As with CDFI's, local or regional community banks may offer the benefit of reinvesting the socially conscious person's deposits back into their community, even though it may not be a stated mission of the bank. Whether intentional or not, a bank that is very concentrated in its geographic footprint is likely to loan most of it's deposits back to the people within that region. Conversely, larger banks are more likely to take local deposits and loan that money out in other communities. The primary difference to the socially responsible investor between community banks and CDFI's is that community banks are driven by profitability rather than a stated social mission, which CDFI's exist for. You can check www.rtplinks.com for a very complete listing of banks and credit unions in the Triangle. Before you choose a bank, make sure you check their website, annual reports and ask your personal banker about their commitment to keeping your dollars invested in your community!!! [Back To Top] |
A third way to invest in your community is through municipal bonds. Issuing bonds is one way that an entity can borrow money. In its simplest terms, a bond is a loan that pays a set dividend to the bondholder and at the end of a specified period, the principal is returned to the investor. By issuing bonds, state and local municipalities are able to raise money for any number of projects they may need. In most cases, municipalities will need the approval of the voters to issue a bond. Some of these projects may be very worthwhile to the socially responsible investor, such as | u | Building or Renovating Schools | | u | Creating or Improving Green Space (Parks, Trails, etc) | | u | Building or Renovating Healthcare Facilities | | u | Building or Improving Infrastructure (Roads, Bridges, etc) | While the socially conscious person might find any or all of these to be good causes for their investment dollar, municipal bonds are usually specific
enough that an investor can avoid bonds that they don't want their money supporting, for instance, a sports venue. One of the greatest incentives for investors to purchase municipal bonds is the tax status of the dividends. Municipal bonds are generally Federal Income TAX-FREE & potentially State Income TAX-FREE, which makes these bonds very attractive to investors that have an income objective. As a financial planner, I can help you invest in a portfolio of appropriate municipal bonds. [Back To Top] |
