Nun Funds: The Original Impact Investors

3 women posed at the sides of a sign.
The Sisters of Mercy were New Hampshire Community Loan Fund’s first investor in 1984. The loan helped establish the Meredith Center Cooperative, the first resident-owned manufactured housing cooperative in the U.S. Photo courtesy of the New Hampshire Community Loan Fund

Decades before the community development sector began creating strategies to attract the assets of individuals for social causes, numerous congregations of Catholic nuns across the U.S., also called Women Religious, were doing just that—with little fanfare or recognition.

Rising from a practice of shareholder activism that began in the 1970s, Women Religious soon made the leap from monitoring their investments on Wall Street to investing directly in the communities and social justice causes for which they cared.

The leap meant putting a portion of their retirement funds and other capital at risk by investing in organizations and programs that would not easily get financing elsewhere. It was a new way of operating for many congregations, and that meant creating new systems, alliances, and sometimes organizations.

Women Religious, Leaders in Lending

Women Religious (the term that sisters or nuns more commonly use to describe themselves today) have played an instrumental role in the Catholic Church working as teachers, nurses, administrators, social workers, and more. Their numbers peaked in the mid-1960s, when there were approximately 180,000 sisters in the U.S. Today there are fewer than 50,000, a 72 percent decline. There are more sisters over the age of 90 than there are under the age of 60, and only 1 percent of sisters in 2009 were under the age of 40. Today’s sisters are associated with approximately 200 religious orders, down from over 300 orders just 20 years ago.

There is no one factor causing the wane in women joining religious orders in the U.S., and the reasons vary for each congregation. Vicki Cummings, chief financial officer for the Sisters of the Holy Names of Jesus and Mary noted that 60 years ago, if you were female and wanted an education and a meaningful vocation, joining a religious order provided that opportunity regardless of your means or station in society. Today, women have many more avenues available for obtaining an education and a career. According to Cummings, in her 30 years of working with the sisters in two different congregations, less than 10 women have joined.

The Sisters of the Holy Names currently have 400 sisters, with an average age of 80. Only 75 of the sisters are still working, and while they receive Social Security benefits, and some have pensions, the primary source of revenue to support them in retirement is the money they have accumulated over the years from the sisters’ salaries and stipends.

Articles have been written theorizing the reasons for the decline in the number of people joining religious orders in the U.S., but whatever the reasons, the number of sisters is in definite decline. For many congregations, this trend has impacted both the way the sisters invest their funds and the amount of money available for investing. For example, some congregations are pooling their funds so that they can streamline administration and continue to make sizable loans.

Pioneering Efforts

Some of the earliest efforts at impact investing by Women Religious can be traced to the Adrian Dominican Sisters, an international congregation of 600 avowed religious women and 200 associates headquartered in Adrian, Michigan. Beginning in 1974, they created the Portfolio Advisory Board to advocate for the responsible use of individual and corporate financial resources by promoting shareholder action.

Through their involvement with the Interfaith Center on Corporate Responsibility (ICCR), the sisters became aware of redlining practices and made their first investment in 1977 to South Shore Bank. In 1978, they formally established an alternative investment loan fund with the purpose of providing low-interest loans, deposits, and other investments. The sisters chose to invest their money as loans, rather than give grants, so that they could create partnerships between themselves and the organizations they financed. According to Sister Corinne Florek, OP, executive director of the Religious Community Investment Fund, the Adrian Dominican Sisters have made 534 loans totaling $31,340,720 since the inception of their loan fund.

The Sisters of Charity of Cincinnati were also pioneers in lending when they created the Seton Enablement Fund in 1979. They dedicated a portion of the congregation’s unrestricted funds for loans to organizations committed to helping economically disadvantaged people develop themselves and their communities. According to Sister Martha Walsh, S.C., as the number of sisters in their congregation decreased, they became less active in the community. To expand their ministry, they needed a new approach.

Sister Mary Assunta Stang, S.C., was president of the congregation when she had the idea to extend their ministry by investing in organizations that were working with people living on the community’s margins. They started out by investing $4 million; today the fund is at $8.25 million. To date, they have made 389 loans totaling $28,837,500, with the majority of the funds going to affordable housing.

Woman posed in front of an orange tree.
With the help of Shared Interest and the Thembani International Guarantee Fund, Rietkloof, a 300-hectare farm in South Africa, is now owned by a cooperative whose member-owners learn new skills and work together to improve their community. Mercy Partnership Fund was one of Shared Interest’s early investors. Photo courtesy of Shared Interest

The Sisters of Mercy were also among the pioneers in impact investing. In the 1970s, they invested in organizations working in the spirit of their founder, Catherine McAuley, who had a deep commitment to the underserved, specifically women and children. Beginning in 1995, several communities of Mercy sisters came together and combined their resources to expand their alternative investing program. They distributed the loan funds according to a set of goals and objectives that they created together. These low-interest community investments were formalized in the Mercy Partnership Fund, which continues today under the name Mercy Investment Services. According to Sarah Smith, director of the Mercy Partnership Fund, between 1995 and 2016 the fund made 268 mission-driven investments totaling $66 million in support of U.S. and international initiatives and throughout the United States.

There is no definitive accounting of how many congregations of Women Religious directly invest in low-income communities and social justice organizations, nor is it known how much money in total Women Religious have loaned (in large part because there is no national database or organization that collects this information). However, one can assume that the numbers are substantial based on the asset base of the Women Religious and their social justice mission.

The sisters’ asset base is as significant as it is because of their frugal lifestyle, hard work, and judicious saving to ensure that they could care for themselves as they aged. According to a 2016 study by retirement plan administrator Mercer, 407 congregations of Women Religious reported to the National Religious Retirement Office that they had 37,268 sisters with $9.8 billion assets targeted for retirement. And while this is a big number, Mercer’s study makes it clear that there are not sufficient savings to cover the full per capita cost of retiring sisters based on its actuarial projections. In essence, the sisters really cannot afford to lose any of their assets, making their choice to use a portion of their funds for impact investing a strong statement of their commitment to social justice causes.

The Sisters of the Holy Names of Jesus and Mary is an example of how even a relatively small congregation can produce significant results by investing a small percentage of their retirement and other funds in housing and community development organizations and projects. Their loan fund is currently at $6 million, with some 20 loans outstanding. 

Support to Community Development Financial Institutions (CDFIs)

The funds created by Women Religious were important to the initial growth of the Community Development Financial Institution (CDFI) sector by providing early financial support, participating on boards and, in some cases, starting CDFIs. Many CDFIs across the country can trace their roots to religious congregations.

Partners for a Common Good (PCG) based in Washington, D.C., began as a loan fund in 1989 under the leadership of Adrian Dominican Sister Carol Coston, OP. Established as a series of limited partnership funds, PCG (1989-1994) and PCG 2000 (1994-2000) attracted investments from close to 100 religious institutions. PCG became a certified CDFI in 2000 and currently provides access to capital for over 100 organizations engaged in economic development.

The Leviticus Fund, a certified CDFI, was created in 1983 by a group of New York area Catholic Churches that were members of the Tri-State Coalition for Responsible Investment. Sister Pat Wolf, RSM, was the director of the coalition when the fund was created, and sisters continue to sit on the governing board today. One of the first loans made by the Sisters of the Holy Names of Jesus and Mary was to the Northern California Loan Fund, which was started with the help of Sister Patricia Bruno, OP, a Dominican Sister of San Rafael.

The ability of sisters to invest capital in communities of need helped fuel the CDFI sector early on, and continues to play an important role today, as evidenced by the investor lists in the annual reports of hundreds of CDFIs across the country.

Business Savvy Lenders

The business of lending has become more complex over time as portfolios of loans have grown. At the same time, the capital that many congregations have available to lend is shrinking as more is needed to support aging sisters in retirement. To address this conundrum, Women Religious have embraced some innovative collaborative models for moving their money into the community.

Religious Communities Investment Fund (RCIF) is a model of a successful collaboration. Faced with both declining human and financial resources, a group of sisters came together in order to more efficiently operate a loan fund and make larger loans. RCIF began in 2008 when Sister Corinne Florek, OP, was coordinating a group of sisters through a collaborative economic justice group based in California called JOLT that had started pooling small amounts of money for investing.

Initially, 11 congregations contributed a total of $3 million to launch RCIF, and grew the fund to $5 million so that it could become an accredited investor. Today, the fund has grown to $10.4 million. RCIF has made $19 million in loans, the bulk of which goes to nonprofit loan funds and community credit unions that in turn invest in their communities. Some funds are also invested directly in nonprofit organizations for specific projects. “RCIF’s focus is on empowering organizations, rather than telling them what to do. [RCIF] doesn’t focus on the deal, but looks at the big picture,” says Florek.

Some of these funds are growing by obtaining capital from places other than the congregation’s retirement or operating funds. For example, funds that have become certified CDFIs, such as PCG, are eligible for federal financial assistance. Because they have diversified their capital base, they will likely remain strong and continue to grow going forward.

The Dignity Health Community Investments Program is another interesting collaborative model that leverages the assets of a large corporation for impact investments. The program started in the 1980s when Catholic Healthcare West (CHW) was founded by two congregations of the Sisters of Mercy who joined their 10 hospitals together. Soon five more religious congregations who sponsored hospitals joined CHW. The sisters recognized that by bringing the hospitals together under one umbrella entity, they could have better economies of scale. All of the assets of the hospitals were merged within the umbrella organization, and from the beginning the sisters had an investment policy that included community investing and shareholder advocacy. In 2012, the name of the hospital group was changed to Dignity Health, and it has grown into one of the largest health systems in the nation with 400 care sites in 22 states.

The Dignity Health Community Investments Program is devoted to making a positive change to social determinants of health, particularly on those affecting economically disadvantaged communities. According to Pablo Bravo, Dignity Health’s vice president of community health who took over fund administration from a retiring sister 15 years ago, the program has $120 million in capital and currently has $82 million in low-interest loans deployed to nonprofit community development organizations. To date, over $160 million has been loaned to support environmental, housing, arts, education, food access, and health organizations and programs.

According to Bravo, the best benefit of the fund is that “their capital is a beacon that shines a light on potential areas where other more traditional capital can follow with investments.” For example, Dignity Health was an early investor in Federally Qualified Health Centers (FQHCs) and was able to prove to more traditional lenders that FQHCs were safe investments. When others arrive to invest, Dignity Health moves on to the next area, thus requiring constant innovation. Bravo’s advice to hospitals considering these types of investments is to set aside money and begin by partnering with experienced CDFIs to deploy in specific areas of need that relate to their service delivery.

For all of the funds highlighted, the default rate has been minimal. Typically, there is an individual, often a sister, who administers the fund, and a committee of individuals that reviews and approves potential investments. Dominican Sister Margaret Diener, chair of the RCIF board, notes that the loan funds run by Women Religious have become more sophisticated over time. She believes that the key to success is building active relationships and a process that dignifies the borrower and their creativity and capacity.

“Community investment succeeds because it is a testimony to good relationships and clear communication. The success of our economy as a whole depends on trustworthiness. Systems succeed when they are built on relationships and trust and when that fails, the systems fail,” she says.

What’s Next?

Women Religious’ story—and continued journey—in impact investing is as pragmatic as it is aspirational. The money they invested was what they would rely on to care for their sustenance and retirement. It was a big, risky step, but they embraced the challenge and have done amazingly well, with no regrets, few losses, and a tremendous amount of positive change along the way.

As the number of sisters in the U.S. drops precipitously, along with their capital, this important, pivotal resource for community development is at risk. This downward trend is being offset by some through collaborations with other funds and diversification of their asset base. However, for funds that rely solely on the sisters’ retirement and operating funds, the pot is shrinking. Thus, it is incumbent upon the community development field to ensure that other institutions and individuals adopt this important model so that such widespread innovation and impact is not lost.

[Correction:This article originally stated that Mercy Partnership Fund was a certified CDFI, which it is not.]

Dee Walsh is the executive vice president and chief officer of strategic development for Mercy Housing (MHI). Walsh oversees the work of the Mercy Loan Fund and MHI’s four regional offices. She previously held leadership positions with the Network for Oregon Affordable Housing, REACH Community Development, and Housing Partnership Network.


  1. Thank you for a well written and well researched article. It is both inspiring and depressing. Inspiring because these women display a rare courage, creativity, business savvy and justice oriented vision. They understand the power that capital investment plays in creating opportunity and equity. Depressing because their communities are dying and we have very few examples of other communities rising to take their place. In the 1980’s nuns played a big role in getting our new community land trust off the ground. They were among the first to support our work. 29 years later we still going strong. Brava to the sisters – they have my utmost respect and gratitude. The world is kinder and better off because of their actions.
    Sandy Bishop, Lopez Island

    • Thanks for the feedback. I got intrigued by this story while raising money for my former employer, NOAH. It is a remarkable legacy and I wanted others to know about it.

  2. I would like to echo Sandy’s comments. Dee, thank you for documenting and making visible the groundbreaking contributions made by Women Religious. While I’ve had a sense that they have played an important role in community investing, I had no idea how large or courageous their participation has been. Thank you for bringing to light an important story that many of us in the field might not have otherwise fully known.

  3. Yes, Dee, loved the article. Having worked with Sister of the Holy Names of Jesus and Mary, I’ve always been impressed by how innovative and thoughtful the sisters were (not to mention badass). They walked the walk long before many of us in impact investing joined the field. Thanks for highlighting their early work!

  4. I serve as Executive Director of the Local Enterprise Assistance Fund (LEAF) a CDFI that supports cooperatives throughout the country and provides technical assistance and loans to small businesses in communities of color in Boston. LEAF was established almost 38 years ago and the Adrian Dominican Sisters were among the first investors in the fund. The support of Mercy Fund, RCIF, Seton Enablement Fund, Sisters of Providence of St. Mary, Sisters of St. Francis of Philadelphia, among others, has been key for the establishment and growth of LEAF. In my opinion, this initiative of the sisters has been a catalyst for the development of what we now call the CDFI Industry and, as the title of the article implies, the emergence of the SRI and social impact fields. Thank you Sisters and thank you Shelterforce for a very nice article.

  5. Thank you for this. In 1994, a Sister of the Holy Family of Nazareth in Pittsburgh PA apprenticed with the Sisters of Mercy then founded Nazareth Housing Services, which now partners with the McAuley Ministries Foundation (a Sisters of Mercy spin-off) and others to provide no-cost home repairs to homeowners in low income communities.

  6. I found it so affirming to read this article. It reminded me of the absolute joy I felt in working with one of the Sister of Mercy efforts, McAuley Institute (sister organization to Mercy Housing) that closed their doors in 2003. McAuley Institute, based in Silver Spring, MD, worked nation-wide to provide loans and technical assistance to nonprofit housing developers who happened to be mostly lead by women community leaders. I was always so deeply impressed by the commitment, passion and sharp intellect of Mercy Sisters and their incredible example of compassionate leadership combined with business acumen. Thank you for the article.

  7. I proudly worked with the Adrian Dominican Sisters in the PAB Office from 2002-2013. I remember fondly many of the names and organizations mentioned in this article. Keep up the good work, Sisters!


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