Community Investment Funds Overview

An enterprise (nonprofit or for-profit) can raise capital from their community either directly or indirectly. The direct approach is sometimes referred to as investment crowdfunding, a term that includes both direct public offerings (DPOs) and Regulation Crowdfunding. Indirectly, an enterprise can be funded by a Community Investment Fund (CIF) (also known as a Community Investment Vehicle). CIFs help to empower communities by allowing community members, anyone of virtually any economic class, to invest in a community fund which in turns invests in ventures, revitalization projects or other mission driven enterprises. CIFs allow communities to build wealth through a cycle of investment, growth, profit (returned to community investors), and reinvestment.

In this overview, we define key components of CIFs, the benefits and limitations of  CIFs as a capital raise strategy, the various types of CIFs and related regulations.

This resource is helpful for any organization considering community investment funds as a capital raise strategy.