Community Investing

What Is Community Investing?

Community investing is an investment approach that directs money toward underserved communities, local development projects, or organizations that aim to create social and economic benefits. These investments often support affordable housing, small business lending, community development financial institutions (CDFIs), credit unions, and mission-driven projects.

Community investing is often used by individuals and institutions that want their money to support economic opportunity while still generating a financial return.

Why It Matters

Community investing helps channel capital into areas that may not receive enough support from traditional financial systems. It can help expand access to credit, promote job creation, support local entrepreneurship, and strengthen financial inclusion.

For investors, community investing offers a way to align financial decisions with broader social goals.

How Community Investing Works

Community investing may occur through:

community development loan funds
CDFIs
mission-driven banks and credit unions
municipal or community-focused bond funds
specialized impact investment platforms

Some investments prioritize measurable community outcomes alongside financial returns. The risk, liquidity, and return profile can vary depending on the structure.

Example

An investor places part of their money in a community development fund that finances affordable housing projects and small business lending in underserved neighborhoods.