Community and proactive investing refers to [socially responsible investing] strategies designed to have some direct, positive social impact stemming from the actual investment.

For many investors, this direct connection between their investment dollars and positive social impact makes community investing an appealing SRI strategy. For example, some investors simply find the tangible nature of a community bank deposit more appealing than the often less tangible benefits of social screening or proxy voting.

Typically, the term "community investing" refers to investment options with a strong local or geographic connection. This would include both domestic options such as investing in underserved communities or international options such as microfinance.

"Proactive investing" is an emerging term that broadly refers to investment strategies outside of social screening that have some positive social impact, compared with conventional strategies. Such proactive investing would likely include many community investments and investments in companies or projects geared around broad, proactive environmental or social themes, such as alternative energy or regional economic development.

In the United States, the political and legal victories of the civil-rights era gave way to the persistence of economic inequality among historically disadvantaged minority populations. Structural barriers were high and extensively limited opportunities for certain segments of the population.

Scott J. Budde, Investment News