This handbook shines a spotlight on an emerging generation of practical, intelligent activists who are reinventing local financial systems. Even as they criticise capitalism, they are using – and mastering – its financial tools to solve local challenges. In this document, you’ll find an emerging set of tools called community investment funds. The purpose and hope of this guide are that you’ll consider creating one of these funds for your own community.
In the author's view, a community-friendly investment fund has three essential characteristics:
- Local sourcing: Capital for a community investment fund should come from people living in the community and, if possible, from grassroots investors. Yes, deep-pocket investors are welcome, but so is everyone else, including the 95% of us called “unaccredited investors.”
- Local investing: The fund should put its capital exclusively into local people, projects, and businesses, with a mission of significant social change. Sure, part of the mission of investing is generating a rate of return for investors, but just as important is the social rate of return for the community. Particularly important is investing in people, projects, and businesses run by those with the fewest resources and the least power.
- Local decision making: A board of people broadly representative of the community should decide how to deploy the capital. Those without power or resources whom the fund is targeting also need to play a role in the decision-making.