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Community Development Financial Institutions

There are more than 500 community development financial institutions (CDFIs) in the United States, with at least one in every state. The primary mission of CDFIs is to promote economic development in struggling areas, both urban and rural, that are underserved by traditional financial institutions. CDFIs are playing a critical role in building a healthier economy by providing these communities with the access to capital that they so sorely need. 
CDFIs provide an array of financial services in their target areas, including mortgage financing for homebuyers, financing for the rehabilitation of rental housing, financing for the building and rehabilitation of community facilities, commercial loans to small and microenterprise businesses, and financial services needed by low-income households and businesses in the target areas.
CDFIs include: 

  • Community Development Banks, which provide needed capital to help rebuild economically distressed communities through targeted lending and investment.
  • Community Development Credit Unions, which provide affordable credit and financial services to low-income and minority communities.
  • Community Development Loan Funds, which typically raise capital from socially responsible investors at below-market rates and then re-lend the money to nonprofits that build housing and community facilities in struggling urban and rural areas.
  • Community Development Venture Capital Funds, which provide start-up capital for real estate and new business development in economically distressed areas.
  • Microenterprise Loan Funds, which provide loans and technical assistance to low-income people starting very small businesses.

Domini Social Investments helps you invest in CDFIs through the Domini Social Bond Fund. Up to 10% of the Fund’s assets are devoted to direct investment in community development, including a number of CDFIs around the country. Here are just a few of the CDFIs in the Fund's portfolio:

  • Southern Bancorp: Working in isolated rural communities in Arkansas and Mississippi, Southern is the nation's largest rural development bank, with a long-term commitment to community revitalization through efforts such as poverty reduction, education, healthcare, housing and leadership development.
  • Self-Help Credit Union: Since the national foreclosure crisis, Self-Help has been active in national and regional efforts to stabilize neighborhoods hard-hit by foreclosure, providing responsible housing loans, foreclosure prevention and recovery services, and policy research and advocacy to fight against predatory lending practices.
  • Hope Credit Union: Operating in four out of six state's with the country's lowest median household incomes, where thousands of residents have lost homes and businesses due to hurricanes and flooding, Hope is helping to rebuild affected communities through its affordable financial products and services.

The Fund also invests in a number of CDFIs serving minority communities that are often excluded by the mainstream financial industry.