I recently got a job at the only Wisconsin-based statewide loan fund that serves the needs of non-profits within the state. It’s kind of funny, how things work out. Many of my classmates are now working in campus ministry, teaching at a Catholic high school and running retreats, or working at a parish. I wasn’t having much luck in those fields after moving to Madison, so I decided to hone in on working for a non-profit doing fundraising (even though I had almost no experience with that). Anyway, so far it’s been a great fit for me (and hopefully for the organization). And like the best jobs, it’s given me a crash course in a whole new field: investing and lending.
Basically, what we do is acquire investments from individuals, banks, credit unions, religious orders, and labor unions. Individuals might invest as little as $1,000 at as high as a 3% interest rate (although it’s nice when people invest at 0% and we can just use their money to make the loans). Religious orders tend to lend at about the same interest rate range, and banks and credit unions are a little higher. Then what we do is find non-profits throughout the state of Wisconsin that are providing much-needed services to low-income people, such as affordable housing, community centers, and public health centers. The belief is that no matter what peoples’ net worth is, everyone should have access to high-quality facilities. The idea is that you can invest in our organization, and your dollar will go ten times further than a donation – because it’ll get lent to a non-profit serving the needs of low-income people, which will then get paid back and re-lent out to the community.
The crash course comes from not knowing much about investments (I’m happy when I have $600 in my savings account), nor about borrowing money (all my knowledge is from the home loan I got a few months ago). But it’s been great to be in this field and to find little signs of hope and community development, even when large amounts of money ($700 billion??) are being tossed around for a Wall Street bailout.
Some of what I do is cleaning up our lists of contacts of investors, donors, and potential investors and donors. It’s funny to be going through, googling all these names and along with finding their addresses, finding how much they are giving to either the Democratic Party or the Republican Party. Because of the economic class that so many of these high-income people fall into, they are giving more to the Republican Party over the years. Let’s just say that I’m not sure I’ve worked with so many economic conservatives before, but it seems like a great thing when people can feel safe investing at lower rates, knowing that their money is going to go into new community facilities instead of just sitting in an account somewhere. In my organization’s 15-year history, we’ve never had an issue with investors earning their returns.
There’s obviously a lot out there on the rich sharing their economic blessings with the poor, from Catholic Social Teaching to scriptural passages. However, there is also something that we can learn from Thomas Aquinas and virtue ethics in terms of not just measuring our virtues by how well we can take care of the community around us, but also how well we can take care of ourselves. It seems likely enough that we might inherit some money down the road or land a job that pays more than we need. Donating large portions of it can be a great thing, as so many good causes need more financing to go the next mile.
But what if we can take our riches, lend it to organizations that are doing things in line with our values, but then still have access to that money at a later date in case a family member becomes ill, or when we bring a new child into the world, or when a spouse loses a job? I would encourage all of you to explore different Community Development Financial Institutions (CDFI’s for short) that exist that serve the needs of people facing issues that you care about. You can check out the website of the Opportunity Finance Network to learn more about CDFI’s throughout the country that are serving the needs of impoverished people throughout the United States and the world.
With that said, take the time to learn about an organization you might make an investment in, even if you just invest for a year term. Talk to other investors in that organization. Ask the questions that organizations don’t want to answer, like how many loans they’ve defaulted on. Find out if they have an emergency capital fund in case things aren’t going well. With all that is hidden about today’s current financial market, you might find it easier to find transparency at some of these organizations in terms of where your money is going and how it is being used.