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May 22, 2023

To Build Wealth in Latinx Communities Across the US, We Need to Invest More Time, Effort, & Money Expanding Access to Financial Education

By Sandra Guerrero, Advisor

For most of their lives, my mother and father worked in the services sector. Driven by their desire to leave a financial legacy for their children and grandchildren, my parents were motivated to learn new skills to acquire and grow wealth. They saved money, sought out learning opportunities, and ventured into real estate. Motivation plus access to financial education gave them the tools they needed to use their hard-earned money to build wealth.

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March 31, 2021

A Much Needed Equitable Growth Era for Community Wealth Building

By Michael Lent, Roraj Pradhananga, & Casey Verbeck

Community wealth building solutions aim to help address racial and gender discrimination and spread prosperity while ensuring sustainable economic growth in historically marginalized and under-resourced communities.

Tragically, the COVID-19 pandemic has exacerbated the inequalities and inequities faced by our most vulnerable communities. The poorest populations, both here in the U.S. and globally, have been the hardest hit in terms of disproportionately worse health outcomes and in loss of income, jobs and educational opportunities.1  The World Bank projected in 2020 that extreme poverty and income inequality for low-income and emerging economies, especially communities of color would rise because of the pandemic.2

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August 6, 2018

Opportunity Zones

By Lori Choi, Partner

“Opportunity Zones” are a hot topic in impact investing these days, but what are they and why might they be important for investors?

Embedded in the new Tax Cuts and Jobs Act signed into law, December 2017, are provisions around “Opportunity Zones.” They ask governors of all states and territories to designate up to a quarter of low-income census tracts as investible zones. The aim is to attract investment to these distressed communities by allowing investors to defer, reduce, or potentially eliminate capital gains taxes over time.

Why is this program important? According to Rockefeller Foundation President, Rajiv Shah, Opportunity Zones represent “the single biggest tax incentive to invest in low-income communities across America that we’ve seen in 100 years.”1 While impact investing champions are cautiously optimistic about the amount of dollars that could flow to low income communities, this new policy is also exciting in its potential to draw more mainstream investors into impact investing. According to the U.S. Impact Investing Alliance “there are currently trillions of dollars’ worth of unrealized gains in the capital markets. If even a portion of those gains are moved to invest in distressed communities, it could have a transformative impact.”2

Investors must invest in Qualified Opportunity Zone Funds within 180 days of selling an appreciated asset to receive the tax benefits, although the number of investment funds being created is still limited. Several of Veris’ impact investing partners are looking into forming Opportunity Zone Funds. We look forward to keeping you updated about how these may or may not be appropriate for your situation and goals.

Investors in Qualified Opportunity Funds will get to benefit in three ways:
• Taxes due on capital gains deferred until December 31, 2026, at the latest.
• Capital gains will be reduced by 10% for investments held 5+ years and 15% for 7+ years.
• Capital gains will be permanently eliminated for investments held 10+ years.

Impact investing champions like the Kresge Foundation3 have come forward to support the creation of Opportunity Zone Funds.

1 https://impactalpha.com/getting-ready-for-the-opportunity-and-peril-in-opportunity-zones/
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July 16, 2018

What’s Next In Community Wealth Building and Social Equality

By Luke Seidl

The past 12 months have been a big opportunity for investors interested in Community Wealth Building and Social Equality.

Judging by the growing number of product offerings, there will be many new ones in the next 12 months.

In this blog, we highlight a few of the opportunities. To see our full analysis, please click here.

Focus on Income Inequality
Almost 19 million renters and homeowners are “severely cost-burdened,” meaning they pay more than half their income toward housing. Growing evidence points to housing as a main driver of wealth disparity in America.

In response, Community Development Finance Institutions (CDFIs), Credit Unions and banks, private equity and real estate fund managers are raising capital to increase the supply of affordable housing.

Inclusive economic growth should be aided by a new program in the Tax Cuts and Jobs Act of 2017 that incentivizes long-term investments in distressed communities designated as “Opportunity Zones.” The Act will enable investors in qualifying funds to defer, and in some cases, reduce taxes on realized capital gains.

Human Rights and Justice
Sustainable investors continue to intensify pressure through shareholder activism to eliminate conflict minerals, human trafficking, child and slave labor in supply chains, and to protect indigenous rights.

In the wake of the Parkland, Florida shooting, more investors are divesting not only from gun manufacturers and retailers, but also the banks financing them. Meanwhile, the newly mobilized Investors for Opioid Accountability (IOA) coalition is working to address companies’ role in America’s latest public health crisis.

Assets invested with a Gender Lens, which are focused on companies empowering women and girls, reached $2.2 billion deployed through 70 public and private equity and debt fund vehicles. Several funds have raised money to focus on broad-based employee ownership or quality job creation in sectors and communities impacted by automation.

The possibilities are growing for impact investors to complement the work of governments and NGOs in creating a more equitable, prosperous and sustainable planet. The arc of history can bend toward justice, but not without the collective intent to make sure it does.

The information, analysis, and opinions expressed herein are for general and educational purposes only. Nothing contained in this piece is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Veris is grateful to its ongoing relationship with Envestnet and Investopedia.com, where this commentary first appeared.