Federal Reserve Bank of San Francisco

Community Development

NCIF Social Performance Metrics: Increasing the Flow of Investments in Distressed Neighborhoods through Community Development Banking Institutions

Author(s): Saurabh Narain and Joseph Schmidt

August 2009

Community Development Investment Review

Is it possible to develop a practical methodology that differentiates community development banking institutions from all other banks and thrifts? Can we create a direct correlation between a bank’s community development activities and the level of investor support that it receives, resulting in a “reward” tied to the developmental impact of these institutions? Can we actually measure this social return for investors and stakeholders and combine social return with financial return to generate a total return that is higher than the total return achieved from mainstream investments?

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