Transformative community-centered finance: three examples of what's possible

Criterion’s latest report explores the transformative potential of blended finance to catalyze flourishing communities. While there have been notable positive social impacts from blended finance to date, these initiatives tend to be limited by assumptions of what finance should be and how it historically operates. Below, we highlight three community-led and governed financial models that demonstrate what’s possible through a localized, participatory approach that pays attention to power.??

Native Women Lead (United States)?

Native Women Lead is a non-profit organization created by and for Native American Women entrepreneurs to create a “safe and inclusive space to foster, start, grow and build native businesses everywhere.” The organization operates several funds, as well as hosts networking and informational events to “build community and power with and for Native women entrepreneurs at all levels so they can continue to build their businesses, skill sets, networks, knowledge, and wealth.” Native Women Lead’s Matriarch Fund provides loans ranging from $2,000-$50,000 to entrepreneurs with a 0-5% interest rate. The organization does not conduct traditional due diligence on credit rating, collateral, or assets, but instead determines risk through community-generated data on personal history and intention for the capital. Native Women Lead’s “5 Rs of Rematriation” provides an alternative framework to assess and account for (to differently value) risk. The 5 Rs stand for: Revolutionary (is the business game changing or solving a problem?), Regenerative (is there a seventh generation impact?), Restorative (does the business help close Racial Wealth Gaps), Rooted (is the business rooted in Indigenous values and need?), and Relational (are relationships and reciprocity enhanced and honored?). This model has proved successful. To date, the Matriarch Fund has a 95% repayment. Enforcing the importance of community even further, the Matriarch Fund provides a tiered incentive structure for loan forgiveness based on participation in events and/or programs, with 50% loan forgiveness for repayment. “The 5 R’s of Rematriation are an alternative framework from the lens of us, Indigenous women where design and decision making process and power are spearheaded and intentionally protected for Native women to mitigate racial and gender bias. The 5 R’s is taking another approach to challenge and change a system while proving Native women are investable and there are matriarch-led businesses that are aligned with our values that we want to catapult so they can continue to be of service to our communities.”

Aboriginal Carbon Foundation and Firesticks Alliance Indigenous Corporation: Cultural Fire Credits (Australia)?

The Cultural Fire Credit, developed through a collaboration between the Firesticks Alliance Indigenous Corporation (Firesticks) and the Aboriginal Carbon Foundation (AbCF) in Australia, represents a novel shift in the role of cultural knowledge in investment practice. The Australian continent struggles with wildfire devastation, and, though wildfire management practices are improving, there finally is a recognition of the need to draw on the Indigenous fire-management knowledge that has been cultivated and refined on this land for thousands of years. The Firesticks Alliance presents a unique partnership of an Indigenous-led network that provides knowledge, mentorship, and training around cultural burning practices and land management. The Cultural Fire Credit, launched in 2018, provides an investment opportunity in growing and maintaining that knowledge and putting it to practice, and is a community-led operation, owned and managed by Aboriginal Australians. Individual people, companies, or government agencies are eligible to buy or invest in Cultural Fire Credits through the Catalyst Markets trading platform, developed by AbCF and Griffith University and managed by the Aboriginal Carbon Foundation. These credits represent a long-term, forward-buy investment that supports cultural burns in practice over a series of years. The Cultural Fire Credits provide a wide range of positive cultural, environmental, social, educational, economic, well-being, and health outcomes and are verified through a rigorous Indigenous-to-Indigenous peer approval process.??

Raven Indigenous Capital Partners and the Raven Indigenous Impact Foundation (RIIF)?

Raven Indigenous Capital Partners (RICP) and the Raven Indigenous Impact Foundation (RIIF) both operate from an Indigenous worldview, following traditional Indigenous protocols, working for the well-being of people and the planet, and acknowledging responsibility to the next Seven Generations. Raven’s Indigenous Impact Funds (Raven Fund I and Raven Fund II) offer a “patient, flexible approach to deal structures” in contrast to an “inflexible, compliance-based colonial funding model,” and seeks mutually valued relationships in partnership with entrepreneurs. RIIF’s innovative Outcomes finance investment process is community-owned and community-led and is centered in Indigenous practice and ways of knowing using a unique Community Driven Outcomes Contract to determine governance, risk tolerance, and impact goals.?

We hope these examples have inspired you to explore the possibilities of blended finance as a tool for systemic change. You can download the full report here,and if you would like to take part in a deeper conversation around finance, justice and systemic risk, consider registering for September’s Convergence XX.

Criterion Institute is committed to revealing and reframing intersectional gendered power dynamics within financial systems. Through this lens, some of the most innovative and inspiring approaches that have surfaced in our research are grounded in Indigenous ways of knowing and being, designed by and for the communities they serve. We share them here with respect and permission from the leaders we interviewed and want to be clear that we are not speaking on behalf of these communities.?

*Blended finance occurs when public or philanthropic capital is provided to incentivize or catalyze additional private investment. This capital can be provided through a combination of tools including grants, loans, investments, guarantees, and related, non-financial resources like advising and networks.?

@CriterInst, #genderlens, #investment, #finance, #powerdynamics, #economics #sustainablefinance, #power, #knowledge #sustainability, #genderequality, #innovativefinance, Arianna Muirow,?Jinita Prasad,?Pranay Samson, Menzies Foundation, Trust Waikato, Raven Indigenous Capital Partners, Native Women Lead,?Alex Hannant, @CindyReeseMitchell, @xtinalara, @larsboggild, @sara-wolfe-7thgenmw, @sherryl-kuhlman-7063821,?vsaunders

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