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The Equal Exchange CD - Invest in Fair Trade |
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We are very happy to offer a new way to support Equal Exchange and Fair Trade.
The Equal Exchange Certificate of Deposit
A Three-Year CD with an APY of 3%
Managed by Wainwright Bank
Buying an Equal Exchange Certificate of Deposit (CD) – rather than a conventional CD – means your money goes to support Equal Exchange, Fair Trade, and our small farmer partners across the world. The great news is your savings can earn competitive interest rates and support your values.
Equal Exchange has been growing fast - doubling sales from $10 million to $20 million in the last three years - and benefiting thousands of farmers and their families. But buying ever more coffee, tea and chocolate each year requires financing. Many of our supporters have asked how they can help, and this is our answer.
Here’s how it works: the minimum purchase is just $1000, there’s no maximum, and the term is 3 years. The CD program is managed by Wainwright Bank, a well-respected socially responsible bank in Boston. All the money from the CDs is pooled together and made available to Equal Exchange as a low cost loan. Your CDs guarantee that loan. That means that there is a higher risk than with a normal CD; if we default on the loan it’s possible to lose some of the principal. See What Risks am I Taking?
In return for that risk, your money can be used for tremendous good. For example $2000 can buy, at Fair Trade prices, the complete coffee harvest of a typical family farm. That 5-acre farm, perhaps high in a remote Peruvian valley, might support 6-8 people. So with a $2000 CD you can help keep a family on their land, providing hope that they can improve life for their children. You earn a competitive interest rate, too.
You probably have a few questions; we hope the links below will provide some answers. If you have more questions please don’t hesitate to call or email Alistair Williamson at invest@equalexchange.coop or 508-427-5252
How do I Apply?
The applications are handled by Wainwright bank, and will be like any other CD application, with the addition that you will sign a loan guarantee.
First we recommend you read through the questions and answers here, and then call
David Dolbashian at (617) 478-4000 ext. 351, or email him at ddolbashian@wainwrightbank.com. David will walk you through your application and help answer technical questions about the CD program.
How is the CD different from a regular CD?
It differs in two related ways:
First, the money you invest in this CD is available to Equal Exchange to fund their growth in Fair Trade (rather than condos in Miami or whatever your conventional CD might fund today).
Second, we do this is by having your CD guarantee a loan to Equal Exchange, which means that if Equal Exchange does not repay the loan for some reason – perhaps we go bankrupt – then you may lose some or even all of the money. See below What Risks am I Taking?
So compared to a conventional CD, you are taking some additional risk of loss, and reaping some additional benefit by directing your money to advancing social justice. The interest rate and other terms are the same as you’d expect with a conventional CD.
What Risks am I Taking?
Well, unlike most regular CDs you could lose money. Wainwright Bank is FDIC insured so if the bank collapses your investment is secure. However as your CD is used to guarantee a loan, if Equal Exchange were to become bankrupt or unable to pay its debts then you risk losing some or all of your money. If for example the company did not pay back 20% of the loan then you could lose up to 20% of your CD.
That might make you a little concerned: we understand. Your money is at risk so you’ll want to know Equal Exchange will be prudent with it. To that end you should read the next section about Equal Exchange's past financial performance.
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Tell me about Equal Exchange’s Financial Performance?
Equal Exchange has been in business for over 20 years, we have grown every single one of those years and been and profitable for 16 out the last 17 years. We are a worker-owned cooperative and the largest 100% Fair Trade company in the U.S. We have fully audited financials and you can read our last five annual reports online.
We have never defaulted on a loan, and each worker-owner makes a personal investment in the company. If we make a profit they get a share, if we make a loss it comes out of their pockets. Perhaps that is one reason we’ve been successful.
Finally if the company is ever sold, all the proceeds are distributed to other Fair Trade organizations. We’re not in business to make anyone rich, not us, not you. We’re in business to offer a fair deal to all and use the power of commerce to change the world for the better. We’d love to have you join us.
Who can buy this CD?
Any U.S. resident or U.S. organization. It could make an excellent gift for grandchildren, or a good way for a church or synagogue to further support their social justice goals. Please tell your friends if you think they might be interested.
Can I buy one for my IRA?
In short, no. The CD is a guarantee for a loan, which means it is not eligible for purchase for an IRA. Sorry.
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Why just a 3 year term?
This is a brand new program so to keep costs low we’re just offering one term. We chose three years because it represents the reality in the field for a farmer. If they know they can count on selling their harvest at a Fair Trade price for a few years they to can start to plan for the future; sending a child to school, improving quality, or diversify their crops.
Of course you can also renew the CD at the end of the term and continue to fund Fair Trade for another three years.
Tell me more about Wainwright Bank?
We are very happy to be partnering with Wainwright Bank, and we could wax poetic for hours about their social justice and community values. Their commitment to these causes are not just words but hundreds of million of dollars of loans. They are undoubtedly the good guys. The best way to learn more is by visiting their rainbow-hued site for yourself, we suspect you will like what you learn.
Sounds Interesting, but I still have some Questions
No problem, just email our Capital Team at invest@equalexchange.coop or give them a call at 508-427-5252.
Okay I’m ready to apply …
Great, give David Dolbashian at Wainwright bank a call at (617) 478-4000 ext. 351
or email him at ddolbashian@wainwrightbank.com. He’ll walk you through the process.
On behalf of small farmers on four continents, thanks, and welcome aboard!
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