longer periods pay more–and everything you put in is guaranteed back. The investments are fixed, which means you’re pretty safe whatever happens.

“It’s a much better place to put your money than a savings account,” Davis says. “Savings are not giving anything at the moment. With this, you are at least getting some interest.” Most accounts currently pay less than 1%, according to is actually Calvert’s second effort at an impact investing web site. Until early this year, it partnered with, a PayPal-managed platform that featured several social investment products. PayPal claims it enabled $58 million in funding over its seven year existence; about 10,000 investors bought into Calvert’s community bond using the site.

Davis thinks those numbers aren’t bad, but that they could have been better. “One of the things we learned from MicroPlace was we need to drive hard at a simple user experience,” he says. “MicroPlace had a lot of bells and whistles, but there was a lot of information people needed to fill out, so there was significant drop-off after they visited the site.” site tries to be more like crowd-funding in terms of its accessibility.

Davis says impact investing needs to learn from consumer web sites if it’s going to attract more consumers. “We’re trying to break through the bubble that’s almost impenetrable in this community. It’s a whole bunch of people talking to themselves and not getting outside that sphere,” he says. “It’s really a lot reformed i-bankers who want to do something better with themselves. We don’t have a lot of talent around communications and digital.”

Impact investing has plenty of stories to tell about improving lives and doing good. That it hasn’t told those stories yet is down to two reasons, Davis says. One is regulation. The authorities still aren’t keen on alternative investing online, despite Kickstarter and the JOBS Act, which should make things easier. The second is more cultural. There needs to be a shift in mindset before ordinary folk feel included in this movement.

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.