I wrote this roundup of opportunities to supplement with finance-specific education for the social business types I know. As I work to figure out where social investing meets social enterprise I’ve identified one key gap: the skills taught for wealth/portfolio management are covered in CFA/CFP type courses and do not overlap AT ALL with banking. Community Investing and Community Economic Development pools are all banking. So a barrier to increasing community investing (take note, Social Investment Forum!) is that most wealth managers have no ability to assess the opportunity. Calvert Community Investment Notes are the one intermediary I know of that links the two by building a pool of funds, doing the underwriting, and wrapping it up and selling the notes like traditional securities. Otherwise, so far, Community Development Finance Institutions are restricted to Banks and a few daring foundations for funding.
Here’s my roundup:
CFA – Certified Financial Analyst
The best advice I’ve gotten on this one: if you want to help people with financial planning, become a CFP, if you want to create or evaluate financial products, become a CFA. A CFA manages portfolios and analyzes stocks/bonds/funds to decide if they’re good investments.
Many traditional MBAs get a CFA in tandem with their MBA because of the overlap between an MBA accounting/finance curriculum and the CFA study program. To become a CFA you have to study for and pass 3 tests. You also have to work in the field. The tests are offered every December and every June and the prep courses run about 18 weeks. After reviewing several and asking advice I’m currently leaning towards Stalla. Seattle U offers a Saturday course that starts in the fall, they use Schweser. Seattle has a very active CFA society chapter with frequent lectures, a book club and some community service. My experience to date is they have little to no SRI component or awareness.
CMA – Certified Management Accountant
A CMA is focused on the skills you want within a single firm to not just do tax reporting (CPA) but make management decisions about efficiency and profitability and controls.
This seems to be a 2nd tier certification – note that Stalla and Schweser have prep courses for the CPA but not the CMA. A friend who had it said it’s more recognized on the East Coast than here. There are local chapters of the IMA (Institute of Management Accountants) in Bellevue and Seattle (and looks like they’re merging right now, so that could be good). It’s the Mt Rainier Chapter in Tacoma that makes me think “These people and what they do rock!”. OMG I had my mind blown at their “Excel Geeks Rejoice” meeting last March. The CMA just switched from a 4-exam to a 2-exam system.
- https://www.gleim.com/accounting/cma/newcurrentcma.php?cmalink=index – a study course company
Banking & Financial Services –
Banking is a different animal than financial management – lending, loan pools, tracking the performance of a single company and estimating their ability to repay debt and pricing risk and then how does that impact the performance of your whole loan portfolio. CFAs do wealth management but have no idea how to evaluate the risk/return of CDFIs, which as I noted above I’m finding is a barrier to more investment in community development financial institutions/loan funds.
Boston University has a graduate certificate in banking & finance. I found it online, I have no idea how good it is, but it gives a sense of the topics covered and how they’re different than investment topics.
Community Development Finance
If you want to do community development or urban planning, there’s yet another financial world – that of tax credits and finance! I’ve found a few different programs here.
NeighborWorks is a national organization focused on strengthening local community development programs with an emphasis on housing. They have a number of certificate programs including “Housing Development Manager Certificate”, but also “Community Economic Development” and “Community and Neighborhood Revitalization”. I attended one institute and took 2 of the 5 courses needed towards the “Community Economic Development” certification. As someone with a strong math background I found them a little weak, but the perspective on what makes a main street work and how to support local businesses was still interesting. In general NeighborWorks programs are geared towards nonprofit employees who are primarily community focused. They’re also very East Coast focused – most of their training institutes are in Philly or DC, sometimes Dallas or Chicago. I lucked into one they had in Portland or I might not have bothered.
National Development Council
While I was in the NeighborWorks 2-day class, folks in that class spoke with intimidation (ooo, sounds good!) of a similar but more intense 5-day training course given by the National Development Council.
They offer certifications as an “Economic Development Finance Professional”, a “Housing Development Finance Professional”, and a “Rental Housing Development Finance Professional”. For the Economic Development certificate they have four 5-day courses: Economic Development Finance, Business Credit Analysis, Real Estate Finance and The Art of Deal Structuring. They also offer a revolving loan fund course, focused on how to be compliant with Community Development Block Grants.
Council of Development Finance Agencies
They offer a Development Finance Certified Professional designation: “The DFCP Program is designed to produce graduates with a comprehensive knowledge of development finance concepts, tools and applicability as well as a deep understanding of the entire development finance spectrum.” Courses in tax increment finance, the New Markets Tax Credit program, bond financing, and revolving loan funds. They also don’t make it up to the northwest, San Diego is where I’ve thought I might go sometime.
You regular readers have probably already figured out that I think the hype and attention GREATLY outweighs the success/usefulness of angel investing. I don’t think this is a good way to learn how to build sustainable businesses. But in the interest of completeness…
The Angel Capital Association is the national association of angel groups and so has good information on how to create/develop angel groups
The Kauffman Foundation developed and forked off a number of resources including a series of courses on angel investing (who got rich in the gold rush – was it the miners… or Levi’s?) http://www.angelcapitaleducation.org/ I’ve taken a few and they offer good advice (step 1: you need to build a portfolio because so many individual deals will fail).
Another program that spun off is a kindof VC internship/Fellowship. It seems mostly aimed at taking people with deep industry experience and bringing them into VC firms. Read the bios of the current class to get a sense of who gets into this. http://www.kauffmanfellows.org/fellowship.aspx
Rounding out my roundup of “how to understand money” I’ll add these:
Institute for Private Investors – https://www.memberlink.net/ twice a year they offer a week-long Wealth Management Program on how to manage your money & assorted pool of advisors. Once with Wharton and once with Stanford (august). 10K for the course, but if you need it, you can afford it. They have a bunch of ongoing stuff but focused around SF and NYC.
The Philanthropy Workshop – http://www.tpwwest.org/ a year long program with a series of retreats to help wealthy folks develop a focus/plan for effective philanthropy.
Conferences/Associations of potential interest
The Community Development Venture Capital Alliance http://www.cdvca.org/ has an annual conference that I found interesting (though it was in DC and so half the conference was about lobbying – I ran into that with AEO as well, I think now for conferences that move around I’d skip the DC incarnation if you’re there to learn.) They have a book worth buying called the CDVCA Equity and Near-Equity Investment Primer.
Association of Enterprise Opportunity www.microenterpriseworks.org – while I mentioned it. A trade association for microenterprise lenders and training organizations. They have an interesting annual conference – lots of info about how to run your microenterprise nonprofit – managing loan pools, helping people with credit repair, financial literacy stuff, software platforms to manage your loan portfolios. that kind of stuff.
Opportunity Finance Network – http://www.opportunityfinance.net/ the trade association for Community Development Financial Institutions like Enterprise Cascadia or Community Capital Development. They’re also an East-Coast focused org but in Nov. 2010 their conference will be in San Francisco!
Thanks to Alex Moore for suggesting I take this BGI-internal post and share it on my blog. He’s a pretty fine blogger on these topics himself.