Recently, within a single week, I received two separate calls, one from a community foundation and another from a family foundation, both based in North Carolina, inquiring how to get started with values-aligned investing (“VAI”). As the volume and frequency of VAI-related conversations increases, it is evident the strategy continues to gain support in the marketplace. Provided my real-time interaction with these local organizations, I would like to share the advice I gave to them with all of you as well. 

Aligning with our experience, the first step I recommend an organization take in order to get its toes wet with VAI is to purchase a certificate of deposit (“CD”) through Self-Help Credit Union. Specifically, Self-Help offers the following three CDs, which generate either an environmental or social impact in addition to providing a competitive financial return:

  • Green Term Certificate
  • Women & Children Term Certificate
  • Go Local Term Certificate

Additional information available at: 

Self-Help is backed by the National Credit Union Administration (“NCUA”), which insures deposits up to $250,000 per entity, similar to how the Federal Deposit Insurance Corporation (“FDIC”) insures bank deposits up to $250,000 per entity. In other words, a CD issued by a credit union bears comparable risk to a CD issued by a bank. 

As of November 2019, a 12-Month Self-Help Women & Children CD yields 2.12%; whereas a Bank of America 13-Month CD yields 1.50%. Similarly, a 24-Month Self-Help Women & Children CD yields 2.22%; whereas, a 25-Month Bank of America CD yields 1.30%. 

In summary, a Self-Help CD will relatively outperform a bank CD both financially and non-financially (i.e. social/environmental impact) while taking the same amount of risk.

When it comes to execution, The Gambrell Foundation prefers to accept the market-rate offered. In this scenario, the foundation would purchase a 12-Month Self-Help Women & Children CD yielding 2.12% and classify it as a Mission-Related Investment (“MRI”) provided it generates a market-rate return and aligns with the foundation’s unique mission. Another approach is to accept a below-market return on this CD and classify it as a Program-Related Investment (“PRI”). For instance, a foundation’s policy could be to accept half the market rate, in which case it would invest in the 12-Month Self-Help Women & Children CD earning a rate of 1.06% (=2.12%/2). 

Brittany Priester

Brittany Priester

Portfolio Manager