Giving People Access to Choice
When the goal is building a bridge between social justice and finance, work has to happen on both sides; this is the practice of the Transform Finance Institute for Social Justice Leaders Conference, which I attended this past weekend. Held at Oakland’s Community Bank of The Bay, this year’s conference-the second ever-included leaders from nonprofits across the nation (and a woman from an organization in Haiti), investors, and intermediaries. This diverse group of people, curated intentionally by the Transform Finance staff, sat in one large room where we received information through workshops and panels, had discussions about alternative sources of funding and social impact investing, and ate together talking about our work and enjoying the company of other leaders across industries dedicated to making the world better. We were told to keep a project (or program) in mind throughout the conference that we wanted to make more sustainable. At the end of the conference many of us left with blueprints of different ways we could transform traditional nonprofit financial models to ensure our project’s sustainability.
With a focus on networks, community of practice, and transforming funding for the work we do, this year’s Institute gave many of us who participated in it an alternative lens to examine how we create more sustainable organizations, communities, and social impact. As someone who has worked in the nonprofit field for a while, funding is one is something always looming in the shadows–not guaranteed and wrought with stress. The Transform Finance Institute brought funding models out of the shadows and created a new source of hope by educating us on alternative structures of funding such as: Direct Public Offerings (famously used by Ben & Jerry’s Ice Cream when they were a startup), community Initial Public Offering, cooperatives, and social impact investing among other things.
The conference was mainly about impact investing, which Transform Finance works with a network of investors to do, although a salient underlying theme was social enterprise and empowering people with choices-whether they are wealthy or not-to decide how they invest their money. For example, giving people a choice about whether their electricity comes from sustainable, environmentally friendly resources or fossil fuels. This option could encourage families to choose to live more sustainably. If families wanted to pay for electricity (as it generally comes) using fossil fuels, they could do that-or they could opt to have their electricity be solar-powered. You don’t have to have millions of dollars to make this decision, but ultimately it is an investment decision; how you decide to invest in where and how you live. This was one of many examples of the different types of structures available within the social impact field of finance. The conference allowed participants to shift our mindsets to become more social enterprise focused. We were empowered to understand the significance of communities in impact investment.
The conference highlighted social impact investing as being inherently community-based in its approach. Key aspects within the realm of social impact investing were: shared-decision making, community procurement, community-owned assets, and local-based investing. Essentially, impact investing is community-centered because it supports the people who are on the ground doing the work, the local economy, and allows the community unrestricted ownership of the impact. Social impact investing and the other funding models spoken about at this conference, like TWI’s practice of unrestricted general operating support, trusts the organization and community to use the funds in the way that best supports sustainable community development. TWI recently moved 40% of our portfolio into impact investing, thus the work of Transform Finance Institute is extremely important to our values and practices. Like Transform Finance, TWI believes organizations should have ownership over their funds and should be trusted to learn from and do the social impact work that furthers their mission.
Transform Finance and TWI agree on the idea that funders should be giving more value than they get back. While traditional investing is about gaining more than you give, social impact investing is about giving more than you gain–resulting in more sustainable communities and a more equitable world. Everyone can make more money, but we want to ensure that the wealth gaps are not increasing and inequity is decreasing. When we diversify who participates in finance, we diversify how we do finance. By bringing more social justice leaders into conversation and partnerships with investors and funders we build a collaborative social impact model, which posits community organizations as equals to funding entities–this in itself is one step closer to equity.