Since 1975, the Cooperative Fund of New England has provided over $26 million in crucial, affordable financing to cooperatives and nonprofits across New England and eastern New York State. Not only have these funds created and retained thousands of jobs and housing units, often in underserved communities, but they have strengthened the user-owned, green cooperative economy.
New England has a strong and growing cooperative economy. As of 2009 this region's almost 900 co-ops:
But many of these co-ops struggle to access credit needed to start-up new co-ops and expand existing ones. As the only financial institution dedicated to growing the region’s cooperative economy, CFNE fills an important niche in attempts to humanize the economy.
We rely on community support to make this happen. The vast majority of our loan pool comes from individuals, cooperatives and community and religious organizations. If you have at least $1,000 available to lend to CFNE for a period of at least one year, consider making that investment in cooperative development. You choose the interest rate, from 0-2%, and whether we repay the loan at a fixed point in time or upon your notification. If you are a cooperative considering lending to CFNE, see our Invest in Co-ops page. For any individual or institution considering lending, please click on our Investment Terms link to the left and call our office (1-800-818-7833) to request a password to the prospectus and discuss if this type of loan is right for your risk tolerance and financial situation. Click here for Prospectus.
In short, by lending to CFNE, you can:
Additionally, CFNE welcomes donations. We run our operation on the margin of our loans - the difference between the interest we owe investors and the interest we earn from borrowers. Because of that, your donations serve either as permanent capital in the fund, which we can leverage to borrow more funds, or to expand our lending and technical assistance program. To make a donation, click on the Donate button in the top right hand corner of your screen.
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For detailed information about CFNE’s Social Investment Loan product, please contact us to request a prospectus and discuss if our Fund meets your needs: 1-800-818-7833.
Social investment loans to the Cooperative Fund are provided on terms chosen by the investor within a range of options including:
The Fund encourages long-term investment. Social investment loans, however, may be called for repayment within a short period of time. For those that are particularly large, the Fund asks that repayment be limited to five thousand dollar increments within each 30-day period after it receives notice of withdrawal.
Social investment loans are not insured in any way or collateralized through secured interests in any property of the Fund. They rest only on the general credit of the Cooperative Fund of New England. Social investment loans are, however, provided with a significant - albeit unusual - measure of security. Several social investors, cooperative organizations included, have agreed to designate their funds as the first to assume losses that would otherwise prevent full repayment to other investors.
Social investment loans made directly to the Cooperative Fund are not tax deductible nor are they included in the income of the investor when they are repaid. Any accrued interest, whether paid out or left to accumulate with principal, is fully taxable to the social investor. An IRS 1099 form is sent out at the end of each year. A social investment loan may, however, be rendered tax deductible when it is provided indirectly through a self-directed individual retirement account with a bank providing such a service. Under this option, funds are deposited with the participating bank and then self-directed for investment in the Cooperative Fund of New England. Funds on deposit in the IRA account may not be prematurely withdrawn without substantial penalty. They may, however, be removed from the Cooperative Fund and redirected elsewhere. Persons desiring to use this tax benefit are advised to obtain further information regarding the restrictions and dollar limitations that apply to the use of this procedure.
Funds remitted to the Cooperative Fund will be acknowledged by a promissory note with the terms chosen by the social investor. Under this note the Fund is obligated to provide financial statements and reports on its activities at least three times a year. The specimen promissory note in Appendix D of the prospectus provides full information as to warranties and obligations assumed by the Fund in its relationship with a social investor.
Third Party Rating
CFNE has been well rated by the CARS tm independent outside review process.
Please see page 12 of our 2011 Annual Report a complete list of institutional investors as of 12/31/2011.
You can also read profiles of some of our investors.
Finally, the following is a chart depicting the CFNE investor mix at 12-31-2012:
CFNE has always had strong support from the faith-based community and socially responsible investment sector. Individuals account for nearly one-fourth of the investor mix. Increasingly, cooperatives themselves are becoming CFNE investors as well as borrowers. Read below to hear, in the words of our supporters, why individuals and institutions invest in CFNE. You can read some investor profiles on our Success Stories page.
One thing bothered Marian Coulter when the Boston-area resident inherited a large sum of money from her grandmother in the early 1996. Her inheritance... was invested in energy conglomerates and companies that she "strongly disapproved of". Click here to learn how she solved the problem.
Coop investors in CFNE include Hunger Mountain Food Co-op, Community Builders, and City Market/ Onion River Co-op.
"Our End is to strengthen and support the co-operative movement by working together. When we relocated seven years ago, we desperately needed support and our co-op neighbors generously provided it. We’re grateful to now be in a position to help other coops. "
City Market/Onion River Co-op
"As one of the older worker cooperatives in New England, we are delighted to be able to invest in the future of the movement by supporting the great work of the Cooperative Fund of New England."
The worker/owners at Community Builders Cooperative
"CFNE took on the hard part of the market…and succeeded in meeting the needs of borrowers while also providing investors with a reasonable rate of interest and a leveraged social impact. That's pretty exciting!"
Amy Domini, Domini Social Investments, LLC
"Cooperatives [are] an economic model that promotes value not just externally but internally... So we fund CFNE and they fund the Co-op.”
Corinne Florek, Mercy Partnership Fund
"It can take a while to undo some of the misconceptions of a traditional financial education that sees these investments as too risky or having too low a rate of return. But our Trustees have become comfortable with certain SRI funds, and that includes CFNE."
Toni Gold, Social Responsibility Fund/ Episcopal Diocese of Connecticut