Credit where it's due: Green credit unions do well by doing good.

While many of us may feel we don't have the extra money, let alone the spare time, to take the plunge into the vortex of socially responsible investing (SRI), just about everyone has a bank account. A developing trend in banking allows customers' deposits to be used to fund low-interest loans to socially responsible small businesses and nonprofits. Banking customers looking to "do well by doing good" can choose from several different types of socially responsible financial institutions offering such deposit-based community investment and sustainable development programs.

Cooperative Credit Unions

One form of these SRI banking vehicles is the nonprofit credit union, which is typically owned and run by depositing members (also known as customers). Credit unions have existed in the United States for a century. Today, more than 10,000 credit unions with $480 billion in assets serve more than 79 million Americans.

Members entrusting their deposit and checking accounts with credit unions can save and borrow at reasonable rates with the same peace of mind as when using traditional banks thanks to federal insurance protections. The pooled deposits are used to make loans to other credit union members, with oversight by elected volunteer boards.

North Carolina-based Self-Help Credit Union is a good example. Since its inception in 1980, Self-Help has provided nearly $2 billion in financing to more than 25,000 small businesses, nonprofits and homebuyers in North Carolina and beyond. The organization's mission is to create ownership and economic opportunities for minorities, women, rural residents and low-wealth families, and it factors environmental responsibility into its loan approval processes.

Like most traditional banks, Self-Help offers its customers savings and money market accounts as well as certificates of deposit (CDs) and individual retirement accounts (IRAs)--all federally insured and offering market rates of return or better.

Self-Help's Sustainable Development Lending initiative lends to businesses and nonprofits focusing on conservation, recycling and smart growth projects. So far, the program has provided $25 million via 191 loans to a wide range of sustainable development enterprises including organic farms, recycling businesses and ecotourism firms, which in turn have maintained or created 1,500 jobs within North Carolina.

"We are undoubtedly the biggest lender to environmentally oriented companies in North Carolina," says Malcolm White, Self-Help's communications director.

Green credit unions are not limited to the Southeastern U.S. New Mexico's Permaculture Credit Union sponsors a variety of sustainable projects. Australia's Maleny Credit Union has a micro-savings fund to provide no-interest loans for projects that reduce greenhouse gas emissions, retrofit energy systems with specific pollution-reduction technologies or offer special discounts for green buildings.

Old Dogs, New Tricks?

Some traditional banks are also making inroads into the social responsibility arena. Chittenden, Vermont's largest bank, offers a socially responsible banking (SRB) program that helps local communities by providing an important source of lending capital. Customers who elect to bank through this program may forego higher interest rates so that Chittenden can make their money work for community development projects.

The bank in turn passes these lower interest rates on to community groups, educational institutions, small family farms, conservation groups and downtown revitalization projects.

"We feel it is a great way to share our community development loans with our depositors. It's really a type of community investment," says Cynthia Gubb, who manages the program for Chittenden.

In one recent example, funds provided working capital for the Richmond Land Trust to purchase and preserve 230 acres of prime farmland and forest that provides an important local resource base. Chittenden worked with a diverse array of state agencies, foundations and nonprofits to make the deal happen.

Chittenden's SRB program came along with the bank's 1999 acquisition of Vermont National Bank, which had been running a similar program--much to the delight of depositors and small green businesses and nonprofits--for a decade already.

"At the time of the acquisition, we took a look at what the program had accomplished, and how it was perceived in the community, and realized it was a pretty good thing," says Gubb. "So we made some tweaks and now it is going stronger than ever."

Indeed, when investing in sustainable development is as simple as depositing money into an interest-bearing savings or checking account, what excuse do any of us have for not putting our money where are mouths are? CONTACT: Chittenden Bank, [phone], www. chittenden.com/socially-responsible. html; Self-Help Credit Union, [phone], www.self-help.org.

RODDY SCHEER writes about money matters for E.