Last weekend, Transform Finance partnered with Solidago Foundation, BALLE, the Boston Ujima Project, and the Solidarity Economy Initiative to host Community Investing for Social Change, a two-day intensive training for communities seeking to aggregate investment capital to spur transformative social change. In the training, participants were introduced to how investors build portfolios using traditional methods of debt and equity, why underserved communities aren’t benefitting from the status quo, and what investors, fund managers, and social justice leaders can do to help align capital with the needs of a community.
The group of over 30 practitioners was convened by Aaron Tanaka of the Boston Ujima Project, a collaboration organizing neighbors, workers, business owners and investors to create a new community controlled economy in Greater Boston.
Andrea Armeni, ED of Transform Finance, led the first day’s discussion, outlining core finance concepts and where Place-Based Impact Investing fits in the context of the mainstream. Participants then identified community needs and hypothesized businesses that could fulfill them, keeping in mind both impact and investability. A major goal of these sessions was to help the community leaders identify what could be salvaged from traditional finance that could benefit their work, and reconcile their mission criteria with some of the realities of fund management, such as balancing risks and timelines.
On Day 2, Solidago Foundation’s Jeff Rosen led participants through the portfolio-building process on the investor side while also giving them a chance to workshop what they would like to see in their ideal, investable local company. Participants used Excel workbooks to examine the investability of social enterprises with different criteria and to learn how alternative exit strategies can increase the viability of a company and preserve its impact.
The curriculum for both days was based on a prior effort by Solidago and Transform Finance for the Democratizing Capital East Bay cohort, which seeks to create a fund to invest locally according to the group’s democratically designed mission criteria. It was specifically geared towards gaining a better understanding of the Boston Ujima Project, which is developing a Community Capital Fund on the behalf of the communities in Boston who are underserved by traditional finance institutions, and towards exploring how such a fund can work in practice without compromising on its effort to deeply democratize capital – both in terms of who gets to be an investor, and who gets to be invested. Aaron Tanaka and Nia Evans of the Boston Ujima Project tied in how the Transform Finance principles of deep community engagement, non-extractiveness, and fair balance of risk/reward played a central role in the fund’s creation and how a truly community-centered investment vehicle can form with the right inputs.