Community Investment Funds (CIFs) can be powerful tools for empowering communities and supporting economic democracy. They do so by investing in new or growing businesses, real estate revitalization projects or other mission driven enterprises within their defined communities. CIFs are community-centered and community-managed (through community leaders, supporting nonprofits or collectively by the larger community). CIFs help build vibrant communities through a cycle of investment, growth, impact, return (to community), and reinvestment.
Community Investment Funds are typically much smaller than mutual funds and are focused narrowly on their impact missions. CIFs are responsive to community challenges and needs and are designed not to extract resources away from the community. CIFs are designed to be exempt from the burdensome and costly regulations to which mutual funds are subject. CIFs can be conceptualized, controlled or housed in nonprofit organizations or they can be set up and managed as for-profit impact funds. Capital can flow into the funds through private or public capital raise strategies. Depending on the exemptions and capital raise strategies employed by the funds, some CIFs can offer investment broadly to the public and allow investors of all means to participate, which in turn can allow for direct community control of the fund.
Cutting Edge has served as legal counsel to many community-centered investment funds, assisting the funds on legal strategy, structure, and capital raise document preparation. We believe that CIFs are an important tool as we move to create a more just and equitable economy. Some of our representative fund clients are listed below along with a short description of their mission and impact.
Black Farmer Fund – The mission of Black Farmer Fund is to nurture Black community wealth and health by investing in Black agricultural systems in the Northeast.
WePower – This for-profit impact fund is structured to invest in Black & Latinx founders and entrepreneurs who participated in an accelerator program offered by the fund’s partner nonprofit.
Community Vision – This charitable loan fund provides capital and technical assistance for communities that have been systematically disadvantaged to ensure fairness in opportunities, resources, and rights for everyone.
Shared Capital Cooperative – This is a national cooperative lending and investment fund for co-ops of all types and sizes.
REAL People’s Fund – This community capital fund offers equitable access to finance for small businesses in the historically disinvested communities of the San Francisco East Bay.
ESO Ventures – This loan fund and incubator program provides Black and Brown communities with the confidence, competence, and capital to take their early-stage business idea to the next level.
LENDonate – This marketplace lending fund and platform assists nonprofits to efficiently receive the capital they need to grow.
PV Grows – This charitable loan fund offers opportunities for individuals, institutions and foundations to invest in building a healthier food system in the Pioneer Valley of Massachusetts.
CoPeace – This impact holding company fund focuses on investing in climate solutions, cleantech innovation, economic equality and social justice enterprises.
Foodshed Capital – This charitable loan fund supports regenerative farmers and food entrepreneurs who have historically faced barriers to traditional capital.