June 18, 2007
One and Two Percent Allocations Add Up for Social and Community Development
by Anne Moore Odell
TIAA-CREF allocates 2% of its Social Choice account for proactive social investments while the
Social Investment Forum and Co-op America's 1% or More for Community campaign aims to double the
amount invested in community development.
Investors can make a big difference by assigning a small percent of their assets to social
investments and community development. For the past six years, Co-op America and the Social Investment Forum's "1% for Community " campaign has
signed up institutional investors to dedicate 1% or more of their assets for community development
programs. TIAA-CREF recently announced that it will
invest up to 2% of the CREF Social Choice account in community-oriented investments.
TIAA-CREF is the largest supplier of
retirement services in the academic, medical, and cultural fields. The CREF Social Choice account
has $8.9 billion in net assets as of March 31, 2007, which makes a 2% allocation a substantial
amount of money. By the fourth quarter of 2007, it will start reporting its progress of hitting its
"We continue to listen to our participants views on a wide range of social
investing issues and understand that making investments that support social and environmental
issues are important to many of them," said Scott Budde, Managing Director and head of TIAA-CREF's
Global Social and Community Investing Department. "Our new target for proactive social investments
in CREF Social Choice will help address a wide range of pressing social problems through
market-based solutions that can also generate competitive returns for our clients and is a natural
extension of our existing microfinance and community investing programs," Budde added.
TIAA-CREF will use the 2% allocation to invest with publicly traded fixed income securities
that help to finance economic development programs, affordable housing and alternative energy. The
securities will be both domestic and international, and will be selected by TIAA-CREF's Global
Public Markets group using the same criteria as TIAA-CREF's other fixed-income investments.
TIAA-CREF already has in place the TIAA Traditional account that invests in the private market
and makes some of its investments in microfinance, affordable housing, and community development.
The new allocations of the Social Choice account are designed to work with the investments of the
TIAA-CREF joins a growing trend in social accounts supporting
"An awareness of the powerful role community development plays in
uplifting low and moderate income communities across the US and abroad, coupled with a call to
action through socially responsible investing has resulted in a surge in community investments over
the past six years," said Prianjali Mascarenhas, Community Investing Program Manager, for the
Social Investment Forum.
The 1% or More in Community Campaign, organized by the Social
Investment Forum (SIF) and Co-op America, helps socially responsible investors move money into
community investments. The campaign reports that the community-investing field has quadrupled in
size, with approximately $15 billion in new assets since 2001. Current community investing figures
stand at $20 billion in 2006.
"As one of the leading providers of retirement services we
applaud TIAA-CREF in joining the ranks of other SRI mutual funds that have incorporated such an
allocation. The allocation is in line with the Forum's 1% or More in Community Investing goal,"
Mascarenhas told SocialFunds.com. "This is a great new flexible community investment vehicle that
demonstrates how mutual funds can allocate a percentage of the fund's assets to investments in
affordable housing, alternative energy and jobs creation. "
"The 2% allocation is a good
starting point for individual investors looking to explore Social Choice and its equity and fixed
income securities. The investment is attractive both from a low-risk and high return perspective
that holds investors values as a priority," Mascarenhas added.
Recent events such as
Muhammad Yunus's Nobel peace prize have helped push community investing into the mainstream.
The Federal Government has also played a role in providing incentives to encourage investments
into Community Development Financial Institutions (CDFIs). One example of this is the Certificates
of Deposit Account Registry Service (CDARS). This service allows small, medium, and large-sized
community banks to offer customers up to $30 million in FDIC insurance through a single bank
relationship when investing in certificates of deposit at CDFIs.
The 1% or More in
Community Campaign is working to sign up new investors, increase the amount current members have in
community investments, and recognize the institutional and individual investors who support
"Yes, an allocation of just 1% or 2% can make a difference,"
explained Mascarenhas. "It's simple, it's doable, it's easy to calculate and the numbers add up to
a lot! Community investments as a result of a 1% allocation have harnessed latent skills and talent
in low-income people, giving them a renewed lease on life. The 1% or 2% allocation has
long-reaching impacts on the lives of low-income people at the same time having a negligible impact
on our portfolios."
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