At Revalue, we believe that investing can and should reflect who you are and what you care about. One of the ways we help make values-aligned investing possible is through support for clients exploring community investing. For over a decade, we’ve offerededucation, shared resources, and developed processes to support thoseinterested in making community investing part of their broader strategy.
What exactly is community investing? In this post, we’ll explain what it is and where it came from. Ifyou're curious about how it might fit into your own portfolio, be sure to checkout Part 2 of this series for more.
What Is Community Investing?
Community investing refers toinvesting your dollars directly into businesses and organizations that operatein and serve local or regional communities. These may include privately heldbusinesses, real estate projects, or loan funds working to expand access toresources (examples may include investing in a local farm, cooperativebusiness, affordable housing project, or a community loan fund). Theseinvestments can allow individuals to support local development, create socialor environmental impact, or foster a more inclusive economy.
All investments come with risk,and community investing is no different. However, how the risk is evaluated candiffer significantly from public market investing and has its own set ofcomplexities. Because there is no secondary market for community investments,your money is tied up (aka illiquid) until a stated maturitydate. This means that you cannot sell your shares and access your money in thesame way you can with public market investing. If this type of risk fits intoyour financial plan, community investing is a way to circulate money in yourown backyard and directly support the businesses you care about.
Since community investing doesnot often come up in traditional finance conversations, finding educationalresources or a support system can be difficult. Revalue not only compiles theseresources but also brings together a community of like-minded investors and aservice team equipped to support your community investing journey.
A Brief History of Community Investing
Community investing is not a newidea. Historically, many individuals kept their wealth local—investing inneighborhood banks, supporting nearby businesses, or pooling resources throughcooperatives. But over the last century, financial systems shifted towardcentralized models that concentrate capital and limit access for everydayinvestors.
In the U.S., regulatory changesduring the 1930s and 1940s created barriers to direct investing for mostpeople, reserving access to private investments largely for high-net-worthindividuals. Over time, this created a gap in both access and opportunity thatpersists today.
Recent changes, including the 2012 JOBS Act, have started to open new doors. More individuals, includingthose who are not accredited investors, can now legally participate in someprivate offerings. While these options are expanding, the community investmentlandscape remains nuanced and requires care in evaluating risks, returns, andfit with one’s broader financial plan.
At Revalue, our role isn’t todictate what the future economy should look like. Instead, we aim to help morepeople participate in shaping it. Community investing is one of many tools thatcan be used thoughtfully and intentionally, depending on your goals and risktolerance.
Read Part 2 here
