Finance

Investing and divesting

The global financial system relies in part on the money invested by individuals, pension funds and institutions. While the primary aim of big hedge funds and investment banks is to maximize profits and minimize taxes, the rest of us can take a more responsible and ethical tack: we can accept a lower monetary return in exchange for the social and environmental benefits of investing in smaller, more local and community-minded businesses.

Investing and divesting Actions
Start a local investing group.
Expand Action
Start a local investing group.

Joining with others to provide capital for new or established local businesses is a great way to meet entrepreneurs in your community, strengthen relationships among friends, and bring more vitality to your local economy.

Take action

  • How to Invest Local by Locavesting (US) offers extended guidance on a dozen models for local investment groups. Most of these are applicable worldwide. 
  • Join or start a Slow Money group. These groups provide interest-free loans to local food and farming enterprises. Most existing groups are in the US, but there are also chapters in Canada, Australia and France. Find a group near you, or start one of your own.

Get inspired

  • Through their Local Investing Opportunities Network, residents of Port Townsend (Washington state, US) have provided more than $7 million to local businesses through a peer-to-peer lending program mediated by the town government. 
  • The US state of Vermont is home to at least two innovative investment clubs. The White River Investment Club provides financing to small businesses that contribute to a stronger local economy, while the Vermont Solidarity Investing Club invests only in cooperative businesses.
  • The members of FarmWorks, in Nova Scotia, Canada, annually purchase shares in a diverse portfolio of local food and farming businesses, bringing almost CAD$3 million to 95 local enterprises.
  • Slow Money chapters worldwide have shifted $79 million towards food and farming enterprises since 2010.

Start a local investing group.

Joining with others to provide capital for new or established local businesses is a great way to meet entrepreneurs in your community, strengthen relationships among friends, and bring more vitality to your local economy.

Take action

  • How to Invest Local by Locavesting (US) offers extended guidance on a dozen models for local investment groups. Most of these are applicable worldwide. 
  • Join or start a Slow Money group. These groups provide interest-free loans to local food and farming enterprises. Most existing groups are in the US, but there are also chapters in Canada, Australia and France. Find a group near you, or start one of your own.

Get inspired

  • Through their Local Investing Opportunities Network, residents of Port Townsend (Washington state, US) have provided more than $7 million to local businesses through a peer-to-peer lending program mediated by the town government. 
  • The US state of Vermont is home to at least two innovative investment clubs. The White River Investment Club provides financing to small businesses that contribute to a stronger local economy, while the Vermont Solidarity Investing Club invests only in cooperative businesses.
  • The members of FarmWorks, in Nova Scotia, Canada, annually purchase shares in a diverse portfolio of local food and farming businesses, bringing almost CAD$3 million to 95 local enterprises.
  • Slow Money chapters worldwide have shifted $79 million towards food and farming enterprises since 2010.
Start a community investment fund.
Expand Action
Start a community investment fund.

Many people who want to invest locally simply don’t have the time to research all of the options; and since most aren't "accredited investors," there are strict rules about where they are allowed to invest money. At the same time, small businesses can find it difficult or impossible to obtain loans – and when they do, they must often pay exorbitant interest rates to distant banks and financial institutions. Community investment funds aim to solve these problems. They are similar to mutual funds, but instead of investing in Fortune 500 companies, the funds invest in local businesses, affordable housing, small farms, entrepreneurs from disadvantaged groups, and so on. Although investors expect a return on their investment, their goal is to support small businesses, not to extract maximum profits from them.

Take action

Get inspired

  • Seed Commons community wealth cooperative in the US is a "national network of locally rooted, non-extractive loan funds that brings the power of big finance under community control," and "provides infrastructure for cooperatives and communities organizing for economic self-determination."
  • The Boston Ujima Project in the US has created a community investment fund as part of an economic alliance devoted to building a local economy by and for the people.
  • The Vermont Community Loan Fund in the US offers interest-bearing savings and Certificate of Deposit (CD) accounts to individuals and organizations. Lenders can specify that their money go towards either the Food, Farms and Forest Fund (supporting local food businesses), or the Next Generation Fund (supporting childcare programs).

Start a community investment fund.

Many people who want to invest locally simply don’t have the time to research all of the options; and since most aren't "accredited investors," there are strict rules about where they are allowed to invest money. At the same time, small businesses can find it difficult or impossible to obtain loans – and when they do, they must often pay exorbitant interest rates to distant banks and financial institutions. Community investment funds aim to solve these problems. They are similar to mutual funds, but instead of investing in Fortune 500 companies, the funds invest in local businesses, affordable housing, small farms, entrepreneurs from disadvantaged groups, and so on. Although investors expect a return on their investment, their goal is to support small businesses, not to extract maximum profits from them.

Take action

Get inspired

  • Seed Commons community wealth cooperative in the US is a "national network of locally rooted, non-extractive loan funds that brings the power of big finance under community control," and "provides infrastructure for cooperatives and communities organizing for economic self-determination."
  • The Boston Ujima Project in the US has created a community investment fund as part of an economic alliance devoted to building a local economy by and for the people.
  • The Vermont Community Loan Fund in the US offers interest-bearing savings and Certificate of Deposit (CD) accounts to individuals and organizations. Lenders can specify that their money go towards either the Food, Farms and Forest Fund (supporting local food businesses), or the Next Generation Fund (supporting childcare programs).
Encourage foundations to shift their capital.
Expand Action
Encourage foundations to shift their capital.

In the US alone, foundations hold hundreds of billions of dollars in assets. Standard asset portfolios often include fossil fuel companies, the private prison industry, land stolen by force, and other exploitative corporate activity. Those of us who have a relationship with a foundation – as a board member, staff member, or even a donor – have a voice in shifting these investments towards strengthening local economies and communities.

Get started

  • Encourage a foundation to adopt mission-aligned investing principles and move its money towards local businesses with Common Future's Funder Learning program.
  • Write a responsible investing policy that excludes exploitative corporations and favors local community development. The guide Writing a responsible investment policy: Guidance for asset owners from PRI takes you through the steps, and provides links to sample policies in dozens of countries, including South Africa, Brazil, New Zealand, the US, and many European countries.

Get inspired

  • The Heron Foundation in the US has shifted 100% of its assets in line with its mission to reduce domestic poverty, through the Funder Learning program. Read details of their journey in the link above.

Encourage foundations to shift their capital.

In the US alone, foundations hold hundreds of billions of dollars in assets. Standard asset portfolios often include fossil fuel companies, the private prison industry, land stolen by force, and other exploitative corporate activity. Those of us who have a relationship with a foundation – as a board member, staff member, or even a donor – have a voice in shifting these investments towards strengthening local economies and communities.

Get started

  • Encourage a foundation to adopt mission-aligned investing principles and move its money towards local businesses with Common Future's Funder Learning program.
  • Write a responsible investing policy that excludes exploitative corporations and favors local community development. The guide Writing a responsible investment policy: Guidance for asset owners from PRI takes you through the steps, and provides links to sample policies in dozens of countries, including South Africa, Brazil, New Zealand, the US, and many European countries.

Get inspired

  • The Heron Foundation in the US has shifted 100% of its assets in line with its mission to reduce domestic poverty, through the Funder Learning program. Read details of their journey in the link above.
Divest from destructive industries.
Expand Action
Divest from destructive industries.

Around the world, institutions are chasing after the highest possible monetary return on trillions of investment dollars. This means that banks, pension funds, university endowments, and state and local government portfolios are heavily invested in fossil fuel, nuclear, and military industries, as well as deforestation, land grabs, predatory lending, and other destructive activities. Doing what we can to convince governments and institutions to stop funding the destruction of the planet is an important act of resistance.

Take action

Get inspired

  • By the end of 2018, institutions ranging from universities and banks to sovereign wealth funds and major cities had made nearly USD 8 trillion in fossil-fuel divestment commitments.
  • Fossil Free California maintains a list of California cities and counties that have divested pension funds from big banks and fossil fuel companies.
  • In 2021, thanks to pressure from NGOs, the Norwegian Parliament adopted a new criterion to guide the investments of the Norwegian Government Pension Fund Global – the world's largest sovereign wealth fund. The Fund will now exclude companies that sell weapons to countries that violate international humanitarian law. Read more in this story from the German NGO Urgewald.

Divest from destructive industries.

Around the world, institutions are chasing after the highest possible monetary return on trillions of investment dollars. This means that banks, pension funds, university endowments, and state and local government portfolios are heavily invested in fossil fuel, nuclear, and military industries, as well as deforestation, land grabs, predatory lending, and other destructive activities. Doing what we can to convince governments and institutions to stop funding the destruction of the planet is an important act of resistance.

Take action

Get inspired

  • By the end of 2018, institutions ranging from universities and banks to sovereign wealth funds and major cities had made nearly USD 8 trillion in fossil-fuel divestment commitments.
  • Fossil Free California maintains a list of California cities and counties that have divested pension funds from big banks and fossil fuel companies.
  • In 2021, thanks to pressure from NGOs, the Norwegian Parliament adopted a new criterion to guide the investments of the Norwegian Government Pension Fund Global – the world's largest sovereign wealth fund. The Fund will now exclude companies that sell weapons to countries that violate international humanitarian law. Read more in this story from the German NGO Urgewald.
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Policy

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