Community investments are a portion of the UU Common Endowment Fund allocated to strategies that provide capital and financial services to economically disadvantaged people and communities. These investments support development initiatives such as affordable housing, small-business lending, microfinance, and community development financial institutions (CDFIs), primarily in the United States.
They are important to the Fund because they put Unitarian Universalist values directly into action, using investment assets to address systemic inequities and expand economic opportunity while still pursuing prudent financial stewardship.
The Investment Policy Statement commits a dedicated allocation to community investments as a way to “use our assets to invest in capital-deprived communities and people” and help redress long-standing social and economic injustices. In this way, community investments complement the Fund’s traditional market investments by delivering both financial returns and tangible social impact aligned with UU principles.
The UUA Board of Trustees voted in 2006 that 1% of the UUCEF would be allocated to CIs; in 2020, the Board voted to increase the CI allocation to 5%. In reaching the 5% goal, the IC is currently focusing on undercapitalized Community Development Financial Institutions (CDFIs), working through umbrella organizations, and prioritizing investments led by and benefiting Black and Indigenous people and communities. The IC will work with the Investment Manager, other consultants, and other partners in selecting appropriate groups and strategies to receive new or additional investments to reach this goal.
Key Definitions
Community Investing (CI) is financing that creates resources and opportunities for economically disadvantaged people and communities underserved by traditional financial institutions. CI supports development initiatives in low-income communities both in the United States and in developing countries. CI financing creates access to affordable financial services and financial education, loans for first-time homebuyers and affordable housing development, micro and small business development, community services, and venture capital financing.
Community Investments are offered by community investing institutions and include checking accounts, savings accounts, certificates of deposit, loan notes, equity investments in community development, and money-market funds.
Community Investing Institutions include community development banks, credit unions, loan funds (including microenterprise lenders), venture capital funds, and other institutions which offer investment products that support community development, e.g., Calvert Foundation Notes.