Grassroots Community Engaged Investment: Redistributing power over investment processes as the key to fostering equitable outcomes
From Transform Finance. What would investment to communities look like if those very communities were part of the process? This report makes the case for grassroots engagement, participation, and governance over investments.
Investment into communities is one of the most dominant forces in shaping lives, particularly for Black, Indigenous, and People of Color (BIPOC) and working class communities, but it is largely out of the control of those whom it affects. Grassroots Community Engaged Investment (GCEI) projects are charting a new way for how to shift that dynamic, placing communities at the fulcrum of control and agency over investments.
Over the past several decades, capital providers concerned with the well-being of communities, especially mission-aligned investors and community developers, have sought to fill gaps in capital that address disparities in wealth, jobs, education, and health within BIPOC and working class communities. While lack of capital for community needs is a major issue to be resolved, the disparities in outcomes across racial and geographical lines cannot be resolved simply by injecting more capital into communities. How the use and terms of capital is developed needs to be addressed as well.
This report is the first attempt to synthesize details of projects around the United States that are implementing grassroots input and governance in investment processes. We have provided an analysis of the current state of Grassroots Community Engaged Investment, profiled several investment projects that are redefining the role of the grassroots in investment, and provided insights and recommendations for its continued growth.
In particular, the report is geared towards philanthropic funders, financial intermediaries like Community Development Financial Institutions (CDFIs) and investment funds, and other community development practitioners. However, we hope that this report can serve to inspire other grassroots actors, like activists, organizers, and community-based organizations, to challenge and engage with their financial ecosystems.