Financing Civic Futures

chloe treger
Nov 9, 2018 · 10 min read
Image for post
Image for post

On the occasion of the inaugural Future Cities Summit, we are sharing this provocation. At the Summit we have heard multifaceted perspectives on the great transition that our cities are facing, from addressing the challenges of the future of work, inequality, planning, affordability, climate change, resilience and next generation governance to name but a few. Many of these challenges are underpinned by a need to invest in our civics, commons and public goods — be it preventative health or our environmental biosphere.

The purpose of this provocation is not to provide answers (yet!), but rather to stimulate and acknowledge the need for a new conversation, share some real-world examples and share the pathway for a new collaborative lab.

(1) Risk like never before

Increasingly, actors globally — whether international organisations, institutional investors, civic groups and private foundations — are recognising that we do not have the financial instruments, models or practices, nor the specific strategies, to cope with the interconnected challenges of comprehensive environmental degradation and growing social inequity.

Increasingly probable long-term threats include 800 million people at risk from sea-level rises and 800 million jobs at risk from automation. Everyday risks are growing as well, such as fatal heat-waves, unmitigated flood risks, and societal epidemics like loneliness remind us daily of the collective failure to create equitable, resilient cities.

Canada is in many ways a leader of urban innovation. Home to 3 of the top 10 liveable cities, with a first-class knowledge base, it is not exempt from these present, and future, pressing risks. First, at present, the Canadian system is failing to provide even the most basic of human rights on Reserves, and creating barriers for Indigenous people to flourish and grow thriving local economies. Secondly, our cities are failing to find inclusive ways to cope with population growth, becoming increasingly unaffordable, driving inequality across our nation. Tackling these dynamics with a governance, fiscal and financial system that structurally underfunds our municipalities (even though they are responsible 60% of infrastructure) and entrenches inequality, is an immense and daunting challenge.

(2) A time for civic capital & civic asset management

We believe that one of the best ways to tackle these challenges is to invest in 21st century civic assets and grow our civic capital. Just as financial capital includes a range of asset classes (such as equities, debt, and cash) that are invested with an expectation of financial returns, civic capital includes a range of asset classes which we can collectively invest in with an expectation of generating civic returns — that is, returns that benefit our cities collectively.

Civic assets go beyond municipal ‘assets’ (those that show on a city’s balance sheet, e.g. streets, sewers and water systems). They include tangible assets, such as built infrastructure and natural assets, like the aquifer whose health reduces the cost of our flood-mitigation strategies and provides potable water. They include intangible assets as well, with a recent example of flood recovery in Jakarta showing how these assets (including data and social capital) created an innovative response based on latent civic duty and crowd-sourced tweets to deal with the disaster.

While we all understand and are equipped to invest in mitigating personal future risks, including the asset-manager who diversifies their client’s portfolio accordingly or the parent who puts aside for their children’s education — we argue that we are failing, as a society, to invest in our essential shared assets our civic assets. Part of the reason for this is the (to date) impossibility of quantifying, and analysing these diffuse risks and value creation but this is no longer the case.

Image for post
Image for post

(3) An age of technological advances

In an age of multiple technological revolutions we can:

  • Monitor that private home-owners stand to benefit from 167% increase in land-value — through transparent real-time immutable land registries

Alone, this new information will not foster a new relationship between the private and civic. We need to create the investment case, through innovative governance, financing and measurement approaches — that moves us towards an asset-based approach which is focused on converting this new knowledge (gained through new data and information) into the wisdom to act for our collective future benefit.

This is not the first time the world has needed innovation in how capital flows to support civic assets. In the 15th century, Henry VIII created a ‘betterment’ levy to capture value from flood defences; post-great fire London invented private property insurance to fund fire engines in the 17th century ; and industrialists created mutually owned credit-clubs in the 19th century to unlock mass house building.

In each age, civic-minded individuals or institutions deployed newly available tools of regulation, investment, accounting, taxation or procurement to answer the pressing shared challenges of their time, or invented new tools where necessary.

In the 21st century, with the rise of technologies mentioned above, we are seeing widespread innovation from a range of actors from different sectors — public, private, and civil society: from new public-private payment-for-success financing schemes which help to leverage private capital as well as drive evidence in policy-making, innovative insurance products that help to drive long-term investment decisions by monetising the avoidance of catastrophic risk, to alternative currencies which operate as mutual credit systems which unlocks financing for small businesses by democratising who gets to issue capital.

Innovation is helping us build pockets of civic capital. In order to do this at scale we urgently need to challenge the often hidden ‘dark matter’ which influences the way we raise and steer capital, creating a multi-value long-term accounting system that highlights interdependencies; using cross-silo socially beneficial procurement strategies which leverage what is already being spent; legislating for the real-time taxes which can represent an increasingly accurate picture of public-private value flows; developing innovative insurance products that manage to mitigate collective risk as well as growing our common narrative around best-in-class system investment and asset management portfolios to make our system for raising and steering capital more systematic, long-term, democratic and transparent.

Image for post
Image for post
What would a better system of financing look like?

(4) Civic Futures

While the task set out above — to create a more civic future — is large, we are not starting from square one. There already exists a world of civically minded individuals and organisations ideating, prototyping and iterating this future (we will be publishing more on this in the new year).

However, scaling these seeds of change up to create meaningful change is far beyond the ability of individual organisations acting in isolation. We must therefore build a sense of shared civic understanding — recognising in our Canada context (as elsewhere) Indigenous land ownership, financial restitution, and self-determination are key elements of this new future — and growing our collective intelligence, capacity for experiments and drivers for change.

Getting to this shared civic attitude, and creating the mechanisms to convert this attitude to financial decisions, requires a new way of working, with new principles for organising that respect the complex and rapidly changing world we live in. Principles are being tested with different groups such as Capital Institute.

Rather than announce a strategy of our own, with an associated timeline that sets unlikely milestones that end up tyrannising (rather than propelling) the process, we are following an open and adaptive method which sets out principles for working, rather than a phased process, such as 90 day reflective sprints to break down the scale of the challenge to small actionable tasks. At the end of each of these sprints, which we commit to and work on transparently, we will reflect critically and iterate for the next sprint.

These sprints will involve actions with various aims, we believe these will includes:

  1. Open Researching & Visualising: to build the case for growing our civic capital. This involves investigating a range of topics — from analysing the deficiencies in the status quo such as the human and financial cost of implementing non-individualised social care to new futures such as how we can use insurance to monetise the avoidance of civic risk. The data-visualisation, and designed provocations, will be key in order to engage those outside our echo chamber
Image for post
Image for post

This provocation marks the beginning of exploring how we create a 21st Century Civic Future. We welcome you to get in touch, contribute and be part of this tomorrow —

We would like to thank everyone at the Wasan Island convening — Stephen Huddart, Geoff Cape, Otis Rolley, Stephen Popovich, Terry Cooke, Derek Gent, Jon Shell, Mike Himbeault, Kathleen Llewellyn-Thomas, Mary Rowe, Eunji Kang, @AlexRyan, Sasha Sud, Paul Messer, Chloe Treger, Ian Bird, Indy Johar , Jayne Engle, Mallory Willson, Patrick Dubé, Robert Plitt, Sophie Mechin and Sara Lyons.— and also all those that attended the ‘Financing the Great Transition’ Session yesterday at the Future Cities Summit.

This piece has been co-authored by Chloe Treger, Ian Bird, Indy Johar , Jayne Engle, Mallory Willson, Laurence Miall, Patrick Dubé, Robert Plitt, Sophie Mechin and Sara Lyons.

Civic Capital Lab is being formed as part of the Future Cities Canada initiative under the collaborative leadership & direction of Community Foundations of Canada, Maison de l’Innovation Sociale, MaRs, McConnell Foundation and Dark Matter Laboratories.


Building a shared understanding of 21st Century Common…

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store