Community Investment Notes

With the dramatic increase of attention around ESG and similar investing approaches, more and more products are becoming available to those seeking financial returns, as well as social or environmental outcomes. Although the vast majority of these products are equity-based (stocks and mutual funds), there is an increasing number of investors looking for equally impactful investments in fixed income. For most, Community Investment Notes may be the answer.

How does it work?

With as little as $20, investors can select offerings with maturity dates ranging from 6 months to 10 years and interest rates currently paying about 0.40% to 2.50%. These funds are then used to finance mission-driven organizations based on location, social cause, and/or other distinguishing characteristics that the investor chooses at the outset. These notes (read: bonds) are an accessible way to  blend financial, social, and environmental returns into a single fixed-income product. 

Additionally, unlike its equity counterparts, Community Investment Notes are sometimes offered by organizations in your neighborhood. As they continue to grow in popularity and demand, a greater number of your favorite foundations are likely to begin making these types of products available.

What risks are involved?

As with any investment, there is a certain level of risk involved. That said, the funds are spread over a large pool of thoroughly vetted intermediaries and organizations, mitigating risk and increasing the impact. Calvert Impact Capital, a nonprofit and the largest player in the field of Community Investment Notes, boasts a 100% repayment of all principal and interest since 1995. Still, past performance is no guarantee of future returns.

What about charitable giving?

No, it’s not the same as a charitable contribution – in many cases, it’s better. Since there is no expectation of repayment, charitable contributions run the risk of being squandered or misused. Conversely, the need to repay the principal and regular interest payments of Community Investment Notes forces the organizations and individuals to use the funds prudently. This leads to a much deeper level of impact and appreciation for the original funding.

Additionally, since these notes provide a solid financial return with a high level of stability, there is a strong case to make them a part of any investment portfolio. Because of this, there can be funds contributed well above and beyond what one could contribute solely as charitable giving.

Although there are obvious advantages, there are a few disadvantages as well. Most organizations do not offer these notes as a source of funding and entirely rely upon charitable contributions. Also, since they are investment products with a rate of return, these are not tax-deductible, even though they serve a similar purpose.

Community Investment Notes aren’t meant to replace one’s charitable giving but instead expand the opportunity for their finances to reach more people and have a greater impact.


The benefits of Community Investment Notes are obvious: on top of the financial returns, social and environmental returns are also achieved while fitting attractively into an investor’s portfolio. This allows all investors to expand their reach and ability to create change, simultaneously bringing in a steady stream of stable income. The best part is, anybody can be a part of it.

Ask us how you can get started investing in Community Investment Notes through Price Wealth Management today!

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