While his overall returns in conventional IRAs were good, averaging between 7.5 percent and 10 percent, the money ended up being invested elsewhere in the country or overseas.
“It’s one of those things that’s bugged me for years,” said Chamberlain, 60. “I ought to be able to do what I want with my money instead of having it sent to China or India. Why can’t I direct where my money will go?”
Last spring, Chamberlain stumbled across a snippet of information from the Rudolph Steiner Foundation. He went on their Web site, www.rsfsocialfinance.org, and discovered the San Francisco-based group offered exactly what he sought.
Using a passive custodian, the program allows people to steer IRA funds into projects and organizations aligned with their values.
He tried it out, investing a small portion of his retirement funds with the foundation and earmarking the money for projects in sustainable agriculture.
But Chamberlain and his wife, Betsy, wanted their IRA investments to benefit Missoula, too.
“I can’t have a successful retirement if the community isn’t fully successful,” he said. “I’m a believer in the power of entrepreneurs and small business.”
So, he started talking about self-directed IRAs with Rosalie Sheehy Cates, executive director of the nonprofit Montana Community Development Corp., which does lending and consulting for small businesses. They set up an inaugural one in July.
Cates said Chamberlain’s idea meshed well with the nonprofit’s three-year, $10 million capital campaign. Of that, they hope to raise about $500,000 in community investments.
“A lot of people talk about socially responsible investing, but Wayne brought it home,” Cates said. “We need the capital and are ready to put it on the street.”
Chamberlain’s $50,000 unsecured loan will be with MCDC for two years, earning 4 percent annually. The rates on these types of loans will be between 0 percent and 4 percent, Cates said.
“Wayne’s money could have gone to a day care, a small manufacturer, a local retailer or any of a number of local Missoula employers,” she said.
Chamberlain doesn’t mind the lower yields of some socially conscious investments, saying nonprofits stimulate the local and state economy.
“The value of the investing locally far exceeds what we’ve lost in income,” he said. “I prefer having my money invested here and raising Missoula’s boat rather than … Beijing’s boat.”
He said he will probably forgive the interest he earns on the account, allowing MCDC to plow the money into other ventures.
“This is what my wife and I call paying our ‘social tithing,’ ” he said.
Chamberlain, formerly a fire captain in southern California and executive director of Blue Mountain Clinic, said nonprofits stimulate Montana’s economy.
Missoula has more nonprofits than elsewhere in the state, said Brad Robinson, member services director at the Montana Nonprofit Foundation and co-founder of Big Sky Brewing in Missoula.
There are 1,971 nonprofits in Montana that are legally allowed to solicit charitable donations and provide tax deductibility for donors. Robinson said those nonprofits had combined assets of $5.93 billion in 2006, according to IRS records.
Robinson has heard of self-directed IRAs in larger cities, but believes it could work in Missoula.
“Launching this in a place like Missoula, where people are so dedicated and so charitable, it is entirely possible this could stick,” Robinson said. “It takes a social entrepreneur like Wayne to make this work.”
Reporter Pamela J. Podger can be reached at 523-5241 or at pamela.podger@missoulain.com.
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