by Brian Thompson from forbes.com, January 31, 2021
The current political and economic climate has focused attention on justice and values, leading more organization, advisors and clients to discuss social impact investing. We’ve seen companies like Netflix NFLX -1.6% invest $100 million to financial institutions that serve black communities. Twitter, PayPal PYPL -3.6% and Square SQ -5.4% followed suit instituting corporate initiatives combating racial injustice and poverty, using Community Development Financial Institutions (CDFIs) as a primary vehicle. Even the government has gotten involved as the SBA used CDFIs to promote access to capital in the latest round of Paycheck Protection Program loans. And as we start Black History Month, this conversation will continue to resurface.
Despite being around for decades, many people still don’t know what CDFIs are or how to use them. I want to give an overview of CDFIs and provide some useful resources for how you can use them to align your desire for social justice with your investing.