Are you a Note Holder?

This post was written by second year MBA student and CASE Fellow Beth Bafford. Beth reflects on a recent visit from Lisa Hall, President and CEO of the Calvert Foundation.

As we’ve mentioned on this blog before, there is a lot of excitement around impact investing both here at Duke and around the world.  But a big question that has been raised in the field is how to make this new, exciting field accessible to a broader group of investors.  Lisa Hall, President and CEO of the Calvert Foundation, came down to Fuqua earlier this year as a part of our CASE i3 Speaker Series to explain how she and her organization are answering that important question.

Lisa explained to all of us what makes the Calvert Foundation unique (watch the full video of her talk at the end of this post!).  For 16 years, they’ve been raising money to invest in communities both domestically and abroad, but they haven’t been raising money from limited partners (LPs) or high net worth individuals.  Instead, they’ve amassed over $500 million from “everyday” investors through their retail impact investing product, the Calvert Community Investment Note.  This Note – a bond product that returns up to 2 percent annually – can be purchased in three ways:

  1. on MicroPlace where you can purchase the Note in $20 increments,
  2. through the Calvert Foundation directly, or
  3. through their growing list of participating financial advisors who can purchase the Note electronically through their brokerage firm.

Essentially, anyone with at least $20 to invest can proudly call themselves a “Note Holder.”

When the money comes in from these individual investors, the Calvert Foundation lends it to organizations in multiple impact areas, including affordable housing, small business development, fair trade, microfinance, and the environment.  (You can see where the money is lent and the impact it is having in this cool interactive map.)

Another unique thing about the Calvert Foundation is their incredible track record.  They’ve incurred losses of less than one percent on their loan portfolio over the last 16 years, and because of their security enhancements, they have a 100 percent repayment rate to their investors.  So not only can anyone buy a Calvert Community Investment Note, but the risk of doing so is extremely low.

Lisa also discussed her vision for the field and what role she sees the Calvert Foundation playing.  What they are trying to do is create both a “push” and “pull” strategy (in business school terms) to create more demand for impact investing products so everyone can be an impact investor.  The “push” is through the education of financial advisors so they can talk with their clients about the benefits of putting a portion of their portfolio into impact investments.  The “pull” is through the education of consumers so they understand the power of their money to create a positive impact.  The ultimate goal is to increase the pool of capital available to support community building entrepreneurs so their impact on society can be scaled.

As soon as I left Lisa’s talk, I called my financial advisor (also known as my mom) and asked her to purchase a Calvert Community Note for my portfolio.  At first she wasn’t sure how, but after a few days of speaking to RBC (her firm) she was able to purchase the Note electronically, as she does with any other security.

I’m now extremely proud to say that I’m a Note Holder.  Are you?

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3 Responses to Are you a Note Holder?

  1. Vivek Garg says:

    Dear Beth,

    Thanks for this amazing post explaining Calvert Community Investment Note model. It is a great learning for me that how Lisa has not only put across a very innovative model to generate investment fund but has achieved the credibility and delivered impact through establishing a user friendly, transparent investment model allowing investor to not just track but also measure the social impact of one’s investment. I think her perspective on building a strong back end support makes Calvert model stand out and is a great learning value for those thinking of pursuing Impact Investment field.

    I thoroughly enjoyed the blog.

    Best,
    Vivek

  2. Pingback: What is Impact Investing and How Does It Work? | CASE Notes

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