Democratizing Impact Investment - Crowdfunding our Cities!

One of my current favorite ideas is ‘Ours to Own’ – which is an investment tool that allows ordinary citizens to invest as little as $20 while earning returns ,to contribute to projects and small businesses that strengthen their Community ( in this case the Metro Denver area). Through ‘Ours to Own’ investments money flows through the local economy and creates opportunities for local stakeholders.

This is an important idea for all of us to take notice because - Foundation and Government budgets are shrinking. Additionally, top down approaches of the government often yield only cosmetic results. A solution for re-energizing cities of the future could be to break up problems and have thousands of stakeholders put small amounts of money into something that they care about and earn a return on.

The format for this investment is a Community Investment Note. Pioneered by the Calvert Foundation, the CIN raises capital though the sale of these notes starting as low as $20 and is available in various terms and rates up to 2%. It is the only impact investing product that can be purchased through brokerage accounts by retail investors in the United States. Upon purchasing a Community Investment Note, the full value of your principal is lent out to help underserved communities. As loans are repaid, the capital is lent out again, multiplying the social impact that your investment has created. At maturity , your capital is returned to you with interest.

Something like this would be a gamechanger for Indian cities , here’s why :

a. Small Investment, huge return - While investments can be as low as $20 dollars the collective fund will be considerably large. While the financial returns will be only marginally lower than market rates, the fund itself will have the potential to re energize the local economy by investing in entrepreneurs, infrastructure and the community.

a. Benefit of Local Leadership and Mentorship - Create enabling platforms for local talent to supports local initiatives and local micro entrepreneurs.

b.Risk taking - Communities can invest in quality schooling, affordable housing , improving neighbourhood infrastructures and small business creation.

c.Instead of shuffling the poor out of their homes we can rethink the solution and invest in improving their infrastructure and communities.

Will this work in India ?

Yes. Investing in communities has been around for a very long time in India – we just know if by different name. We call it grant money, donations etc. The expectation with grant money is almost often only a social return, but impact investment and investors have reimagined this challenge and have added an economic incentive into the mix.

For me "The most powerful thing about this idea is that it connects individuals with the communities that they care about "

The implementation challenge will be complex , but this tool could allow us to reimagine our communities and the role we play in them.

See Also - https://www.changecapitalfund.org/