Advocate
The National Coalition for Community Capital recognize current investment regulations while initiating and supporting legislation that expands opportunities for Americans to engage with community capital.
What Would It Take to Make Investing Fair for Everyone?
Investment regulations in the U.S. have historically favored the wealthy, limiting who can invest and where. At NC3, we’re working to change that. Through targeted federal and state policy efforts, we aim to open up investment opportunities to more Americans—especially those who want to support their local economies. This includes advocating for a broader definition of “accredited investor,” and exemptions that would make it easier to launch small, community-based investment funds. At the state level, we’re supporting innovative legislation—like Michigan’s proposed 50% tax credit for local investors—and we welcome collaboration with advocates in other states who want to build more equitable, resilient communities through community capital.
Federal Legislation
NC3 is working to coalesce partner organizations across the country around a core set of objectives that would expand investment opportunities for all. The areas we are currently considering are:
- Amend the Definition of an ‘Accredited Investor’ – As currently defined, “accredited” investors include only about 10% of the American population. With this, only that group of highly wealthy citizens can invest in the most profitable and diverse investment opportunities. NC3 is working toward an expanded definition of “accredited” investors, to include anyone who invests an amount not more than the greater of $2,500 or 5% of their net worth (excluding primary residence, etc.).
- Small Fund Exemption from the 1940 Investment Company Act (ICA) – The ICA imposes a heavy burden on funds, yet small funds have the opportunity to mobilize local dollars for local initiatives. NC3 is working toward an exemption for small funds (under $50M) from the ICA regulations. Additional options within this broader goal are (1) to amend the existing intrastate exemption to make it self-executing and increase the cap to $50M and (2) to amend the BIDCO exemption to eliminate the requirement that investors be accredited.
Under current federal law, only about 10% of Americans qualify as “accredited investors,” meaning the vast majority are legally excluded from investing in many high-return and innovative opportunities—regardless of their interest, experience, or community connection.
State Legislation
NC3 is actively pursuing state legislation to increase the accessibility of community capital to all. [As of Winter 2024] NC3 has legislation proposed and widely supported in Michigan, providing a 50% tax credit to those in the state who invest in Michigan-owned businesses.
We would greatly appreciate any opportunity to talk with legislators and/or advocates in any state who would be interested in exploring other state-based incentives for promoting economic justice and resilience.
In Michigan, proposed legislation backed by NC3 would offer a 50% state tax credit to residents who invest in Michigan-owned businesses—making it one of the strongest community investment incentives in the country.