New Players, Trusted Game: Millennials Hack Social Reform Through Community Investment

PHILADELPHIA, March 17, 2016 -- From his recent public support of immigration reform to decrying racism in his own company, Facebook Founder and CEO Mark Zuckerberg continues to make headlines for his commitment to social justice. Last year, he put his money where his keyboard is by pledging to direct 99 percent of his Facebook shares to advance human potential and promote equality. Zuckerberg is just the latest in a new wave of investors to commit to impact investing. A new report released by Opportunity Finance Network (OFN) illustrates that while Community Development Financial Institutions (CDFIs) have been around longer than this current wave of "hacker philanthropists" have been earning a paycheck, these community lenders may present a new opportunity for innovative investment.

"What may sound like a new trend is a trusted practice in the CDFI industry," said OFN President and CEO Mark Pinsky. "CDFIs' long-standing history make them an attractive choice for a new breed of investors, including the next generation who are rapidly assuming the role of directing private endowments and family offices. These new investors should note that while CDFI investments that focus on the alleviation of poverty through social reform take time, the potential for eventual returns and impact is strong. "

Social investor Leah Pillsbury knows the value of reliable CDFI investment firsthand. Pillsbury has seen her investments in Reinvestment Fund, a Philadelphia-based CDFI, contribute to the development of affordable housing and food cooperatives. “As an investor, I don’t like risk. I don’t even like riding on rollercoasters,” said Pillsbury. “With Reinvestment Fund, I know what I’m putting away, for how long, and I know what my return is going to be. I know that while Reinvestment Fund has my money, it’s going to be put to work for something I care about.”

In CDFI Futures: An Industry at a Crossroads, author Jeremy Nowak, community development expert and president of social investment consulting firm J. Nowak Associates, cites society's increased interest in justice as a renewed galvanizing force for the CDFI industry to not only continue its mission-driven work, but also to adopt new technologies and identify investor opportunities. "The CDFI world, along with its strong, mission-aligned investment supporters has to take a focused approach to connecting its practice with the impact investor appetite," Nowak writes.

The report comes at a time when CDFIs are at a critical turning point as millennials' socially conscious positions continue to align with their pockets. 

Download a full copy of the report here.

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Jackeline Stewart | [email protected]